Popsockets, LLC v. Hueffner
| Decision Date | 24 September 2018 |
| Docket Number | Case No. 17-cv-827-pp |
| Parties | POPSOCKETS, LLC, Plaintiff, v. CRAIG HUEFFNER, INDIVIDUALLY AND d/b/a ABSOLUTE MARKETING, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
ORDER DENYING DEFENDANT'S MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND FAILURE TO STATE A CLAIM (DKT. NOS. 19, 21, 25); DENYING PLAINTIFF'S CIVIL LOCAL RULE 7(h) MOTION TO STRIKE (DKT. NO. 20); CONSTRUING DEFENDANT'S MOTION TO VACATE JUDGMENT AS A MOTION TO VACATE DEFAULT AND GRANTING MOTION (DKT. NO. 23); ORDERING THE CLERK TO VACATE THE ENTRY OF DEFAULT; GRANTING PLAINTIFF'S MOTION FOR RECONSIDERATION OF MOTION FOR ENTRY OF DEFAULT JUDGMENT, BUT DECLINING TO REVERSE THAT DECISION (DKT. NO. 30); AND GRANTING PLAINTIFF'S MOTION TO STRIKE (DKT. NO. 36)
The plaintiff filed this case over fifteen months ago. It has spent a chunk of that fifteen months trying to effect service on the nomadic defendant. The plaintiff eventually managed to effect service, and the defendant has appeared. This order disposes of all pending motions.
This case began in June of 2017, when the plaintiff filed a complaint alleging two counts of patent infringement under 35 U.S.C. §271 against defendant Craig Hueffner, individually and through his business, Absolute Marketing. Dkt. No. 1. The case immediately bogged down when the plaintiff found it difficult to find the defendant, and thus to serve him. See dkt. no. 29 at 17-20 ().
After almost five months, the plaintiff—believing that it properly had served the defendant at least twice—asked the clerk of court to enter default. Dkt. No. 11. The clerk's office did so, and on November 17, 2017, the plaintiff filed a motion for default judgment. Dkt. No. 13. Only a few days later, on November 21, 2017, the court received the defendant's answer to the complaint, dkt. no. 18, along with a motion to dismiss the complaint, dkt. no. 19. This generated a spate of activity: (1) on November 29, 2017, the plaintiff filed a Rule 7(h) expedited non-dispositive motion to strike the defendant's answer and his motion to dismiss, dkt. no. 20; (2) on December 4, 2017, the defendant filed another motion to dismiss the complaint, dkt. no. 21; (3) on the same day, the defendant filed a motion to vacate judgment, dkt. no. 23; and (4) on January 22, 2017, the defendant filed motion to stay or motion to dismiss, dkt. no. 25.
On June 20, 2018, the court held a hearing to discuss the status of the case. Dkt. No. 28. The court chronicled the plaintiff's attempts at service, and heard telephonic testimony from the defendant about his whereabouts and about how he became aware of the case. Id.; see also dkt. no. 29. The defendant informed the court that he did not live anywhere, testifying that he spent his time traveling from place to place and living in hotels. Dkt. No. 29 at 7. He admitted to listing 725 Sydney Drive, Racine, Wisconsin on his driver'slicense; he said that his parents owned that property. Id. at 9. He initially stated that he had learned of the case through "PACER1 monitor," but later explained that he had learned about it when he "Googled" his last name. Id. at 12. He testified that once he found out about the lawsuit, Id. at 11.
After hearing this testimony, the court denied the plaintiff's motion for default judgment because (1) it concluded that the only appropriate service on the defendant had occurred through publication summons and that the defendant had filed his answer by the deadline specified in that summons; and (2) it was not convinced that it had personal jurisdiction over the defendant. Id. The court gave the plaintiff two weeks to file a brief on the personal jurisdiction question.
On July 13, 2018, the plaintiff filed its brief regarding personal jurisdiction, and a motion asking the court to reconsider its denial of the plaintiff's motion for default judgment. Dkt. Nos. 30, 31. The plaintiff made the motion to reconsider under Federal Rule of Civil Procedure. 54(b), arguing that the defendant's testimony at the June hearing constituted "newly discovered evidence." Dkt. No. 30 at 1. It argued (1) that the court had general, personal jurisdiction over the defendant because the defendant should be considered "domiciled" in Wisconsin, dkt. no. 31 at 1-11; (2) that the court shouldconsider the defendant's "dwelling or usual place of abode" to be 725 Sydney Drive Racine, Wisconsin, id. at 16; and (3) that given this, the plaintiff's July 14, 2017 service on the defendant at that address meant that he had defaulted, by failing to answer by August 4, 2017, id. at 21-22.
Along with the motion and supporting brief, the plaintiff's counsel filed a supporting declaration and attached several exhibits. Dkt. Nos. 32, 32-1 through 32-12. In response, the defendant filed a "declaration," attesting to why he did not believe the court had personal jurisdiction over him. Dkt. No. 33. The plaintiff filed a reply. Dkt. No. 34. Well over a month later, the defendant filed a document he called a "response and declaration to plaintiffs memorandum date 7/13/18," dkt. no. 35, along with a forty-one page attachment, dkt. no. 35-1. The plaintiff asked the court to strike this "response and declaration," arguing that the court did not give the defendant leave to file it, and that although the defendant called it a "declaration," it wasn't signed. Id. at 1. The plaintiff also addressed the merits of the statements the defendant had made in the declaration.
"Federal courts are courts of limited jurisdiction." Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701 (1982). Article III, §2, cl. 1 of the United States Constitution mandates that federal courts may decide only those cases that arise under the United States Constitution or the laws of the United States ("federal question" jurisdiction, codified in 28 U.S.C. §1331), or to cases between citizens of different states ("diversity" jurisdiction,codified in 28 U.S.C. §1332). This constitutional mandate that federal courts can decide only those cases that involve certain subjects is called "subject-matter jurisdiction." If a federal court does not have subject-matter jurisdiction, it cannot decide the case. Parties can't agree to give the court subject-matter jurisdiction if it does not have it. Id. at 702. A party can't waive subject-matter jurisdiction. Id.
There is also a requirement that federal courts have "personal jurisdiction" over the parties to the lawsuit. Even if the court has subject-matter jurisdiction (because the case arises under the Constitution or a federal law, or because the parties are "diverse"), it may not have "personal jurisdiction" over the parties.
The requirement that a court have personal jurisdiction flows not from Art. III, but from the Due Process Clause. The personal jurisdiction requirement recognizes and protects an individual liberty interest. It represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty. Thus, the test for personal jurisdiction requires that "the maintenance of the suit . . . not offend 'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316 . . . (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463 . . . (1940)).
Id. at 702-703. For a federal court to have personal jurisdiction, the plaintiff must show that "[the] defendant must have purposefully established minimum contacts with the forum." Cent. States, Se. and Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 942-43 (7th Cir. 2000) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-46 (1985)). The question a court must answer in deciding whether it has personal jurisdiction over a defendant is "whether the defendant's conduct and connection with the forumare such that it should reasonably anticipate being hailed into court there . . . ." Id. at 943.
The plaintiff alleges that the defendant infringed its patents in violation of 35 U.S.C. §271. Dkt. No. 1 at ¶5. That statute—35 U.S.C. §271—is a federal law. This court has subject-matter jurisdiction over the plaintiff's claim, then, because it involves a federal question, 28 U.S.C. §1331, and because district courts have original jurisdiction over patent claims, 28 U.S.C. §1338(a).
In his declaration about personal jurisdiction, the defendant stated that "[t]his lawsuit will not amount to over $75,000." Dkt. No. 33 at 1. He also stated that "diversity of citizenship applies here I believe." Id. The requirement that a lawsuit involve $75,000 or more is not relevant to personal jurisdiction. It relates to subject-matter jurisdiction. As the court noted, Article III of the Constitution gives federal courts jurisdiction over cases between citizens of different states—"diversity" jurisdiction. The law that codifies that requirement is 28 U.S.C. §1332. That law gives courts original diversity jurisdiction over cases between citizens of different states if "the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. §1332(a).
The defendant's belief that "diversity of citizenship applies here" is incorrect. If the plaintiff had sued the defendant on, say, a state contract claim, the only way this federal court could have decided the case would have been if the court had diversity subject-matter jurisdiction. The plaintiff then wouldhave had to show that the plaintiff and the defendant were citizens of different states, and it would have had to show that the amount in controversy exceeded $75,000. But the plaintiff has not sued the defendant on a state-court claim. It has sued under a ...
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