Kinetic Concepts, Inc. v. Kinetic Concepts, Inc., Civ. A. No. C81-875A

Decision Date04 January 1985
Docket NumberC81-1398A and C82-247A.,Civ. A. No. C81-875A
Citation601 F. Supp. 496
PartiesKINETIC CONCEPTS, INC. (A Texas Corporation), Plaintiff, v. KINETIC CONCEPTS, INC. (A Georgia Corporation), Southern Medical Supply Company, d/b/a Southern Medical, Inc.; Robert A. Lundquist; Edison E. Lyle and Motion Manufacturing, Inc., Defendants. KINETIC CONCEPTS, INC., Plaintiff, v. SOUTHERN MEDICAL SUPPLY COMPANY, d/b/a Southern Medical, Inc.; Kinetic Concepts, Inc.; Robert A. Lundquist; and Edison E. Lyle, Defendants. KINETIC CONCEPTS, INC., Plaintiff, v. MOTION MANUFACTURING, INC., Defendant.
CourtU.S. District Court — Northern District of Georgia

Randall L. Hughes, Ellwood F. Oakley, III, Dodd, Driver, Connell & Hughes, Atlanta, Ga., Donald R. Comuzzi, Charles W. Hanor, Cox & Smith, San Antonio, Tex., for plaintiff.

Robert L. Schwind, Atlanta, Ga., Paul S. Weiner, Martin L. Cowen, III, Jonesboro, Ga., Mr. Jay E. Loeb, Atlanta, Ga., for defendants.

ORDER

FORRESTER, District Judge.

These cases are now pending before the court on three motions filed by defendants Southern Medical Supply Company and Edison E. Lyle. For the reasons which appear herein, all three motions are DENIED.

A. MOTION TO DECLARE LUNDQUIST AND MOTION MANUFACTURING UNREPRESENTED.

In a motion filed in open court on October 2, 1984, defendants Lyle and Southern Medical requested that in the event that neither Lundquist nor Motion Manufacturing, nor any counsel representing them, appeared at the status conference scheduled for that day, this court declare those two defendants to be unrepresented. The basis of this motion appears to be the contention of Lyle and Southern Medical that neither Lundquist nor Motion Manufacturing remains interested in this litigation, such that copies of pleadings should not be served on them. The record of this case reflects that these defendants are represented by Mr. Paul Weiner. Although Mr. Weiner did not appear at the status conference, he has responded to this court's show cause order (which will be ruled upon in a separate order) and has continued to express his interest in this ongoing litigation. Moreover, defendant Lundquist was present at the hearing on October 2, 1984. It appearing to the court that the motion to declare Lundquist and Motion Manufacturing unrepresented is without basis, given the record of this case, said motion is DENIED.

B. MOTION FOR SEVERANCE.

On October 2, 1984, defendants Lyle and Southern Medical filed a motion for severance. The basis of this motion was the perception of counsel for those two defendants that certain cases had been consolidated with others, when they had not. To review the current status of this case, the following three cases are currently consolidated for all purposes: Civil Action No. C81-875A, Civil Action No. C81-1398A, and Civil Action No. C82-247A. Consolidated with those cases for purposes of pretrial discovery only is Civil Action No. C81-875A, a trademark case involving some of the same parties as the foregoing patent actions. To clarify for the benefit of Lyle and Southern Medical's counsel, this court has never entered an order which would consolidate the trademark case (C81-875A) with the patent cases for trial purposes. See Orders of October 30, 1981, August 4, 1982, and November 1, 1982.

Lyle and Southern Medical also argue with respect to the three patent cases which are currently consolidated that this court should sever those cases for trial pursuant to Federal Rule of Civil Procedure 42(b). The basis of this motion is the assertion that Lundquist and Motion Manufacturing will be in default, and it would embarrass Lyle and Southern Medical to have to defend a case while being associated in the minds of the jury with non-interested, defaulting parties.1 The plaintiff has opposed defendants' motion to sever on the grounds that the complaints in the three patent cases reveal a series of acts which plaintiff alleges to establish ongoing patent infringements by various combinations of the defendants. To permit severance, the plaintiff argues, would permit the present defendants to point the finger of blame at the absent defendants. In addition, plaintiff points out that since the issues in these cases are virtually identical, and that the defendants are claimed to be joint tortfeasors, it would not be economical for this court to order separate trials. The court concurs with this latter point.

As the court pointed out in its order of November 1, 1982, "... all three suits involve identical patents and infringing products. In fact, all three suits involve all of the party defendants as fact witnesses. Thus, common questions of law and fact reside in all the suits." Order of November 1, 1982, at 2. This court values expeditious resolution of litigation, and can see no purpose in requiring three separate trials with essentially the same proof and witnesses to be presented at each. The only burden which the movant has asserted in this case is the allegation that it would embarrass Lyle and Southern Medical to be associated with a non-interested defaulting party. This court has never held that Lundquist and Motion Manufacturing are in default in this case. If they are at the time of trial of this case, the court will entertain appropriate motions at the pretrial conference to minimize any "embarrassment" to Lyle and Southern Medical. At this point, however, the motion for severance is DENIED.

C. MOTION TO DISMISS.

The final motion before this court for determination is the motion filed by defendants Lyle and Southern Medical on October 2, 1984, to dismiss this action. The basis of this motion is that the plaintiff in all three of these cases, Kinetic Concepts, Inc., does not possess a certificate of authority to conduct business in the State of Georgia, and therefore is barred from bringing suit in this state. The Official Code of Georgia, § 14-2-331(b), provides in pertinent part that:

No foreign corporation that under this chapter is required to obtain a certificate of authority shall be permitted to maintain any action, suit, or proceeding in any court of this state unless before commencement of the action it shall have obtained such a certificate.

Kinetic Concepts does not challenge the fact that it does not have a certificate of authority to transact business in the State of Georgia. Rather, Kinetic proffers a three-pronged argument for why the motion to dismiss should be denied. First, Kinetic argues that the bulk of the issues before this court are federal claims arising under federal law, and state forum-closing statutes should not prevent their resolution in federal court. Second, Kinetic argues that the motion to dismiss on this ground was not timely filed, and finally, Kinetic argues that should it be necessary for it to do so, it will present evidence that it is not "required to obtain a certificate of authority" under the Georgia statute.

There is substantial merit in Kinetic's position that the state forum-closing statute does not prohibit the maintenance of a federal cause of action in federal court. The United States Supreme Court has held in Woods v. Interstate Realty Company, 337 U.S. 535, 69 S.Ct. 1235, 93 L.Ed. 1524 (1949), that the doctrine of Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), requires that where a plaintiff in federal court in a diversity case would be barred from bringing the action in state court, the federal court is likewise barred from hearing the case. In other words, in a diversity case, a plaintiff who could not sue in the state courts of the forum cannot sue in the federal court. This case, obviously, does not apply to claims arising under federal law. In Re Leeds Homes, Inc., 222 F.Supp. 20 (D.C.Tenn.1963), aff'd, 332 F.2d 648 (6th Cir.1964), cert. denied, 379 U.S. 836, 85 S.Ct. 71, 13 L.Ed.2d 43 (1964). Leading commentators concur with this rule. "If subject matter jurisdiction is not based upon diversity of citizenship, the federal court need not apply forum state restrictions on a corporation's ability to sue." 6 Wright & Miller, Federal Practice and Procedure, § 1561, p. 735, and cases cited therein. This court concludes that with respect to plaintiff Kinetic Concept's federal law claims, Georgia's forum-closing statute does not apply.

Additional support for this view is found in the fact that these claims arise under the patent laws of the United States. Federal courts have exclusive jurisdiction over patent claims. 28 U.S.C. § 1338(a); United States v. American Bell Telephone Company, 159 U.S. 548, 16 S.Ct. 69, 40 L.Ed. 255 (1895). Thus, the policy of closing the doors to the federal courthouse when the doors to the state courthouse are not open due to operation of state law does not apply in the present case. With respect to the federal claims in this matter, the state courts of Georgia or any other non-federal forum would have had no jurisdiction to consider them. It is therefore difficult to put forward a valid basis upon which this court could defer to Georgia's forum-closing statute as to Kinetic's federal claims. As the Fifth Circuit has noted in connection with Florida's forum-closing statute:

Such provision does not limit the jurisdiction of the federal district courts in Florida. Only Congress has the prerogative of defining the jurisdiction of the lower federal courts.

Norman M. Morris Corporation v. Weinstein, 466 F.2d 137, 142 (5th Cir.1972). The court in Norman M. Morris concluded that where the district court had jurisdiction under federal statutes respecting importation of goods which bear a false designation of their origin, Florida's forum-closing statute could not limit the court's jurisdiction. This court concurs and therefore the defendants' motion to dismiss the plaintiff's federal claims is DENIED.

The motion to dismiss plaintiff's pendent state claims stands on a somewhat different ground. As noted above, the United States...

To continue reading

Request your trial
3 cases
  • Health Horizons v. STATE FARM MUT. AUTO.
    • United States
    • Georgia Court of Appeals
    • July 29, 1999
    ...or other defensive pleadings. See Morgan Guaranty Trust Co. &c. v. Blum, 649 F.2d 342 (5th Cir.1981); Kinetic Concepts, Inc. v. Kinetic Concepts, 601 F.Supp. 496 (N.D.Ga.1985). ...
  • Commodity Inv. Res. Co. v. JPMorgan Chase Bank, N.A.
    • United States
    • U.S. District Court — Northern District of Georgia
    • June 21, 2019
    ...Erie R. Co. v. Tompkins, 304 U.S. 64 (1938) and progeny) (citations and punctuation omitted); Kinetic Concepts, Inc. v. Kinetic Concepts, Inc., 601 F. Supp. 496, 498-99 (N.D. Ga. 1985) ("[I]n a diversity case, a plaintiff who could not sue in the state courts of the forum cannot sue in the ......
  • INTERNATIONAL CAPITAL EQUIP. v. COMPUTER ATLANTA
    • United States
    • U.S. District Court — Northern District of Georgia
    • April 17, 1989
    ...court cannot entertain a claim if the courts of the forum state could not entertain the same claim. Kinetic Concepts Inc. v. Kinetic Concepts Inc., 601 F.Supp. 496 (N.D.Ga.1985). 2 Since the court holds that plaintiff is not transacting business in Georgia because its activities constitute ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT