Brinkmeier v. Graco Children's Products Inc.

• Decision Date: 07 March 2011
• Docket Number: Civil Action No. 09–262–LPS.
• Citation: 767 F.Supp.2d 488
• Parties: Jennifer L. BRINKMEIER, Plaintiff,v.GRACO CHILDREN'S PRODUCTS INC., Defendant.
• Court: U.S. District Court — District of Delaware

767 F.Supp.2d 488

Jennifer L. BRINKMEIER, Plaintiff,

v.GRACO CHILDREN'S PRODUCTS INC., Defendant.

Civil Action No. 09–262–LPS.

United States District Court, D. Delaware.

March 7, 2011.

4,811,437. Cited.

Stamatios Stamoulis, Esquire and Richard C. Weinblatt, Esquire of Stamoulis & Weinblatt LLC, Wilmington, DE, for Plaintiff.

Lynn E. Rzonca, Esquire and Melissa J. Lore, Esquire of Ballard Spahr LLP, Philadelphia, PA, Beth Moskow–Schnoll, Esquire of Ballard Spahr LLP, Wilmington, DE, for Defendant.

MEMORANDUM OPINION

STARK, District Judge.

Pending before the Court is a Motion To Dismiss Plaintiff's Second Amended Complaint (D.I. 37) filed by Defendant, Graco Children's Products Inc. (“Graco”). The Court held oral argument on the Motion on December 9, 2010. See Transcript (“Tr.”) (D.I. 63). For the reasons discussed, the Court will deny the Motion.

I. THE PARTIES' CONTENTIONS

Plaintiff, Jennifer Brinkmeier,¹ filed this qui tam action against Graco on April 20, 2009, alleging false patent marking under 35 U.S.C. § 292. Specifically, Plaintiff contends that a variety of child playards, car seats, and strollers sold by Graco are marked with the number of one or more expired patents ² and/or other patents, the scope of which do not actually cover the marked products. Plaintiff requests, among other things, a declaratory judgment that Graco falsely marked products in violation of 35 U.S.C. § 292, and monetary damages in the form of a civil fine of $500 per false marking offense or an alternative amount as determined by the Court—half of which shall be paid to the United States of America.

By its Motion, Graco initially requested dismissal of this action pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). (D.I. 37; D.I. 38) Since the filing of the Motion, Graco has withdrawn its request for dismissal under Rule 12(b)(1) in light of Stauffer v. Brooks Brothers, Inc., 619 F.3d 1321, 1324–28 (Fed.Cir.2010). In Stauffer, the Federal Circuit reversed a district court's dismissal of a complaint for lack of standing and held that allegations of personal injury or injuries to competition need not be pled by a qui tam plaintiff under 35 U.S.C. § 292, since that provision operates as a “statutory assignment” of the rights of the United States to private plaintiffs. See id. With respect to its request for dismissal under Rule 12(b)(6), Graco contends that Plaintiff has failed to meet the heightened pleading standard required by Stauffer for claims under 35 U.S.C. § 292. In particular, Graco contends that Plaintiff has failed to sufficiently plead that Graco intended to deceive the public, as is required to maintain a claim for false patent marking.

In response, Plaintiff directs the Court to the Federal Circuit's decision in Pequignot v. Solo Cup Co., and contends that she has sufficiently pled false statements and knowledge by Graco so as to trigger the rebuttable presumption of intent to deceive the public set forth in Pequignot. See 608 F.3d 1356, 1362–63 (Fed.Cir.2010) (“[T]he combination of a false statement and knowledge that the statement was false creates a rebuttable presumption of intent to deceive the public.... [T]he fact of misrepresentation coupled with proof that the party making it had knowledge of its falsity is enough to warrant drawing the inference that there was a fraudulent intent.”). Plaintiff maintains that Graco has failed to overcome the presumption at this juncture.

II. LEGAL STANDARDSA. Fed.R.Civ.P. 12(b)(6)

Evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) requires the Court to accept as true all material allegations of the complaint. See Spruill v. Gillis, 372 F.3d 218, 223 (3d Cir.2004). “The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir.1997) (internal quotation marks omitted). Thus, the Court may grant such a motion to dismiss only if, after “accepting all well-pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief.” Maio v. Aetna, Inc., 221 F.3d 472, 481–82 (3d Cir.2000) (internal quotation marks omitted). However, “[t]o survive a motion to dismiss, a civil plaintiff must allege facts that ‘raise a right to relief above the speculative level on the assumption that the allegations in the complaint are true (even if doubtful in fact).’ ” Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir.2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).

While heightened fact pleading is not required, “enough facts to state a claim to relief that is plausible on its face” must be alleged. Twombly, 550 U.S. at 570, 127 S.Ct. 1955. A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). At bottom, “[t]he complaint must state enough facts to raise a reasonable expectation that discovery will reveal evidence of [each] necessary element” of a plaintiffs claim. Wilkerson v. New Media Tech. Charter Sch. Inc., 522 F.3d 315, 321 (3d Cir.2008) (internal quotation marks omitted). “[W]hen the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should ... be exposed at the point of minimum expenditure of time and money by the parties and the court.” Twombly, 550 U.S. at 558, 127 S.Ct. 1955 (internal quotation marks omitted). Nor is the Court obligated to accept as true “bald assertions,” Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997) (internal quotation marks omitted), “unsupported conclusions and unwarranted inferences,” Schuylkill Energy Res., Inc. v. Pennsylvania Power & Light Co., 113 F.3d 405, 417 (3d Cir.1997), or allegations that are “self-evidently false,” Nami v. Fauver, 82 F.3d 63, 69 (3d Cir.1996).

B. Fed.R.Civ.P. 9(b)

In addition to the requirements of Rule 12(b)(6), the parties agree that Rule 9(b) applies to Plaintiff's claims.³ (D.I. 40 at 11–12; D.I. 43 at 1) Rule 9(b) requires a party to “state with particularity the circumstances constituting fraud or mistake;” however, “malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Although a plaintiff is not required to allege every material detail—such as date, location, or time—a plaintiff must plead the circumstances of the fraud with sufficient particularity “to place defendants on notice of the precise misconduct with which they are charged.” Eames v. Nationwide Mut. Ins. Co., 2008 WL 4455743, at *13 (D.Del. Sept. 30, 2008), aff'd 346 Fed.Appx. 859 (3d Cir.2009); see also Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d Cir.1984).

III. DISCUSSIONA. Whether To Stay Resolution Of This Motion

As a threshold matter, the Court has considered whether to stay this action in light of In re BP Lubricants USA, Inc., Misc. Docket No. 960 (Fed.Cir.2010), which is currently pending in the Court of Appeals for the Federal Circuit on a petition for mandamus relief filed by BP Lubricants, USA, Inc. (“BP”) from the August 25, 2010 decision of the United States District Court for the Northern District of Illinois denying BP's motion to dismiss. At issue in the petition for mandamus is whether Rule 9(b) applies to allegations of intent to deceive the public in the context of Section 292 and what types of allegations satisfy Rule 9(b); in particular, whether it is sufficient to plead that the defendant “knew or should have known” that the marking was false.

Graco requests that the Court stay this action until the Federal Circuit issues a decision in BP Lubricants, contending that Federal Circuit case law governs the issue of what allegations are sufficient to meet the requirements of pleading intent to deceive under Rule 9(b). (Tr. 34–35; D.I. 60, citing Exergen v. Wal–Mart Stores, Inc., 575 F.3d 1312, 1326 (Fed.Cir.2009) (“[W]e apply our own law, not the law of the regional circuit, to the question of whether inequitable conduct has been pled with particularity under Rule 9(b).”)) Graco points out that at least two district courts have stayed false marking cases in anticipation of Federal Circuit guidance on the issue. (D.I. 60, citing Francisco Tech. Inc. v. Graphic Packaging Int'l, 1:10–cv–1195 (N.D.Ga. Nov. 10, 2010); NEWT LLC v. Nestle USA, Inc., No. 1:09–cv–04792 (N.D.Ill. Nov. 1, 2010))

Plaintiff acknowledges that the Federal Circuit's decision in BP Lubricants may have some impact on this case, but contends that because the parties have already agreed that Rule 9(b) applies, the potential impact of BP Lubricants is limited. Plaintiff also contends that regional circuit law applies to resolve the pleading issues presented here. Thus, Plaintiff maintains that additional guidance from the Federal Circuit, while possibly relevant, is not needed in order for the Court to resolve Defendant's Motion To Dismiss.

“[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. North Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936). The decision to grant a stay rests within the discretion of the Court and involves a balance of the hardships to the parties. Id.

The Court declines to stay this action in light of the mandamus petition pending before the Federal Circuit in BP Lubricants. “The remedy of mandamus is a drastic one, to be invoked only in extraordinary situations.” Kerr v. U.S. Dist. Court for N. Dist. of Cal., 426 U.S. 394, 402, 96 S.Ct. 2119, 48 L.Ed.2d 725 (1976). The decision to issue a writ of mandamus...