Miller Pipeline Corp. v. British Gas plc

• Decision Date: 10 October 1995
• Docket Number: No. IP 94-1421C-B/S.,IP 94-1421C-B/S.
• Parties: MILLER PIPELINE CORPORATION, Plaintiff, v. BRITISH GAS plc, a corporation of Great Britain, Defendant.
• Court: U.S. District Court — Southern District of Indiana

901 F. Supp. 1416

MILLER PIPELINE CORPORATION, Plaintiff, v. BRITISH GAS plc, a corporation of Great Britain, Defendant.

No. IP 94-1421C-B/S.

United States District Court, S.D. Indiana, Indianapolis Division.

October 10, 1995.

COPYRIGHT MATERIAL OMITTED

Donald E. Knebel, Barnes & Thornburg, Indianapolis, Indiana, for Plaintiff.

William C. Barnard, Sommer & Barnard, Indianapolis, Indiana, Marvin Petry, Larson & Taylor, Arlington, Virginia, for Defendant.

ENTRY

BARKER, Chief Judge.

This is before the Court on the defendant British Gas plc's ("British Gas") Motion to Dismiss, Transfer or Stay. For the reasons discussed below, the Motions to Dismiss and Transfer are denied and the Motion to Stay is denied as moot.

I. Background

The facts relevant to this Motion are as follows. Plaintiff Miller Pipeline Corporation ("Miller") is an Ohio corporation, with its principal place of business in Indianapolis, Indiana. Defendant British Gas plc ("British Gas") is a corporation of Great Britain, with its principal place of business in London, England. Miller provides products and services relating to the trenchless repair and replacement of pipes, or "pipe bursting", in the United States. Miller asserts that British Gas also provides products and services relating to trenchless repair/replacement, or "pipe bursting", in the United States.

Trenchless repair/replacement operations facilitate the repair of damaged pipes and replacement of pipes having inadequate capacity. Devices known as "moles" enable repair/replacement operations to be carried out without digging a trench to expose the pipe being replaced. Complaint, ¶ 5. The mole is placed in a hole and moved along inside the damaged pipe, breaking the pipe, expanding the surrounding dirt, and pulling the replacement pipe into position. Id., ¶ 6.

In the early 1980's, Ian Yarnell invented a new type of mole which uses an expandable shell which can be forced outwardly against the sides of a pipe, simultaneously breaking and expanding the pipe to make room for a replacement pipe. The expandable shell of the Yarnell mole moves intermittently through the pipe. When the mole is stationary, the shell expands, contacting the pipe walls over a relatively large surface, breaks the pipe, and then moves to a new position to repeat the process. Id., ¶ 11. Yarnell applied for and received U.S. Patent No. 4,789,268 ("the '268 patent") for his mole and the methods for using it. Id., ¶ 12. Miller is the owner of all rights, title, and interest in and to the '268 patent. Miller's products used for trenchless operations are marketed under the name "XPANDIT", and include the Yarnell mole and other devices. Id., ¶ 14.

Miller alleges that British Gas markets a hydraulic pipe bursting system in the United States for use in the trenchless repair and replacement of pipes. Id., ¶ 16. The complaint charges that British Gas' system includes a mole which also moves intermittently through the pipe. British Gas' mole allegedly uses an expandable shell which expands when the mole is stationary to contact the pipe over a large surface. Id., ¶ 17. British Gas is the assignee of record on U.S. Patent No. 4,738,565 to Streatfield, et al. ("the '565 patent") and U.S. Patent No. 4,720,211 to Streatfield et al. ("the '211 patent"). Id., ¶ 22. Both the '565 and '211 patents describe a different type of mole, one which utilizes blades at the front portion of the device to crack the walls of a pipe, and then displaces the cracked pipe walls with its larger rear portion as it moves forward through the pipe. Id., ¶ 22. British Gas has granted licenses on the '565 and '211 patents to various U.S. licensees, including PIM Corporation, a New Jersey Corporation, and other U.S. companies not located in Indiana. Declaration of Frank S.D. Roper, ¶ 14.

Miller claims that in June, 1989, British Gas alleged that Miller's products, particularly the Yarnell mole, infringed the '565 and '211 patents. Complaint, ¶ 23. Miller further alleges that after witnessing a demonstration of the use of the Miller products including the Yarnell mole in Fredericksburg, Virginia in August, 1990, British Gas no longer asserted the '565 and '211 patents against Miller. Id., ¶¶ 24-25.

Miller alleges that British Gas has since contacted Miller's customers who were carrying out trenchless repair/replacement operations using the Miller XPANDIT system, asserting that British Gas may be entitled to royalties for their trenchless operations. For example, on May 31, 1994, British Gas sent a letter to Mountain Cascade, Inc., a Miller customer located in Livermore, California, requesting that Mountain Cascade "take notice" of the '565 patent and indicating that British Gas was willing to grant a license to Mountain Cascade for carrying out pipe bursting or pipe cracking operations. Complaint, ¶¶ 27-28, exhibit C.

Miller has filed this suit against British Gas alleging in Count I that British Gas has engaged in "deliberate and unfounded efforts to confuse Miller's customers by calling attention to the '565 patent and implying that the use of the Miller XPANDIT system infringes ... the '565 patent" Complaint, ¶ 33. Miller claims that these actions are an attempt by British Gas to monopolize the sale of products and services relating to trenchless repair/replacement in the United States, in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. In Count 2 of its claim, Miller alleges that British Gas (through its U.S. licensee PIM) infringes the '268 patent by making, using and/or selling hydraulic pipe bursting systems.

The Complaint states that subject matter jurisdiction over the above described claims arises under 28 U.S.C. §§ 1331 and 1338, that personal jurisdiction is proper under 15 U.S.C. § 22 (Clayton Act, § 12), and that venue is proper under 28 U.S.C. § 1391(d). Complaint, ¶ 4. Defendant British Gas brings this motion to Dismiss for lack of Personal Jurisdiction under Fed.R.Civ.P. 12(b)(2), or in the alternative, to transfer the case to the U.S. District Court for the District of Columbia pursuant to 28 U.S.C. §§ 1406 and/or 1631.¹

II. Analysis

A. Motion to Dismiss for Lack of Personal Jurisdiction

Two questions must be answered to determine whether British Gas is subject to the personal jurisdiction of this Court. First, we must determine whether British Gas is amenable to process in this District. Second, we must determine whether haling British Gas into this Court is in accord with due process principles. U.S. v. De Ortiz, 910 F.2d 376, 382 (7th Cir.1990), citing Omni Capital Intern. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104, 108 S.Ct. 404, 409, 98 L.Ed.2d 415 (1987).

1. Service of Process

Personal jurisdiction generally is determined in accordance with Rule 4 of the Federal Rules of Civil Procedure. See, Insurance Corp. of Ireland v. Compagnie des Bauxites, 456 U.S. 694, 715 n. 6, 102 S.Ct. 2099, 2111 n. 6, 72 L.Ed.2d 492 (1982). In particular, Fed.R.Civ.P. 4(k)(1)(D) provides that service of process "is effective to establish jurisdiction over the person of a defendant ... when authorized by a statute of the United States". See also, Omni Capital, 484 U.S. at 104, 108 S.Ct. at 409, quoting, Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 444-45, 66 S.Ct. 242, 245-46, 90 L.Ed. 185 (1946) ("Service of process is the procedure by which a court having venue and jurisdiction of the subject matter of the suit asserts jurisdiction over the person or the party served."); De Ortiz, 910 F.2d at 381-2, citing Omni Capital, 484 U.S. at 105, 108 S.Ct. at 410 (in federal question cases, amenability to service of process is determined by looking to the applicable federal statute).

British Gas argues that Rule 4(k)(1)(D) fails to provide a basis for personal jurisdiction because no federal statute applies in this case to authorize jurisdiction.

Plaintiff Miller relies, as the basis for personal jurisdiction over British Gas, upon Section 12 of the Clayton Act, 15 U.S.C. § 22 ("section 22"), which governs jurisdiction and venue in actions against corporations under the antitrust laws. Section 22 provides that:

Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found.

15 U.S.C. § 22. (emphasis added).

British Gas claims that the service of process provision of section 22 cannot authorize personal jurisdiction unless the venue provision of Section 22 has also been satisfied. In other words, British Gas claims that because it is not an inhabitant, is not found in and does not transact business in this district, section 22 does not apply. However, in all federal actions against aliens, the applicable venue provision is 28 U.S.C. § 1391(d) ("section 1391(d)"), which provides that "an alien may be sued in any district." 28 U.S.C. § 1391(d); Brunswick Corp v. Suzuki Motor Co. Ltd, 575 F.Supp. 1412, 1425 (E.D.Wis. 1983). See also Pure Oil v. Suarez, 384 U.S. 202, 86 S.Ct. 1394, 16 L.Ed.2d 474 (1966) (special venue provisions such as section 22 supplement rather than pre-empt general venue statutes such as section 1391(d)); VE Holding Corp v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed.Cir.1990), cert. denied, 499 U.S. 922, 111 S.Ct. 1315, 113 L.Ed.2d 248 (1991); In re Regents of University of California, 964 F.2d 1128, 1132 (Fed. Cir.1992). In fact, the "principle of broad and overriding application" stated by section 1391(d) is to prevent an alien defendant from using a narrower venue provision in another statute (such as Section 12 of the Clayton Act) as a "shield against suit". Go-Video v. Akai Electric Company, Ltd., 885 F.2d 1406, 1410 (9th Cir.1989) quoting, Brunette Machine Works Ltd. v. Kockum Industries, Inc., 406 U.S. 706,...