St. Clair Intellectual Prop. Consultants, Inc. v. Samsung Elecs. Co.
| Decision Date | 29 March 2013 |
| Docket Number | Civil Action No. 12-69-LPS |
| Parties | ST. CLAIR INTELLECTUAL PROPERTY CONSULTANTS, INC., Plaintiff, v. SAMSUNG ELECTRONICS CO. LTD., SAMSUNG ELECTRONICS AMERICA, INC. AND SAMSUNG TELECOMMUNICATIONS AMERICA, LLC, Defendants. |
| Court | U.S. District Court — District of Delaware |
Richard D. Kirk, Stephen B. Brauerman, BAYARD, P.A., Wilmington, DE.
R. Terrance Rader, Charles W. Bradley, Glenn E. Forbis, RADER, FISHMAN & GRAUER PLLC, Bloomfield Hills, MI.
Attorneys for Plaintiff.
Adam W. Poff, Monte Squire, YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, DE.
Roderick R. McKelvie, Kevin B. Collins, Brian G. Bieluch, Jonathan Herczeg, COVINGTON & BURLING LLP, Washington, DC.
Attorneys for Defendants.
March 29, 2013
Wilmington, Delaware
Pending before the Court is Defendants' Motion to Dismiss. (D.I. 9) For the reasons set forth below, the Court will deny Defendants' motion.
On December 30, 2011, St. Clair Intellectual Property Consultants, Inc. ("St. Clair" or "Plaintiff") filed a complaint against Samsung Electronics USA, Inc. ("SE USA"). See St. Clair Intellectual Property Consultants, Inc. v. Samsung Electronics USA, Inc., No. 11-1306 (D. Del. Dec. 30, 2011) [hereinafter Samsung I]. In Samsung I, St. Clair alleged that SE USA willfully infringed six of St. Clair's patents: U.S. Patent Nos. 5,710,929; 5,758,175; 5,892,959; 6,079,025; 5,630,163; and 5,822,610, by selling and distributing smartphones, tablets, and netbooks that use the Android operating system. On January 20, 2012, St. Clair voluntarily dismissed Samsung I pursuant to Federal Rule of Civil Procedure 41(a)(l)(A)(i). See Notice of Dismissal, No. 11-1306 (D. Del. Jan. 20, 2012).
That same day, St. Clair filed a complaint against Samsung Electronics America, Inc. ("SEA") and Samsung Telecommunications America, LLC ("STA"). See St. Clair Intellectual Property Consultants, Inc. v. Samsung Electronics America, Inc., No. 12-58 (D. Del. Jan. 20, 2012) [hereinafter Samsung II]. St. Clair alleged that SEA and STA willfully infringed the same patents identified in Samsung I, by selling and distributing the same smartphones, tablets, and netbooks that use the Android operating system. On January 23, 2012, St. Clair dismissed Samsung II pursuant to Rule 41(a)(l)(A)(i). See Notice of Dismissal, No. 12-58 (D. Del. Jan. 23, 2012).
That same day, St. Clair filed the present suit against Samsung Electronics Co. Ltd.("SEC"), SEA, and STA (collectively, "Samsung" or "Defendants"). (D.I. 1) Like Samsung I and Samsung II, St. Clair alleges Defendants willfully infringe the same six patents previously asserted by selling and distributing the same smartphones, tablets, and netbooks.
On May 2, 2012, Defendants moved to dismiss the case pursuant to Federal Rules of Civil Procedure 12(b)(6) and 41(a)(1)(B). (D.I. 9)
The sufficiency of pleadings for non-fraud cases is governed by Rule 8 of the Federal Rules of Civil Procedure, which requires "a short and plain statement of the claim showing that the pleader is entitled to relief." When presented with a Rule 12(b)(6) motion to dismiss for failure to state a claim, courts conduct a two-part analysis. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). First, courts separate the factual and legal elements of a claim, accepting "all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions." Id. at 210-11. This first step requires courts to draw all reasonable inferences in favor of the non-moving party. See Maio v. Aetna, Inc., 221 F.3d 472, 500 (3d Cir. 2000). However, the Court is not obligated to accept as true "bald assertions," Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997), "unsupported conclusions and unwarranted inferences," Schuylkill Energy Res., Inc. v. Pa. Power & Light Co., 113 F.3d 405, 417 (3d Cir. 1997), or allegations that are "self-evidently false," Nami v. Fauver, 82 F.3d 63, 69 (3d Cir. 1996).
Second, courts determine "whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.'" Fowler, 578 F.3d at 211 (quotingAshcroft v. Iqbal, 556 U.S. 662, 679 (2009)). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. This is a context-specific determination, requiring the court "to draw on its judicial experience and common sense." Id. at 679. At bottom, "[t]he complaint must state enough facts to raise a reasonable expectation that discovery will reveal evidence of [each] necessary element" of a claim. Wilkerson v. New Media Tech. Charter Sch. Inc., 522 F.3d 315, 321 (3d Cir. 2008) (internal quotation marks omitted).
"[W]hen the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558 (2007) (internal quotation marks omitted). Finally, although a non-fraud claim need not be pled with particularity or specificity, that claim must "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Id. at 555.
Federal Rule of Civil Procedure 41(a)(1) permits a plaintiff to voluntarily dismiss an action, without prejudice, so long as the plaintiff has not previously dismissed another action "based on or including the same claim." If the plaintiff files a second notice of dismissal pursuant to Rule 41(a)(1), the Court must dismiss an action based on or including the same claim with prejudice. See Fed. R. Civ. P. 41(a)(1)(B); Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 394 (1990). This "two dismissal rule" means that a second voluntary dismissal serves as an "adjudication upon the merits" and the doctrine of res judicata applies. See Manning v. South Carolina Dept. of Highway & Public Tramp., 914 F.2d 44, 47 (4th Cir. 1990). The twodismissal rule is designed to limit a plaintiff's ability to dismiss an action and encourage plaintiffs to diligently prepare their papers, to curb potential abuses of the judicial system. See Cooter, 496 U.S. at 397-98.
A. Applicability of Rule 41(a)(1)
The parties do not appear to contest the applicability of the Rule 41 (a)(1) dismissal of Samsung II. The central issue between the parties is whether Samsung I is also a voluntary dismissal against the current Defendants. Defendants claim that SE USA is a Samsung entity with sufficient relations to the present Defendants such that Rule 41(a)(1)(B) requires this Court to dismiss the case based on Samsung I and Samsung II. Plaintiff claims that because SE USA was void at the commencement of Samsung I and because SE USA has no relationship with Defendants, the Samsung I dismissal does not count as a Rule 41(a)(1) dismissal against Defendants.
Plaintiff argues that the two dismissal rule is inapplicable because Samsung I was a suit against SE USA, a defunct corporation which could not sue or be sued. Plaintiff argues that because SE USA failed to pay its franchise tax obligation, it became defunct by 2006. (D.I. 14 at 7-8) Under 8 Del. Code § 278, Plaintiff argues that SE USA could not be sued after the three-year statutory dissolution period. (Id. at 8) Therefore, Plaintiff contends that Defendants failed to establish that any claim could exist against SE USA.
Defendants argue that the status of SE USA is irrelevant. Specifically, Defendants cite to Federal Rule of Civil Procedure 3, which states that "[a] civil action is commenced by filing acomplaint with the court." Thus, in Defendants' view, Plaintiff commenced an action that was thereafter voluntarily dismissed under Rule 41(a)(1), whether or not SE USA was void. (D.I. 16 at 4)
On this issue, the Court agrees with Defendants. Plaintiff commenced Samsung I when it filed its complaint on December 30, 2011. Defendants persuasively analogize this case to Lake at Las Vegas Investors Grp., Inc. v. Pacific Malibu Dev. Corp., 933 F.2d 724, 726 (9th Cir. 1991), in which the plaintiffs argued that they did not fall within Rule 41(a)(1) because their prior suit was against a foreign corporation not registered in the state. Under Nevada law, an unregistered foreign corporation cannot commence, maintain, or defend an action. The Ninth Circuit rejected plaintiffs' argument, stating that lack of capacity is an affirmative defense, and, under Nevada Rule of Civil Procedure 3, an action is commenced upon filing of the complaint. See id. Likewise, here, Federal Rule of Civil Procedure 3 states that an action commences upon the filing of the complaint. Thus, the status of SE USA is irrelevant to the application of Rule 41 (a)(1). Plaintiff filed and voluntarily dismissed a claim against SE USA in Samsung I and, therefore, Samsung I falls within Rule 41(a)(1).
The two dismissal rule bars Plaintiff's suit if the Court finds that Plaintiff previously dismissed actions based on or including the same claims. See Fed. R. Civ. P. 41(a)(1)(B). Both sides agree that while the text of Rule 41(a)(1)(B) does not expressly require "privity," some degree of relationship is required to dismiss a party under the two dismissal rule. (D.I. 14 at 11; D.I. 16 at 7; see also 5 James Wm. Moore et al., Moore's Fed. Practice § 41.04 (2d ed. 1996) ())
Several courts have held that the two dismissal rule applies if the defendants are the same, substantially the same, or in privity with each other. See,...
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