St. Bernard Par. Gov't v. United States

• Decision Date: 20 June 2019
• Docket Number: No. 15-1072C,15-1072C
• Court: Court of Federal Claims
• Parties: ST. BERNARD PARISH GOVERNMENT, Plaintiff, v. UNITED STATES, Defendant.

ST. BERNARD PARISH GOVERNMENT, Plaintiff, v. UNITED STATES, Defendant.

No. 15-1072C

United States Court of Federal Claims

June 20, 2019

Motion for Reconsideration; RCFC 59; Standing.

Robert E. Couhig, Couhig Partners, LLC, New Orleans, LA, for plaintiff. Of counsel were Jason A. Cavignac and Cory S. Grant, Couhig Partners, LLC, New Orleans, LA, and William M. McGoey, St. Bernard Parish Government, New Orleans, LA.

Steven C. Hough, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him were Steven J. Gillingham, Assistant Director, Commercial Litigation Branch, Robert E. Kirschman, Jr., Director, Commercial Litigation Branch, and Joseph H. Hunt, Assistant Attorney General, Civil Division, Department of Justice.

ORDER

HORN, J.

BACKGROUND

On April 4, 2019, the court issued an Opinion in the above-captioned case denying defendant's motion to dismiss. See St. Bernard Par. Gov't v. United States, 142 Fed. Cl. 504, 588 (2019). The court's April 4, 2019 Opinion set forth the facts relevant to the above-captioned case, which are incorporated into this Order. See St. Bernard Par. Gov't v. United States, 142 Fed. Cl. at 508-27. Only certain facts from the court's April 4, 2019 Opinion that are relevant to plaintiff's motion for reconsideration will be repeated in this Order.

On May 2, 2019, defendant's attorney filed a motion for reconsideration of the court's April 4, 2019 Opinion under Rule 59 (2018) of the Rules of the United States Court of Federal Claims (RCFC). RCFC 59(a) permits a party to file a "motion for reconsideration on all or some of the issues," while under RCFC 59(e) a "motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment." See RCFC 59(a), (e). In the above-captioned case, judgment has not been entered, and neither liability nor damages have been established. In the May 2, 2019 motion, defendant argues that this court should reconsider whether plaintiff, St. Bernard Parish Government (St. Bernard Parish), has standing in the above-captioned case. In its earlier motion to dismiss the complaint in this case, defendant argued that a defect in standing cannot be cured after a complaint is filed. St. Bernard Par. Gov't v. United States, 142 Fed. Cl. at 527. In the court's April 4, 2019 Opinion, the court stated that, although the parties disputed whether plaintiff has standing in the above-captioned case, the court found that plaintiff did have standing. See id. at 527, 539. Defendant also argued:

The problem is not that St. Bernard has agreed to pay any recovery from this action to the Pizanis pursuant to the Joint and Reciprocal Agreement—it is that St. Bernard has not suffered an injury in fact because it had not paid the state court judgment when it filed this action and will not pay the state court judgment under the Joint and Reciprocal Agreement.

Id. As stated in the court's April 4, 2019 Opinion:

In plaintiff's opposition to defendant's motion to dismiss, plaintiff did not address whether standing must be determined at the time of the original complaint or whether a defect in standing subsequently can be "cured." At the oral argument, however, plaintiff argued that "I have never heard of that [standing] as something that could not be cured even if it was a problem through amendment."

Id. (alteration in original).

In its April 4, 2019 Opinion, however, the court considered defendant's argument as to whether plaintiff has standing in the above-captioned case and stated:

Regarding defendant's argument that standing "cannot be cured after the inception of the lawsuit," defendant notes that, in Paradise Creations, Inc. v. UV Sales, Inc., which the court notes involved a patent infringement claim, the United States Court of Appeals for the Federal Circuit stated that "a defect in standing cannot be cured after the inception of the lawsuit." SeeParadise Creations, Inc. v. UV Sales, Inc., 315 F.3d at 1310. The United States Court of Appeals for the Federal Circuit, however, specifically had stated earlier in the Opinion in Paradise Creations, Inc. v. UV Sales, Inc. that "this court has determined that in order to assert standing for patent infringement, the plaintiff must demonstrate that it held enforceable title to the patent at the inception of the lawsuit." Id. at 1309 (emphasis in original) (citing Lans v. Digital Equip. Corp., 252 F.3d 1320, 1328 (Fed. Cir. 2001); Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1092 (Fed. Cir. 1998); Jim Arnold Corp. v. Hydrotech Sys., Inc., 109 F.3d 1567, 1572 (Fed. Cir. 1997); and Gaia Techs., Inc. v. Reconversion Techs., Inc., 93 F.3d 774,778 (Fed. Cir. 1996), amendedonothergrounds, 104 F.3d 1296 (Fed. Cir. 1996), withdrawingmandateinpart, 104 F.3d 1298 (Fed. Cir.), reh'gdeniedandsuggestionforreh'genbancdeclined (Fed. Cir. 1997)). Indeed, regarding its patent jurisdiction, the United States Court of Appeals for the Federal Circuit has indicated that:

In the area of patent infringement, this court has held that if the original plaintiff lacked Article III initial standing, the suit must be dismissed, and the jurisdictional defect cannot be cured by the addition of a party with standing, nor by the subsequent purchase of an interest in the patent in suit.

Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198, 1203 (Fed. Cir. 2005) (citations omitted); seealsoAlps S., LLC v. Ohio Willow Wood Co., 787 F.3d 1379, 1385 (Fed. Cir. 2015) ("The party asserting patent infringement is 'required to have legal title to the patents on the day it filed the complaint and that requirement can not be met retroactively.'" (quoting Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1366 (Fed. Cir. 2010), reh'gandreh'genbancdenied, 672 F.3d 1239 (Fed. Cir.), cert.denied, 565 U.S. 825 (2011))), cert.denied, 136 S. Ct. 897 (2016).

In Gaia Technologies, Inc. v. Reconversion Technologies, Inc., which also involved patent and trademark claims, the United States Court of Appeals for the Federal Circuit stated:

If Gaia [which was the plaintiff in the District Court] can prove that it was the assignee of the Intellectual Property at the time the suit was filed, Gaia has standing to sue for patent infringement under 35 U.S.C. § 281 (1994) as a patentee, see 35 U.S.C. § 100(d) (1994) (noting that "patentee" includes those who are successors in title to the patentee), and for trademark infringement under 15 U.S.C. § 1114 as a registrant, see 15 U.S.C. § 1127 (1994) (noting that "registrant" embraces the legal assigns of the registrant). Absent ownership of the Intellectual Property, Gaia lacked standing to sue on the patent and trademark infringement claims.

Gaia Techs., Inc. v. Reconversion Techs., Inc., 93 F.3d at 777 (capitalization in original). The Federal Circuit further stated:

"As a general matter, parties should possess rights before seeking to have them vindicated in court. Allowing a subsequent assignment to automatically cure a standing defect would unjustifiably expand the number of people who are statutorily authorized to sue. Parties could justify the premature initiation of an action by averring to the court that their standing through assignment is imminent. Permitting non-owners and licensees the right to sue, so long as they eventuallyobtain the rights they seek to have redressed, would enmesh the judiciary in abstract disputes, risk multiple litigation, and provide incentives for parties to obtain assignments in order to expand their arsenal and the scope of litigation. Inevitably, delay and expense would be the order of the day."

Id. at 780 (quoting Procter & Gamble Co. v. Paragon Trade Brands, Inc., 917 F. Supp. 305, 310 (D. Del. 1995)). The Federal Circuit, therefore, articulated a reason for requiring standing at the inception of patent infringement and trademark infringement claims. Seeid.

St. Bernard Parish Gov't v. United States, 142 Fed. Cl. at 528-29 (alteration in original). This court also stated that defendant "has not put forth any justification for extending the requirements articulated for standing in a patent infringement case to a non-patent case such as the above-captioned case." Id. at 530.

The court then considered whether plaintiff's April 28, 2017 filing labeled "'FIRST SUPPLEMENTAL AND AMENDING COMPLAINT'" was, under RCFC 15 (2018), an amended complaint or a supplemental complaint and whether a court may examine a supplemental complaint when determining standing. See St. Bernard Parish Gov't v. United States, 142 Fed. Cl. at 530-532 (capitalization in original). The court stated that the "United States Court of Appeals for the Federal Circuit has permitted parties to remedy jurisdictional defects with supplemental complaints in other situations not involving standing in a patent case." Id. at 530. In the April 4, 2019 Opinion, the court noted that, in Prasco, LLC v. Medicis Pharmaceutical Corp., the United States Court of Appeals for the Federal Circuit stated:

Because the Amended Complaint included allegations regarding events that happened after the first complaint, technically it is a supplemental complaint, not an "amended complaint." See Fed.R.Civ.P. [Federal Rule of Civil Procedure] 15(d)[¹] (allowing a party to "serve a supplemental pleading setting forth transactions or occurrences or events which have happened since the date of the pleading sought to be supplemented"); 6A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1504, at 184 ("Parties and courts occasionally confuse supplemental pleadings with amended pleadings and mislabeling is common. However, these misnomers are not of any significance and do not prevent the court from considering a motion to amend or supplement under the proper portion of Rule 15.").

Rule 15(d) expressly allows for supplemental complaints to "cure" defects in the initial complaint. Fed.R.Civ.P. 15(d) ("Permission [to serve a supplemental

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