A. Stucki Co. v. Buckeye Steel Castings Co.

• Decision Date: 19 June 1991
• Docket Number: No. C-2-88-308.,C-2-88-308.
• Citation: 795 F. Supp. 847
• Parties: A. STUCKI COMPANY, Plaintiff, v. BUCKEYE STEEL CASTINGS COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Ohio

795 F. Supp. 847

A. STUCKI COMPANY, Plaintiff, v. BUCKEYE STEEL CASTINGS COMPANY, Defendant.

No. C-2-88-308.

United States District Court, S.D. Ohio, E.D.

June 19, 1991.

Raymond G. Hasley, Pittsburgh, Pa., for plaintiff.

Harry A. Goussetis, Worthington Industries, Inc., Beachwood, Ohio, for defendant.

MEMORANDUM AND ORDER

HOLSCHUH, Chief Judge.

This matter is presently before the Court on defendant's motion for summary judgment.

STATEMENT OF FACTS

Plaintiff A. Stucki Company ("Stucki") is a Delaware corporation with its principal place of business in Pittsburgh, Pennsylvania. Defendant Buckeye Steel Castings Company ("Buckeye Steel") is an Ohio corporation with its principal place of business in Columbus, Ohio. In its amended complaint plaintiff seeks damages for patent infringement (Count I) and for violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968 (Count II).

A somewhat lengthy history of litigation preceded the filing of this action. In summary, U.S. Patent No. 3,837,292, dealing with hydraulic shock absorbers or "snubbers" used on railroad boxcars, was issued to plaintiff in 1974. At that time, and at all relevant times, defendant Buckeye Steel was a 50% owner of Railroad Dynamics, Inc. ("RDI"), a Pennsylvania corporation which was a competitor of plaintiff. Stuart Schwam owned the other 50% of RDI, and Schwam was also RDI's president and a director of RDI. In 1976 RDI filed an action against Stucki, in the United States District Court for the Eastern District of Pennsylvania, seeking to have Stucki's patent held invalid, and Stucki counterclaimed for patent infringement. That action resulted in a jury verdict for Stucki, upholding the validity of Stucki's patent, and a judgment against RDI for patent infringement. See Railroad Dynamics, Inc. v. A. Stucki Co., 579 F.Supp. 353 (E.D.Pa.1983) (denying, inter alia, RDI's motion for judgment notwithstanding the verdict or, in the alternative, for a new trial). The judgment was subsequently affirmed on appeal. Railroad Dynamics, Inc. v. A. Stucki Co., 727 F.2d 1506 (Fed.Cir.), cert. denied, 469 U.S. 871, 105 S.Ct. 220, 83 L.Ed.2d 150 (1984). Shortly thereafter RDI filed for bankruptcy.

Meanwhile, after obtaining the judgment against RDI, plaintiff commenced an action against Schwam and Worthington Industries, Inc. ("Worthington") on November 4, 1983. (Worthington was for much of the relevant time period a part owner of defendant Buckeye Steel.) In that action Stucki sought to hold Schwam and Worthington liable for the patent infringement of RDI, Schwam by virtue of his 50% ownership of and control over the operations of RDI and Worthington by virtue of its ownership interest in defendant Buckeye Steel (not a party to that action¹), the other 50% owner of RDI. That action ultimately resulted in the entry of summary judgment against Schwam, see A. Stucki Co. v. Schwam, 634 F.Supp. 259 (E.D.Pa.), modified, 638 F.Supp. 1257 (E.D.Pa.1986), but a directed verdict in favor of Worthington. The directed verdict for Worthington was affirmed on appeal. See A. Stucki Co. v. Worthington Indus., Inc., 849 F.2d 593 (Fed.Cir.1988).

Stucki commenced this action against Buckeye Steel on March 14, 1988. Stucki seeks to hold Buckeye Steel liable for the infringement committed by RDI by virtue of Buckeye Steel's part ownership interest in RDI and alleged control of RDI's activities. Plaintiff claims that Buckeye Steel is jointly and severally liable, along with Schwam and RDI, for patent infringement and unfair competition and for the wrongful transfer of funds from RDI to Schwam and Buckeye Steel. Plaintiff also alleges that Buckeye Steel is bound by the 1983 judgment in favor of Stucki and against RDI. In its amended complaint, plaintiff has added a RICO claim, alleging that defendant engaged in a pattern of racketeering activity by causing RDI to infringe Stucki's patent.

Defendant filed a lengthy motion for summary judgment on July 13, 1989. Defendant argues that both plaintiff's claims are barred by the applicable statutes of limitations. Defendant also argues that there is no evidence to support a finding of liability for either direct infringement or inducing infringement, and that summary judgment is appropriate on the merits of plaintiff's RICO claim.

DISCUSSION

Fed.R.Civ.P. 56(c) provides:

Summary judgment ... shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

"This standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (emphasis in original); Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984).

Summary judgment will not lie if the dispute about a material fact is genuine; "that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. The purpose of the procedure is not to resolve factual issues, but to determine if there are genuine issues of fact to be tried. Lashlee v. Sumner, 570 F.2d 107, 111 (6th Cir.1978). Therefore, summary judgment will be granted "only where the moving party is entitled to judgment as a matter of law, where it is quite clear what the truth is, ... and where no genuine issue remains for trial, ... for the purpose of the rule is not to cut litigants off from their right of trial by jury if they really have issues to try." Poller v. Columbia Broadcasting Sys., 368 U.S. 464, 467, 82 S.Ct. 486, 488, 7 L.Ed.2d 458 (1962) (quoting Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 729, 88 L.Ed. 967 (1944)); accord County of Oakland v. City of Berkley, 742 F.2d 289, 297 (6th Cir.1984).

In making this inquiry, the standard to be applied by the Court mirrors the standard for a directed verdict. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Anderson, 477 U.S. at 250, 106 S.Ct. at 2511.

"The primary difference between the two motions is procedural; summary judgment motions are usually made before trial and decided on documentary evidence, while directed verdict motions are made at trial and decided on the evidence that has been admitted." Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 745, n. 11 103 S.Ct. 2161, 2171, n. 11, 76 L.Ed.2d 277 (1983). In essence, though, the inquiry under each is the same: whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.

Anderson, 477 U.S. at 251-52, 106 S.Ct. at 2512. Accordingly, although summary judgment should be cautiously invoked, it is an integral part of the Federal Rules, which are designed "to secure the just, speedy and inexpensive determination of every action." Celotex, 477 U.S. at 327, 106 S.Ct. at 2555 (quoting Fed.R.Civ.P. 1).

In a motion for summary judgment the moving party bears the "burden of showing the absence of a genuine issue as to any material fact, and for these purposes, the evidence submitted must be viewed in the light most favorable to the opposing party." Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970) (footnote omitted); accord Adams v. Union Carbide Corp., 737 F.2d 1453, 1455-56 (6th Cir.), cert. denied, 469 U.S. 1062, 105 S.Ct. 545, 83 L.Ed.2d 432 (1984). Inferences to be drawn from the underlying facts contained in such materials must also be considered in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Watkins v. Northwestern Ohio Tractor Pullers Ass'n, 630 F.2d 1155, 1158 (6th Cir.1980). Additionally, "unexplained gaps" in materials submitted by the moving party, if pertinent to material issues of fact, justify denial of a motion for summary judgment. Adickes, 398 U.S. at 157-60, 90 S.Ct. at 1608-10.

If the moving party meets its burden and adequate time for discovery has been provided, summary judgment is appropriate if the opposing party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex, 477 U.S. at 322, 106 S.Ct. at 2552. The existence of a mere scintilla of evidence in support of the opposing party's position is insufficient; there must be evidence on which the jury could reasonably find for the opposing party. Anderson, 477 U.S. at 252, 106 S.Ct. at 2512.

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.

Fed.R.Civ.P. 56(e).

A.

Turning first to plaintiff's patent infringement claim,² there is no dispute that "corporate officers who actively aid and abet their corporation's infringement may be personally liable for inducing infringement under 35 U.S.C. § 271(b) regardless of whether the corporation is the alter ego of the corporate officer." Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1579 (Fed.Cir.1986).³ See also Fromson v. Citiplate, Inc., 886 F.2d 1300, 1304 (Fed.Cir.1989). Furthermore, "where the officer or director has...