Sprint Commc'ns Co. L.P. v. Charter Commc'ns, Inc.
| Decision Date | 16 March 2021 |
| Docket Number | Civil Action No. 17-1734-RGA |
| Parties | SPRINT COMMUNICATIONS COMPANY L.P., Plaintiff; v. CHARTER COMMUNICATIONS, INC., CHARTER COMMUNICATIONS HOLDINGS, LLC, SPECTRUM MANAGEMENT HOLDING COMPANY, LLC, CHARTER COMMUNICATIONS OPERATING, LLC, BRIGHT HOUSE NETWORKS, LLC, Defendants. |
| Court | U.S. District Court — District of Delaware |
Christina B. Vavala and Stephen J. Kraftschik, POLSINELLI PC, Wilmington, DE; Aaron E. Hankel, B. Trent Webb, John D. Garretson, Jonathan M. Hernandez, Jordan T. Bergsten, Lauren E. Douville, Lydia C. Raw, Mark D. Schafer, Ryan D. Dykal, and Ryan J. Schletzbaum, SHOOK, HARDY & BACON LLP, Kansas City, MO; Michael W. Gray and Robert H. Reckers, SHOOK, HARDY & BACON LLP, Houston, TX, attorneys for Plaintiff Sprint Communications Company LP.
Kelly E. Farnan, RICHARDS, LAYTON & FINGER PA, Wilmington, DE; Alex Henriques, Robert A. Appleby, Ryan Kane, James E. Marina, Gregory Arovas, and Jeanne M. Heffernan, KIRKLAND & ELLIS LLP, New York, NY; Bao T. Nguyen, KIRKLAND & ELLIS LLP, San Francisco, CA; Gregory Polins, KIRKLAND & ELLIS LLP, Chicago, IL; Luke Dauchot, KIRKLAND & ELLIS, LLP, Los Angeles, CA; Daniel L. Reisner, David S. Benyacar, and Michael Block, ARNOLD & PORTER KAYE SCHOLER LLP, New York, NY; Robert J. Katerberg, ARNOLD & PORTER KAYE SCHOLER LLP, Washington, DC; Thomas T. Carmack, ARNOLD & PORTER KAYE SCHOLER LLP, Palo Alto, CA, attorneys for Defendants Charter Communications, Inc. et al. /s/ Richard G. Andrews
Before the Court is Plaintiff's Motion for Partial Summary Judgment Regarding Collateral Estoppel and Equitable Defenses. (D.I. 460). Defendants filed a cross motion for Partial Summary Judgment of No Collateral Estoppel. (D.I. 498). I have reviewed the parties' briefing. (D.I. 461, 502, 525). I heard oral argument on some issues on November 30, 2020. (D.I. 554).
Plaintiff Sprint Communications currently asserts claims from nine1 patents against Defendants Charter Communications, Charter Communications Holdings, Spectrum Management Holding Company, Charter Communications Operating, and Bright House Networks. Plaintiff asserts that Defendants' Voice-over-IP ("VoIP") systems infringe these patents, which can be grouped into the Call Control Patents, the Broadband Patents, and the Enhanced Services Patent. The Call Control Patents are Nos. 6,452,932 ("the '932 Patent"), 6,463,052 ("the '052 Patent"), 6,633,561 ("the '3,561 Patent"), 7,286,561 ("the '6,561 Patent"), and 7,505,454 (the '454 Patent"). The Broadband Patents are Nos. 6,343,084 ("the '084 Patent"), 6,473,429 ("the '429 Patent"), and 6,298,064 ("the '064 Patent"). Patent No 6,697,340 ("the '340 Patent") is the Enhanced Services Patent.
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R.Civ. P. 56(a). The moving party has the initial burden of proving the absence of a genuinely disputed material fact relative to the claims in question. Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). Material facts are those "that could affect the outcome" of the proceeding, and "a dispute about a material fact is 'genuine' if the evidence is sufficient to permit a reasonable jury to return a verdict for the nonmoving party." Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The burden on the moving party may be discharged by pointing out to the district court that there is an absence of evidence supporting the non-moving party's case. Celotex, 477 U.S. at 323.
The burden then shifts to the non-movant to demonstrate the existence of a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Williams v. Borough of West Chester, Pa., 891 F.2d 458, 460-61 (3d Cir. 1989). A non-moving party asserting that a fact is genuinely disputed must support such an assertion by: "(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials; or (B) showing that the materials cited [by the opposing party] do not establish the absence . . . of a genuine dispute . . . ." Fed. R. Civ. P. 56(c)(1).
When determining whether a genuine issue of material fact exists, the court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 380 (2007); Wishkin v. Potter, 476 F.3d 180, 184 (3d Cir. 2007). A dispute is "genuine" only if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson, 477 U.S. at 247-49. If the non-moving party fails to make a sufficient showing on an essential element of its casewith respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. See Celotex Corp., 477 U.S. at 322.
Collateral estoppel, also known as issue preclusion, bars parties from re-litigating matters that they had a full and fair opportunity to litigate. Montana v. United States, 440 U.S. 147, 153 (1979). This "protects their adversaries from the expense and vexation attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action by minimizing the possibility of inconsistent decisions." Id. at 153-54.
In a patent case, the law of the regional circuit applies to collateral estoppel generally and Federal Circuit precedent applies where the determination of collateral estoppel involves substantive issues of patent law. Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013). Thus, Third Circuit law applies here. The Third Circuit analyzes four requirements for the application of collateral estoppel: "(1) the identical issue was previously adjudicated; (2) the issue was actually litigated; (3) the previous determination was necessary to the decision; and (4) the party being precluded from relitigating the issue was fully represented in the prior action." Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244, 249 (3d Cir. 2006) (citation omitted). The Third Circuit has "also considered whether the party being precluded 'had a full and fair opportunity to litigate the issue in question in the prior action.'" Id. (quoting Seborowski v. Pittsburgh Press Co., 188 F.3d 163, 169 (3d. Cir. 1999)).
Plaintiff's preclusion arguments arise from Defendants' involvement in a prior action between Plaintiff and Time Warner Cable in the United States District Court for the District of Kansas ("the Kansas Action"). See Sprint Commc'ns Co. v. Time Warner Cable, Inc., 255 F.Supp. 3d 1134 (D. Kan. 2017), aff'd, 760 F. App'x 977 (Fed. Cir. 2019). During the pendency of the suit, Defendants merged with Time Warner Cable. (D.I. 462-1, Exh. G at 235 of 755). In the Kansas Action, the jury found that Time Warner Cable infringed each of the asserted claims in five of Plaintiff's patents and that none of the claims were invalid. Sprint Commc'ns Co., 255 F. Supp. 3d at 1137-38. Based on this prior action, Plaintiff argues that Defendants should be precluded from re-litigating validity of the patents and patent claims at issue in the Kansas Action, and the same issues that were adjudicated in the Kansas Action (to wit, the Call Control and Broadband Patents' compliance with § 112 and the doctrine of equivalents). (D.I. 461 at 5).
The parties dispute the first and the fourth factors of issue preclusion: whether the identical issue was previously adjudicated and whether the party being precluded from relitigating the issue was fully represented in the prior action.
Plaintiff argues that Defendants were fully represented and had a full and fair opportunity to litigate in the Kansas Action. (D.I. 461 at 8). Plaintiff asserts that after the merger between Defendants and Time Warner Cable in May 2016, Defendants were in control of the Kansas Action litigation, including the jury trial and the appeals. (Id. at 9).
Defendants argue that since the merger took place after claim construction, fact and expert discovery, and most of summary judgment briefing, most of the important decisions in the litigation had been made, leaving them without "effective choice as to the legal theories and proofs." (D.I. 502 at 8). Because of this, Defendants contend that the Kansas Action has no preclusive effect as they did not have control over nor were parties to the Kansas Action. (Id. at 2).
As a general principle, "one is not bound by a judgment in personam in a litigation in which he is not designated as a party." Hansberry v. Lee, 311 U.S. 32, 40 (1940). This is because a nonparty to a suit usually has not had a "full and fair opportunity to litigate" the issues in the suit. Taylor v. Sturgell, 553 U.S. 880, 895 (2008). However, there are six recognized exceptions to this general rule, id. at 893, and three have been raised in this case: "substantive legal relationship," "represented by someone with the same interests," and "assumed control." Id. at 893-95; (D.I. 461 at 8-12). I need only address the third of these three.
Under the "assumed control" exception, "a nonparty is bound by a judgment if she 'assume[d] control' over the litigation in which that judgment was rendered." Taylor, 553 U.S. at 895 (quoting Montana, 440 U.S. at 154). In other words, a nonparty to an action "who controls or substantially participates in the control of the presentation on behalf of a party is bound by the determination of issues decided as though he were a party." Marshak v. Treadwell, 240 F.3d 184, 195 (3d Cir. 2001) (quoting Restatement (Second) of Judgments § 39). To have...
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