Defenshield Inc. v. First Choice Armor & Equip., Inc.
| Decision Date | 29 March 2012 |
| Docket Number | 5:10-CV-1140 (GTS/DEP) |
| Court | U.S. District Court — Northern District of New York |
| Parties | DEFENSHIELD INC., Plaintiff, v. FIRST CHOICE ARMOR & EQUIPMENT, INC.; and D-BACK ACQUISITION CO., Defendants. |
APPEARANCES:
BOND, SCHOENECK, & KING, LLP
Counsel for Plaintiff
GREENBERG TRAURIG, LLP
Counsel for Defendants
OF COUNSEL:
CLIFFORD G. TSAN, ESQ.
DAVID L. NOCILLY, ESQ.
GEORGE R. MCGUIRE, ESQ.
STEPHEN M. BUHR, ESQ.
BARRY J. SCHINDLER, ESQ.
WILLIAM W. STROEVER, ESQ.
MEMORANDUM-DECISION and ORDER
Currently before the Court in this patent infringement action filed by Defenshield, Inc. ("Plaintiff") against First Choice Armor & Equipment, Inc., and D-Back Acquisition Co. ("Defendants"), is Defendants' motions to dismiss for failure to state a claim and to transfer venue to the Western District of North Carolina. (Dkt. No. 11.) For the reasons set forth below, Defendants' motions are denied.
Plaintiff filed its Amended Complaint in this action on September 22, 2010. (Dkt. No. 5.) Generally, liberally construed, Plaintiff's Amended Complaint alleges as follows. On June 21, 2005, Plaintiff was awarded United States Patent No. 6,907,811 ("'811 patent") describing its Mobile Defensive Fighting Position ("MDFP"), a portable ballistics shield used to protect both government and private security personnel. (Id.) Defendants make, sell, offer to sell, use and/or import a similar ballistics shield referred to as the "Rolling Bunker," which contains each and every element of at least one claim of the '811 patent. (Id.) Defendants sell and/or offer to sell the Rolling Bunker to the public and governmental entities, including Fort Drum in Jefferson County, New York. (Id.)
Based on these factual allegations, Plaintiff's Amended Complaint claims that Defendants' manufacture and sale of the Rolling Bunker to government and public customers infringes on Plaintiff's rights as the holder of the '811 patent and constitutes patent infringement under 35 U.S.C. § 271. (Id.) Familiarity with the factual allegations supporting these claims in Plaintiff's Amended Complaint is assumed in this Decision and Order, which is intended primarily for review by the parties. (Id.)
On October 25, 2010, Defendants filed a motion to dismiss, pursuant to Fed. R. Civ. P. 12(b)(6), and a motion to transfer venue, pursuant to 28 U.S.C. § 1404(a). (Dkt. No. 11.) Generally, in support of its motions, Defendants argue as follows: (1) pursuant to 28 U.S.C. § 1498, a claim for patent infringement can not be sustained against a government contractor whenthe patented invention is used or manufactured by or for the United States; (2) because 28 U.S.C. § 1498 relieves the Defendants of liability, the portion of the Plaintiff's infringement claim that is based on the sales offer of the "Rolling Bunker" to Fort Drum must be dismissed with prejudice because the Plaintiff failed to state a claim on which relief can be granted; and (3) without the conduct involving Fort Drum as a basis for Plaintiff's Amended Complaint, there is little, if any, connection to the Northern District of New York, and this action should be transferred to the Western District of North Carolina, which is the center of gravity of this litigation. (Dkt. No. 11, at 1-5 [Defs.' Memo. of Law].)
Generally, in its response, Plaintiff argues as follows: (1) Defendants cannot meet the burden of proof required by 28 U.S.C. § 1498, which is an affirmative defense, in a Fed. R. Civ. P. 12(b)(6) motion; (2) Defendants cannot point to anything in the Amended Complaint that demonstrates that Defendants acted with the authorization or consent of the government as required to prevail under 28 U.S.C. § 1498; (3) a single non-governmental sale can be sufficient to render inapplicable the de minimis exception of 28 U.S.C. § 1498, and give the Court jurisdiction over the entire claim; (4) the Court has no authority to split Plaintiff's infringement claim into two whereby Plaintiff would be forced to maintain an action for infringement against the government pursuant to 28 U.S.C. § 1498 and another action against Defendants pursuant to 35 U.S.C. § 271; and (5) this action should not be transferred because the Court should give Plaintiff's choice of forum deference. (Dkt. No. 17.)
Generally, in its reply, Defendants argue as follows: (1) Plaintiff alleged facts in its Amended Complaint that plausibly suggest the existence of all elements of 28 U.S.C. § 1498, including that the United States Army authorized Defendants' actions when the Armyspecifically described Plaintiff's device in its Request for Quote ("RFQ"); (2) the de minimis exception applies only when a defendant seeks to dismiss a plaintiff's complaint in its entirety, and therefore it does not apply in this case because Defendants seek to dismiss only the portion of the Amended Complaint relating to the Fort Drum sale; and (3) Plaintiff's choice of forum should not be given deference beacause venue is not proper in the Northern District of New York because the Court lacks personal jurisdiction. (Dkt. No. 19.)
It has long been understood that a defendant may base a motion to dismiss for failure to state a claim upon which relief can be granted on either or both of two grounds: (1) a challenge to the "sufficiency of the pleading" under Fed. R. Civ. P. 8(a)(2); or (2) a challenge to the legal cognizability of the claim. Jackson v. Onondaga Cnty., 549 F. Supp.2d 204, 211, nn. 15-16 (N.D.N.Y. 2008) ().
Because such motions are often based on the first ground, a few words on that ground are appropriate. Rule 8(a)(2) of the Federal Rules of Civil Procedure requires that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2) [emphasis added]. In the Court's view, this tension between permitting a "short and plain statement" and requiring that the statement "show[]" an entitlement to relief is often at the heart of misunderstandings that occur regarding the pleading standard established by Fed. R. Civ. P. 8(a)(2).
On the one hand, the Supreme Court has long characterized the "short and plain" pleading standard under Fed. R. Civ. P. 8(a)(2) as "simplified" and "liberal." Jackson, 549 F. Supp.2d at 212, n.20 (citing Supreme Court case). On the other hand, the Supreme Court hasheld that, by requiring the above-described "showing," the pleading standard under Fed. R. Civ. P. 8(a)(2) requires that the pleading contain a statement that "give[s] the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Jackson, 549 F. Supp.2d at 212, n.17 (citing Supreme Court cases) (emphasis added).
The Supreme Court has explained that such fair notice has the important purpose of "enabl[ing] the adverse party to answer and prepare for trial" and "facilitat[ing] a proper decision on the merits" by the court. Jackson, 549 F. Supp.2d at 212, n.18 (citing Supreme Court cases); Rusyniak v. Gensini, 629 F. Supp.2d 203, 213 & n.32 (N.D.N.Y. 2009) (Suddaby, J.) (citing Second Circuit cases). For this reason, as one commentator has correctly observed, the "liberal" notice pleading standard "has its limits." 2 Moore's Federal Practice § 12.34[1][b] at 12-61 (3d ed. 2003). For example, numerous Supreme Court and Second Circuit decisions exist holding that a pleading has failed to meet the "liberal" notice pleading standard. Rusyniak, 629 F. Supp.2d at 213, n.22 (citing Supreme Court and Second Circuit cases); see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-52 (2009).
Most notably, in Bell Atl. Corp. v. Twombly, the Supreme Court reversed an appellate decision holding that a complaint had stated an actionable antitrust claim under 15 U.S.C. § 1. Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955 (2007). In doing so, the Court "retire[d]" the famous statement by the Court in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Twombly, 127 S. Ct. at 1968-69. Rather than turning on the conceivability of an actionable claim, the Court clarified, the "fair notice" standard turns on the plausibility of an actionable claim. Id. at 1965-74. The Court explained that, while this does not mean that a pleading need "set out in detail thefacts upon which [the claim is based]," it does mean that the pleading must contain at least "some factual allegation[s]." Id. at 1965. More specifically, the "[f]actual allegations must be enough to raise a right to relief above the speculative level [to a plausible level]," assuming (of course) that all the allegations in the complaint are true. Id.1
As for the nature of what is "plausible," the Supreme Court explained that "[a] claim has facial plausibility 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, 129 S.Ct. 1937, 1949 (2009). Iqbal, 129 S.Ct. at 1950 [internal quotation marks and citations omitted]. However, while the plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully," id.,...
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