Homebingo Network, Inc. v. Chayevsky

• Decision Date: 21 April 2006
• Docket Number: Civ.A. No. 05-0701-WS-B.
• Citation: 428 F.Supp.2d 1232
• Parties: The HOMEBINGO NETWORK, INC., Plaintiff, v. Gene CHAYEVSKY, et al., Defendants.
• Court: U.S. District Court — Southern District of Alabama

428 F.Supp.2d 1232

The HOMEBINGO NETWORK, INC., Plaintiff, v. Gene CHAYEVSKY, et al., Defendants.

Civ.A. No. 05-0701-WS-B.

United States District Court, S.D. Alabama, Southern Division.

April 21, 2006.

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Robert David Malove, Ft. Lauderdale, FL, for Plaintiff.

Patricia Clotfelter, Baker, Donelson, Bearman, Caldwell & Berkowitz, Birmingham, AL, for Defendants.

ORDER

STEELE, District Judge.

This matter is before the Court on the Motion to Dismiss (doc. 21) filed by defendants Mike Macke, Tim Minard and Gene Chayevsky (collectively, "Movants"). The Motion has been briefed and is ripe for disposition.¹

I. Background.

On December 5, 2005, plaintiff, The HomeBingo Network, Inc. ("HomeBingo"), filed a Complaint for Patent Infringement (doc. 1) in this District Court, naming a dozen defendants.² For purposes of the pending Motions, the critical defendants are Cadillac Jack, Inc. ("Cadillac Jack"), a Georgia corporation with its principal place of business in Duluth, Georgia; Michael M. Macke ("Macke"), who is Cadillac Jack's President and Chief Executive Officer; Timothy J. Minard ("Minard"), who is Cadillac Jack's Chief Financial Officer and Assistant Secretary; and Gene Chayevsky ("Chayevsky"), a member of Cadillac Jack's Board of Directors. Although Macke, Minard and Chayevsky maintain that personal jurisdiction and venue are lacking as to them, there has been no request by any party that these proceedings should be dismissed as to Cadillac Jack for want of in personam jurisdiction or for improper venue.

According to the well-pleaded allegations of the Complaint, HomeBingo is the holder of United States Patent No. 6,186,892 ("the '892 Patent") for a method of playing bingo on an interactive communication network relying on probabilities for winning. (Complaint, ¶¶ 19, 20.) Defendant Cadillac Jack is alleged to be acting unlawfully "in this judicial district and elsewhere, by importing, operating, and/or using electronic bingo-based slot machines" whose method of playing bingo infringes the '892 Patent. (Id., ¶¶ 26-27, 30.)³ As for defendants Macke and Minard, the Complaint alleges that they: (a) are using and operating infringing bingobased slot machines in this judicial district and elsewhere; (b) are inducing the use of infringing bingo-based slot machines in this judicial district and elsewhere; and (c) are assisting, aiding and abetting others to use and operate infringing bingo-based slot machines in this judicial district and elsewhere. (Id., ¶¶ 31-33.) Defendant Chayevsky is likewise alleged to be inducing use and operation of infringing bingobased slot machines in Atmore, Alabama, and elsewhere, and to be assisting, aiding and abetting others to use such machines at those locations. (Id., ¶¶ 35-36.) Macke, Minard, and Chayevsky are all alleged to be sharing in the revenue stream generated by those infringing bingo-based slot machines in Atmore. (Id., ¶ 39.)⁴

Movants now ask the Court to dismiss the Complaint against them for want of personal jurisdiction, pursuant to Rule 12(b)(2), Fed.R.Civ.P., and for improper venue, pursuant to Rule 12(b)(3), Fed. R.Civ.P. Each of these grounds for relief will be assessed independently.

II. Status of Plaintiff's Late-Filed Affidavits.

Before turning to the merits of the Motion to Dismiss, the Court must assess whether and, if so, to what extent it will consider the two affidavits proffered by plaintiff in support of its position that personal jurisdiction and venue are proper here.

A. Timeliness.

Contemporaneously with its brief in opposition to the Motion to Dismiss, Home-Bingo submitted the Affidavit of Alan Frank (doe. 25), who is. HomeBingo's General Manager. Movants sought to strike the Frank Affidavit on grounds of lack of personal knowledge, hearsay, legal conclusions, and conclusory/self-serving statements. Before any ruling on the motion to strike, plaintiff countered by proffering a Supplemental Affidavit of Alan Frank (doc. 38), purporting to remedy the alleged deficiencies. This Supplemental Affidavit was submitted without leave of Court and after briefing had closed on the Motion to Dismiss. Movants again balked, filing a second motion to strike as to the Supplemental Affidavit, on grounds of lack of personal knowledge, opinions and legal conclusions, and settlement discussions. In lieu of filing a responsive brief to that motion to strike, HomeBingo consented to both the Frank Affidavit and Supplemental Affidavit being stricken, and submitted a third iteration of the Frank Affidavit (doc. 54), plus the Affidavit of Arthur A. Gardner (doe. 55). Both the Third Frank Affidavit and the Gardner Affidavit were filed without leave of Court on April 6, 2006, nearly six weeks after the Motion to Dismiss had been taken under submission on February 24, 2006.⁵

A threshold question is whether, given their dilatory submission, the Third Frank Affidavit and the Gardner Affidavit should even be weighed in connection with the pending Motion to Dismiss. Ordinarily, a non-movant is expected to submit appropriate evidentiary materials simultaneously with its opposition brief. In all but exceptional cases, affidavits and other evidentiary materials must be filed before briefing on the underlying motion is completed. To hold otherwise would be to encourage dilatory filings by conferring a tactical advantage on a litigant who waited to file his affidavits until after a motion had been taken under submission, thereby depriving his opponent of an opportunity to respond in writing to those affidavits. Alternatively, to allow such evidentiary ping-pong would be tantamount to holding open the briefing on a pending motion indefinitely, as each side submitted volley after volley of evidentiary matter, and supplemental brief after supplemental brief, months after the underlying motion was filed. Both of these piecemeal litigation scenarios would be antithetical to virtues of consistent, efficient, fair administration of justice, and would disserve judicial economy.⁶

HomeBingo has not suggested that the Third Frank Affidavit and the Gardner Affidavit contain previously unavailable evidence that it could not reasonably have presented at the time of its February 17 memorandum in opposition to the Motion to Dismiss. Indeed, as Frank is an executive of plaintiff, presumably HomeBingo has had unfettered access to him and the information in his possession throughout these proceedings. Nor does HomeBingo allude to any extraordinary circumstances that might justify consideration of affidavits filed six weeks too late. Nonetheless, in its discretion, the Court will not sua sponte strike the Third Frank Affidavit and the Gardner Affidavit as untimely. Four reasons animate this result. First, this action was not assigned to the undersigned when the earlier Frank Affidavits were filed. Even though the Supplemental Frank Affidavit was filed nearly three weeks after the close of briefing on the Motion to Dismiss, the District Judge to whom the case was assigned at that time did not suggest that it might be struck down on timeliness grounds. The Court cannot discount the possibility that Home-Bingo may have relied on this silence in withdrawing its previous Frank Affidavits and offering the third version. Second, the Third Frank Affidavit bears considerable overlap with its two predecessors. As a result of this similarity, the risk of inefficiencies caused by an ever-shifting evidentiary landscape is attenuated, and the likelihood of unfair surprise or prejudice to Movants is low. Third, although Movants objected vehemently to the Supplemental Frank Affidavit, they never asserted that it was untimely. Because Movants did not complain about timeliness with respect to a second affidavit filed three weeks after the underlying motion was taken under submission, there is no reason to believe they would do otherwise as to a third affidavit filed an additional three weeks later. Fourth, Movants never submitted any supplemental objections (concerning timeliness or anything else) in response to the latest round of plaintiffs affidavits.

For these reasons, in its discretion, the Court will not strike the Third Frank Affidavit or the Gardner Affidavit as untimely, but will consider them on the merits.

B. Evidentiary Considerations.

Based on Movants' objections to the predecessors of the pending affidavits, the Court understands there to be four categories of evidentiary objections to the Third Frank Affidavit and the Gardner Affidavit: lack of personal knowledge, inclusion of conclusory statements, inclusion of statements of opinion or speculation, and recitation of settlement discussions. See generally CMS Industries, Inc. v. L.P.S. Int'l, Ltd., 643 F.2d 289, 295 (5th Cir.1981) ("the district court may, on its own motion and without abuse of discretion, properly refuse to credit an affidavit clearly defective on its face").

An affidavit may only be considered to the extent that it is based on personal knowledge. See generally Rule 602, Fed.R.Evid. (witnesses may not testify to matters as to which they lack personal knowledge). However, when an affiant avers that his statements are based on personal knowledge, a district court is "bound to accept [such] statements as true, unless the context demonstrate[s] otherwise." Martin v. Rumsfeld, 2005 WL 1526465, *2 (11th Cir. June 29, 2005); Davis v. Valley Hospitality Services, LLC, 372 F.Supp.2d 641, 653 (M.D.Ga.2005) (explaining that a clear statement that an affidavit is based on personal knowledge is sufficient to satisfy the "personal knowledge" requirement); Lindsey v. Burlington Northern Santa Fe Railway Co., 266 F.Supp.2d 1338, 1343 (N.D.Ala.2003) (denying motion to strike because, among other reasons, affiant stated that she had personal knowledge as to subject of averments). In its introductory paragraph, the Third Frank Affidavit states that "[a]ffiant has personal knowledge that the...