AGSouth Genetics, LLC et al v. Cunningham et al
ORDER denying 98 Motion for Partial Summary Judgment; granting 106 Motion for Summary Judgment. This action will proceed to trial on all claims presented in the Complaint 1 ; Final Pretrial Conference set 6/21/11 at 10:00 am; Proposed final pretrial order due by 6/16/11. Signed by Magistrate Judge William E. Cassady on 5/13/2011. (srr)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
AGSOUTH GENETICS, LLC and
UNIVERSITY OF GEORGIA
RESEARCH FOUNDATION, INC.
and FLORIDA AGRICULTURAL
EXPERIMENT STATION n/k/a
SEED PRODUCERS, INC.
LESLIE H. CUNNINGHAM,
individually and d/b/a
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the parties’ motions for summary
Defendant Leslie Cunningham’s Motion for Partial Summary
Judgment, proposed order of judgment, evidentiary submission,
narrative statement of undisputed material facts and brief in
support, and suggested determinations of undisputed facts and
conclusions of law (Docs. 98, 99, 100, 101, and 102), all filed
December 17, 2010; plaintiffs’ response to Mr. Cunningham’s motion
(Doc. 111), filed January 24, 2011; and Mr. Cunningham’s reply in
support of his motion (Doc. 114), filed February 7, 2011; and
Plaintiffs’ Motion for Summary Judgment as to Defendant’s
Counterclaims and Amended Counterclaims and brief and
evidentiary submission in support (Docs. 106, 107, and 108), all filed
December 24, 2010; Mr. Cunningham’s response to plaintiffs’ motion
(Doc. 112), filed January 24, 2011; and plaintiffs’ reply to Mr.
Cunningham’s response (Doc. 113), filed February 7, 2011. 1
Upon consideration of the foregoing pleadings and all other relevant
pleadings in the file, and for the reasons that follow, the Court DENIES Mr.
Cunningham’s motion for partial summary judgment (Doc. 98) in its entirety and
GRANTS plaintiffs’ motion for summary judgment as to Mr. Cunningham’s
counterclaims (Doc. 106) in its entirety. 2
The motions for summary judgment are before the Court for disposition,
pursuant to 28 U.S.C. § 636(c), on the implicit consent of the parties. Compare Roell v.
Withrow, 538 U.S. 580, 590 (2003) (“We think the better rule is to accept implied consent
where, as here, the litigant or counsel was made aware of the need for consent and the
right to refuse it, and still voluntarily appeared to try the case before the Magistrate
Judge. Inferring consent in these circumstances thus checks the risk of gamesmanship
by depriving parties of the luxury of waiting for the outcome before denying the
magistrate judge’s authority. Judicial efficiency is served; the Article III right is
substantially honored.”) with Doc. 2 at 1 (“This civil action has been randomly assigned
to United States Magistrate Judge William E. Cassady for all purposes including trial.
In accordance with 28 U.S.C. § 636(c), the Magistrate Judges of this District Court have
been designated to conduct any and all proceedings in a civil case, including a jury or
non-jury trial, and to order the entry of a final judgment, upon the consent of all parties.
. . . You have the right to have your case reassigned to a United States District Judge for
trial and disposition. If you wish to have the case reassigned, you or your attorney
need only return the Request for Reassignment to a United States District Judge . . . .”)
and Doc. 28 at ¶ 8 (“This consent action shall be pretried by Magistrate Judge William E.
Cassady . . . .”); see also Chambless v. Louisiana-Pacific Corp., 481 F.3d 1345, 1350-51 (11th
Cir. 2007) (“Eight months of continual participation in pretrial proceedings justifies the
inference of consent from a litigant aware of the need to consent.”).
Any appeal taken from this memorandum opinion and order and judgment
must be made to the Eleventh Circuit Court of Appeals. (See Doc. 2 at 1 (“An appeal
from a judgment entered by a Magistrate Judge may be taken directly to the United
States Court of Appeals for the Eleventh Circuit in the same manner as an appeal from
any other judgment of a district court.”).)
On November 13, 2009, plaintiffs filed their Complaint (Doc. 1), in which
they seek (1) damages for infringement of the Plant Variety Protection Act, 7
U.S.C. § 2321 et seq. (the “PVPA”), pursuant to § 2541(a) (Count I); (2) an
injunction pursuant to § 2563 (Count II); damages for violation of the Lanham
Act, 15 U.S.C. § 1051 et seq., (Count III); and treble damages and attorneys’ fees
(Count IV), against defendants Leslie H. Cunningham and Katherine B.
Cunningham,3 each individually and doing business as Cunningham Farms. Mr.
Cunningham filed an answer and counterclaim on December 10, 2009 (Doc. 15),
in which he asserted a general denial, affirmative defenses, and a counterclaim
titled “Complaint for Abuse of Process.” 4
Plaintiffs filed their defenses and
On December 11, 2009, Mrs. Cunningham filed an answer (Doc. 17), in which
she asserted cross-claims against Mr. Cunningham and noted, first, that although she
and Mr. Cunningham were then husband and wife, they were estranged and involved
in a divorce proceeding pending under Alabama law, and, second, “[i]f any of the
actions or omissions of which [p]laintiffs complain occurred with respect to the use of
the AGS 2000 and/or AGS 2485 varieties of wheat, same actions or omissions would
have been committed by Leslie Cunningham and not [her].” (Id. at 18.) On August 17,
2011, in response to plaintiffs’ motion for voluntary dismissal with prejudice of their
claims against Mrs. Cunningham (Doc. 63), Mrs. Cunningham’s motion for voluntary
dismissal of her cross-claims against Mr. Cunningham (Doc. 64), and Mr.
Cunningham’s responses to the motions (Doc. 67), the Court, pursuant to Rule 41(a)(2),
dismissed with prejudice all claims asserted by plaintiffs against Mrs. Cunningham and
all cross-claims asserted by Mrs. Cunningham against Mr. Cunningham. (See Doc. 70.)
On that same day, Mr. Cunningham also filed a “First Amended CounterClaim,” adding an additional paragraph (Paragraph 19) to his counterclaim (Doc. 16),
and, the next day, filed an amended answer, adding an additional affirmative defense
answers to Mr. Cunningham’s counterclaim, as amended, on December 21, 2009
SUMMARY JUDGMENT STANDARD
It is well-established that summary judgment is proper—consistent with
Federal Rule of Civil Procedure 56(c)—“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 a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317,
The party asking for summary judgment “always bears the initial
responsibility of informing the district court of the basis for its
motion, and identifying those portions of the ‘pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any,’ which it believes demonstrate
the absence of a genuine issue of material fact.” [Celotex, 477 U.S.] at
323. The movant can meet this burden by presenting evidence
showing there is no dispute of material fact, or by showing, or
pointing out to, the district court that the nonmoving party has
failed to present evidence in support of some element of its case on
which it bears the ultimate burden of proof. Id. at 322-324.
Once the moving party has met its burden, Rule 56(e) “requires the
nonmoving party to go beyond the pleadings and by [its] own
affidavits, or by the ‘depositions, answers to interrogatories, and
admissions on file,’ designate ‘specific facts showing that there is a
genuine issue for trial.’” Id. at 324. To avoid summary judgment,
the nonmoving party “must do more than show that there is some
metaphysical doubt as to the material facts.” Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed.
2d 538 (1986). On the other hand, the evidence of the nonmovant
must be believed and all justifiable inferences must be drawn in its
favor. See Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S. Ct. 2505,
91 L. Ed. 2d 202 (1986). After the nonmoving party has responded to
the motion for summary judgment, the court must grant summary
judgment if there is no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c).
Archie v. Home-Towne Suites, LLC, 749 F. Supp. 2d 1308, 1312 (M.D. Ala. 2010).
Before turning to the pending motions, it is helpful to understand the
purpose and structure of the PVPA, the statute at the heart of this dispute. The
objective of the PVPA is to provide
patent protection to breeders of certain plant varieties, who may
acquire “the right . . . to exclude others from selling the variety, or
offering it for sale, or reproducing it, or importing it, or exporting it,
or using it in producing . . . a hybrid or different variety therefrom”
for a period of twenty years.
Syngenta Seeds, Inc. v. Delta Cotton Co-op., Inc., 457 F.3d 1269, 1274 (Fed. Cir. 2006)
(quoting 7 U.S.C. §§ 2483(a)(1) & (b)); see also Asgrow Seed Co. v. Winterboer, 513
U.S. 179, 181 (1985) (the PVPA “protects owners of novel seed varieties against
unauthorized sales of their seed for replanting purposes”); id. (Congress passed
the Act “in order to provide developers of novel plant varieties with ‘adequate
encouragement for research, and for marketing when appropriate, to yield for
the public the benefits of new varieties’”) (quoting 7 U.S.C. § 2581). To further
this goal, the PVPA provides a cause of action for infringement against any
person who undertakes to, inter alia, (1) “sell or market the protected variety”; (2)
import or export it; (3) multiply or propagate it “for growing purposes”; (4) use it
to produce “a hybrid or different variety”; (5) use its—specifically marked—seed
“or progeny thereof to propagate the variety”; (6) dispense it “to another, in a
form which can be propagated, without notice as to being a protected variety
under which it was received”; (7) condition it “for the purpose of propagation,”
except as to certain activities permitted under the Act; or (8) stock it for an
impermissible purpose under the Act. 7 U.S.C. § 2541(a).
“As can be seen from the above language, the PVPA gives the holder of a
PVP Certificate rather broad exclusive rights,” which (prior to 1994) were subject
to “one express, broad exemption”—the allowance of “certain ‘farmer-to-farmer’
sales of excess saved seed” pursuant to § 2543. Delta & Pine Land Co. v. Sinkers
Corp., 177 F.3d 1343, 1347 (Fed. Cir. 1999). This exemption was eliminated in a
1994 amendment to the PVPA, which made the Act “consistent with the
International Convention for the Protection of New Varieties of Plants of March
19, 1991[, the UPOV Convention], to which the United States is a signatory.”
H.R. REP. NO. 103-699, at 1 (1994), reprinted in 1994 U.S.C.C.A.N. 2423, 2423. 5
As explained in the testimony of Kenneth C. Clayton, then-Acting Deputy
Assistant Secretary for Marketing and Inspection Services, USDA, before the House
Agriculture Committee’s Subcommittee on Department Operations and Nutrition:
The American tradition of encouraging farming by private individuals
goes back to the founding of our nation. Under H.R. 2927 a provision is
included which would continue to safeguard the privilege of farmers to
a. Parties’ contentions
Mr. Cunningham requests summary judgment only as to certain
paragraphs—51, 53.a, 53.b, and 53.d (only as to the allegations concerning the
purported sale of wheat seed in that paragraph) 6 —in Count I of the Complaint
save seed of a protected variety for planting on their own holdings. The
sale of seed by farmers to others would be prohibited under H.R. 2927.
However, the privilege of farmers to sell saved seed protected under
present law would not be diminished. Rather, sale of saved seed would
be subject to authorization by the breeder only for varieties receiving
protection after the date of enactment of H.R. 2927. This change in the
farmer’s exemption is necessary to comply with the 1991 Convention.
I want to make it clear that this Administration wants to continue helping
farmers. However, beyond the original purchase price of the seed, no
payment is now made to the companies that developed the varieties by
those selling saved seed. While this practice has been possible under the
current PVPA, it is not compatible with the 1991 Act of the UPOV
Prohibiting sales of saved seed for replanting is not, however, simply a
matter of protecting seed companies. Without encouragement for
investment in the development of new varieties, the whole farming
community will gradually be put at a disadvantage. Fewer plant varieties
with improved characteristics will be developed, leaving farmers to plant
outmoded varieties which give lower yields and which succumb to new
strains of pests and diseases.
Farmers in other countries where
investment in new varieties has continued will enjoy a clear competitive
H.R. REP. NO. 103-699, at 20, 1994 U.S.C.C.A.N., at 2435 (emphasis added).
Those paragraphs provide:
(Doc. 1 at 16-18), which seeks damages for infringement of the PVPA, pursuant
to § 2541(a). As Mr. Cunningham explains, “the purpose of [his] motion is very
simple. [He] believes that, even accepting everything the plaintiffs allege in their
Complaint as true, that he is entitled to partial summary judgment as to the
purported transaction involving [Zelotis] Wofford,” an investigator employed by
Mr. Nolan, counsel for plaintiffs (Doc. 101 at 2), asserting that that transaction
Without authorization from AGSouth, Defendants sold and offered for
sale the protected AGS 2000 and/or AGS 2485 varieties which they had
diverted from normal grain channels for sale as seed for reproductive
purposes or which they had induced or instigated others to divert from
normal grain channels.
(Doc. 1 at ¶ 51.)
Defendants’ profits from the unauthorized sale of the AGS 2000 and/or
AGS 2485 varieties or a reasonable royalty, whichever is greater.
(Doc. 1 at ¶ 53.a.)
Plaintiffs’ lost profits as a result of sales diverted from their authorized
(Doc. 1 at ¶ 53.b.)
Expenses incurred or reasonably expected to be incurred as a direct result
of AGSouth’s, UGARF’s and FFSP’s actions to recover seed or grain
grown from Defendants’ unauthorized purchase, sale of seed, and/or
expenses incurred in identifying and notifying persons who purchased the
AGS 2000 and/or AGS 2485 varieties of seed from the Defendants that
such seed was not produced by or in accord with the standards of
AGSouth and that any grain grown from such seed is protected by the
PVPA, cannot be grown for any purpose other than as commercial crop,
and cannot be held out as AGS 2000 and/or AGS 2485.
(Doc. 1 at ¶ 53.d.)
“did not constitute an ‘infringement’ of the plaintiffs’ rights under the [PVPA]”
(id. at 6.), because
Mr. Wofford never intended to replant the wheat seed he
purportedly purchased from Cunningham. He was not a farmer or
engaged in farming activities at that time. Rather, at the time of the
transaction, Mr. Wofford was a private investigator tasked with
attempting to entice farmers into selling him protected wheat seed.
Indeed, Mr. Wofford apparently destroyed a large majority of wheat
seed he purportedly purchased from Cunningham. Therefore, the
Wofford/Nolan transaction did not represent a sale of protected
wheat for propagation (or replanting).
(Id. at 7; see also Doc. 114 at 2 (in which Mr. Cunningham asserts that the “one
alleged sale to Wofford does not constitute a violation of the PVPA” because “the
PVPA prohibits the actions delineated in 7 U.S.C. § 2541(a)(1)-(10) [ ] only if those
actions are done for ‘replanting purposes.’”) (quoting Asgrow, 513 U.S. at 181).)
In response, plaintiffs contend that Mr. Cunningham “began his
infringement when he offered to sell, conditioned, stored and agreed to sell the
subject wheat to Mr. Wofford when Mr. Wofford made it clear he intended to
reproduce the seed provided” and “continued when the sale was completed”
(Doc. 111 at 7), citing the transcripts of purported conversations between Mr.
Cunningham and Mr. Wofford.
In a purported November 14, 2008 telephone conversation between Mr.
Wofford and Mr. Cunningham, Mr. Wofford asked Mr. Cunningham whether
the wheat will “come up”—which, plaintiffs insist, gave Mr. Cunningham notice
that Mr. Wofford’s intent was to plant the protected seed—to which Mr.
Cunningham replied, “It’ll come up.” (Doc. 111-1, lines 24-26.) Plaintiffs further
insist that a purported November 17, 2008 in-person conversation between Mr.
Cunningham and Mr. Wofford indicates that Mr. Cunningham knew he was
selling the protected seed for replanting by Mr. Wofford. (See Doc. 111-2, lines
189-200. 7 )
Plaintiffs, moreover, disagree with Mr. Cunningham’s view as to the scope
of protection under the PVPA. (See id. at 8-9.) Where Mr. Cunningham asserts
that the PVPA’s “intent, with regard to the sale of protected seed, is to prevent
someone from purchasing the seed, planting the seed, harvesting the seed, and
then selling the seed to a third party for planting purposes thus providing the
‘owner’ a royalty the ‘owner’ would have realized had the ‘owner’ sold his, her
or its protected variety directly to the third party buyer” (Doc. 101 at 7-8),
plaintiffs insist that the PVPA “is not designed to simply protect the royalty lost
Mr. Cunningham: “[Y]ou’re not allowed to sell this brand of wheat for
somebody to plant and I’m selling you feed wheat, and you can do whatever you want
Mr. Wofford: “Why is that? What’s the deal on that?”
Mr. Cunningham: “I guess they’ve got a patent on it or something.”
Mr. Wofford: “I can plant this and harvest it, right?”
Mr. Cunningham: “Oh yeah.”
on a single sale, but the loss of future sales as well.” (Doc. 111 at 9.)
b. Consideration of unauthenticated transcripts
The Court initially must determine whether, for purposes of ruling on Mr.
Cunningham’s motion, it can consider Exhibits A (Doc. 111-1) and B (Doc. 111-2)
to plaintiff’s response—unauthenticated transcripts of the alleged November 14,
2008, telephone conversation between, and the alleged November 17, 2008, inperson meeting involving, Mr. Wofford and Mr. Cunningham.
Cunningham contends that the transcripts “constitute inadmissible hearsay”
(Doc. 114 at 1), and cites Corwin v. Walt Disney Co., 475 F.3d 1239 (11th Cir. 2007),
for the unassailable proposition that “inadmissible evidence cannot be used to
avoid summary judgment,” id. at 1249, at summary judgment, “the district court
may consider a hearsay statement if the statement could be reduced to
admissible form at trial.” Hill v. Manning, 236 F. Supp. 2d 1292, 1297 (M.D. Ala.
2002) (citing Macuba v. Deboer, 193 F.3d 1316, 1322 (11th Cir. 1999)); see also id.
(“Stated differently, otherwise admissible evidence may be submitted in
inadmissible form at the summary judgment stage.”) (citing McMillian v. Johnson,
88 F.3d 1573, 1584 (11th Cir. 1996)); see also Hosea v. Langley, No. Civ.A. 04-0605WS-C, 2006 WL 314454, at *8 (S.D. Ala. Feb. 8, 2006) (“[T]he law is clear that
‘inadmissible hearsay may sometimes be considered by a court when ruling on a
summary judgment motion,’ provided that such hearsay is reducible to
admissible form at trial.”) (quoting Pritchard v. Southern Co. Svcs., 92 F.3d 1130,
1135 (11th Cir. 1996)). Because the transcripts may be authenticated by Mr.
Wofford at trial, and are otherwise admissible as statements of a party opponent
(Mr. Cunningham), the Court may consider them at this time. As the court in
Gruppo v. Fedex Freight Systems, Inc., Civil Action No. 05-cv-02370-MSK-MEH,
2007 WL 1964080 (D. Colo. June 29, 2007)—considering the defendants’ objection
to the court’s consideration of a transcript on the grounds that the plaintiff failed
to establish the authenticity of the transcription—explained:
A party opposing summary judgment is not required to come
forward with evidence in a form that would be admissible at trial, so
long as the content or the substance of the evidence presented is
admissible. [Because t]he transcript purports to be a record of a
recorded conversation [involving at least one of the parties], the
[parties’] statements would likely be admissible under Fed. R. Evid.
801(d)(2). The fact that this evidence is currently in a form that
would likely not be admissible at trial does not prevent the Court
from considering it at this stage of the proceedings.
Id. at *5 & n.4 (citation omitted); cf. Fitzpatrick v. City of Montgomery, Civil Action
No. 2:07cv528-WHA, 2008 WL 3305125, at *4 (M.D. Ala. Aug. 7, 2008) (“Taperecorded conversations during an investigation of employment discrimination
can be admissible. The conversation must be authenticated and if the statements
are made by parties, the statements can be admissions and not hearsay.
authentication is accomplished by [the person who made the recording], and the
statements [ ] constitute admissions, the tape may be admissible.”) (citation
omitted); Progressive Cas. Ins. Co. v. Chalfant, Cause No. 109-CV-56, 2010 WL
339090, at *2 (N.D. Ind. Jan. 22, 2010) (“The statements in the transcript are
admissible evidence because they are a statement of a party opponent (Chalfant)
and thus, by definition, they are not hearsay.”) (citing FED. R. EVID. 801(d)(2)(A));
see also United States v. Hubbard, 22 F.3d 1410, 1416-17 (7th Cir. 1994) (taped
statement of defendant admissible as a statement of a party opponent).
Mr. Cunningham’s motion for partial summary judgment in essence seeks
a ruling from this Court that the sole transaction at issue in this case cannot be
the basis for a finding of infringement because that “transaction did not represent
a sale of protected wheat for propagation (or replanting).” (Doc. 101 at 7.) Such
a ruling—as Mr. Cunningham acknowledges (Doc. 101 at 2)—does not turn on
material facts in dispute, but on statutory interpretation and legislative intent.
See, e.g., Cal. Dep’t of Toxic Substances Control v. Alco Pac., Inc., 317 F. Supp. 2d
1188, 1191 (C.D. Cal. 2004) (“When there are no facts in dispute and the only
issue raised is a question of statutory interpretation, for example the legislative
intent behind a given law, it is appropriate to decide the issue by summary
judgment.”) (citing Edwards v. Aguillard, 482 U.S. 578, 594 (1987)).
As indicated above, the foundation for this requirement—that to violate
the PVPA, the purchaser of the protected seed must replant it or have the
intention of doing so, which is a requirement that does not explicitly appear in
the infringement provision of the act, § 2541(a)—appears to be language from the
United States Supreme Court’s 1995 Asgrow decision—the PVPA “protects
owners of novel seed varieties against unauthorized sales of their seed for
replanting purposes.” 513 U.S. at 181 (emphasis added). In Asgrow, the Supreme
Court examined the then-available exemption to the PVPA that “allow[ed]
farmers to make some sales of protected variety seed to other farmers,” id.—socalled “brown bag sales” under the “saved seed exemption.” Prior to its 1994
amendment, see discussion supra, § 2543 included language providing that
without regard to the provisions of section 2541[(a)](3) of this title it
shall not infringe any right hereunder for a person, whose primary
farming occupation is the growing of crops for sale for other than
reproductive purposes, to sell such saved seed to other persons so
engaged, for reproductive purposes, provided such sale is in
compliance with such State laws governing the sale of seed as may
Id. (emphasis added).
The Court determined that “saved seed” in the provision meant “seed
saved for replanting . . . not merely crop that is stored for later market sale or use
as fooder.” Asgrow, 513 U.S. at 188-89 (emphasis in original). The Court further
noted—importantly, for purposes of this motion—that
[a]s a practical matter, since § 2541[(a)](1) prohibits all unauthorized
transfer of title to, or possession of, the protected variety, this means
that the only seed that can be sold under the proviso is seed that has
been saved by the farmer to replant his own acreage.
Id. at 191 (emphasis added and footnote omitted).
This Court is not prepared to grant Mr. Cunningham judgment as a matter
of law as to his theory—which he admits “may be novel and/or [ ] contrary to
existing authority” (Doc. 101 at 5 n.8)—that to infringe the PVPA, it must be
shown that the protected seed sold was intended to be replanted, see Cook v.
United States, 37 Fed. Cl. 435, 446-47 (1997) (Where a “[d]efendant’s motion for
summary judgment rests on a contrary interpretation of the law[, it] must be
denied.”), because, in the very opinion in which the Supreme Court noted that
the PVPA “protects owners of novel seed varieties against unauthorized sales of
their seed for replanting purposes,” Asgrow, 513 U.S. at 181, the Court also
observed that § 2541(a)(1) of the PVPA “prohibits all unauthorized transfer of
title to, or possession of, the protected variety.” Id. at 191 (emphasis added); cf.
Delta & Pine Land Co., 177 F.3d at 1347 (noting that the “PVPA gives the holder if
a PVP Certificate rather broad exclusive rights”) (emphasis added). Thus, the
most logical reading of the Supreme Court’s use of “for replanting purposes” at
the beginning of its opinion is not as a broad limitation on the protection the
PVPA affords, but as the Court setting the stage for its later discussion of the
then-applicable “broad exemption,” Delta & Pine Land Co., 177 F.3d at 1347, to the
infringement provision—“brown bag sales” under the “saved seed exemption,” §
2543—the extent of which turned on determining that “saved seed” in the
provision meant “seed saved for replanting” by that farmer. Asgrow, 513 U.S. at
188 (emphasis in original); see id. at 191 (noting that because § 2541(a)(1)
“prohibits all unauthorized transfer of title to, or possession of, the protected
variety, . . . the only seed that can be sold under [the then applicable “farmer-tofarmer” exemption was] seed that has been saved by the farmer to replant his
This reading of Asgrow not only honors a basic tenant of statutory
interpretation that “when interpreting a statute, it is necessary to give meaning to
all its words ‘so that no words shall be discarded as being meaningless,
redundant, or mere surplusage,’” United States v. Fuentes-Rivera, 323 F.3d 869, 872
(11th Cir. 2003) (quoting United States v. Canals-Jimenez, 943 F.2d 1284, 1287 (11th
Cir. 1991)), it comports with the fact that (1) the infringement provision of the Act
fails to mention “replanting” as a prerequisite to infringement and (2) the Court’s
independent review of the legislative history of the Act—specifically the 1994
amendment to the Act, which broadened the already “rather broad exclusive
rights” given to PVP Certificate holders by eliminating “farmer-to-farmer” sales
of excess saved seed 8 —provided no indication that an intent to “replant” was
The 1994 Amendment deleting the “farmer-to-farmer” or “brown bag sale”
exemption applies only to PVP Certificates issued after April 4, 1995, that were not
pending on or before that date. See Pub. L. No. 103-349, §§ 14(a), 15, 108 Stat. 3144, 3145
ever considered to be a prerequisite to infringement. Compare Asgrow, 513 U.S. at
191 (noting that because § 2541(a)(1) “prohibits all unauthorized transfer of title
to, or possession of, the protected variety”) (emphasis added) with In re Turner,
Nos. NC–07–1306–PaMkMc, 02–46268, 2008 WL 8462952, at *6 (B.A.P. 9th Cir.
Mar. 5, 2008) (interpreting § 541(a)(1) of the Bankruptcy Code—property of the
estate includes “all legal or equitable interests . . .”—and concluding that its
“expansive language is not ambiguous—all means all”) (second emphasis
If the Court, moreover, were to adopt Mr. Cunningham’s interpretation of
the PVPA, it would then consider the transcripts—which may be admissible
evidence at trial, see, e.g., Gruppo, 2007 WL 1964080, at *5 & n.4—and conclude
there is at least evidence (see Doc. 111-2, lines 189-200) that could be interpreted
by a jury to show that Mr. Cunningham knew he was selling the protected seed
for replanting by Mr. Wofford. See Baltazor v. Holmes, 162 F.3d 368, 373 (5th Cir.
1998) (“If reasonable persons could differ in their interpretation of the evidence,
the motion should be denied. Only when the facts and the reasonable inferences
(1994); see, e.g., Delta and Pine Land Co., 177 F.3d at 1347 n.3. The applicable certificates
in this case were issued on September 20, 2002 (PVP Certificate No. 200000141 for AGS
2000), see Doc. 1 at ¶ 16; Doc. 1-1, and September 16, 2003 (PVP Certificate No.
200300005 for AGS 2485), see Doc. 1 at ¶ 17; Doc. 1-5.
are such that a reasonable juror could not reach a contrary verdict may the
district court properly grant a motion for judgment as a matter of law.”) (citation
omitted); cf. Chatman v. Slagle, 107 F.3d 380, 381-82 (6th Cir. 1997) (affirming
district court’s decision not to grant defendants’ repeated requests for judgment
as a matter of law as to their “novel theory” regarding the inevitable discovery
doctrine exception to the exclusionary rule and its impact on plaintiff’s ability to
bring a § 1983 suit against the defendant state troopers, stating that although
“[t]he district court accepted this creative theory[,]” it “held that the question of
whether or not the officers would inevitably have discovered the cocaine was a
question of fact for the jury to decide”).
Plaintiffs’ Motion for Summary Judgment as to Defendant’s
a. Parties’ contentions
Mr. Cunningham filed an “Answer and Counter-Claim” (Doc. 15) on
December 10, 2009, asserting a “complaint for abuse of process.” (See id. at 4; see
also Doc. 108-1.) The concluding paragraph of Mr. Cunningham’s counterclaim
states that he “also claims punitive damages, attorney’s fees, other litigation
expenses and costs in this behalf expended, in that Plaintiffs consciously or
deliberately engaged in oppression, fraud, wantonness or malice.” 9 (Id. at ¶ 18
See also Doc. 15 at ¶ 3 (which defendant also relies on as proof that his
counterclaim states an implicit cause of action for misrepresentation: “The ostensible
On December 19, 2009, Mr. Cunningham filed a “First
Amended Counter-Claim” (Doc. 16), adding an “entrapment” allegation. (See id.
at ¶ 19.)
Plaintiffs move for summary judgment on both the counterclaim and
amended counterclaim (see generally Docs. 106, 107, 108), asserting that
“Defendants failed to comply with Fed. R. Civ. P. 12(b)(6), Fed. R. Civ. P. 9(b),
Fed. R. Civ. P. 9(c), Fed. R. Civ. P. 9(g).” (Doc. 106 at 11.) In response, Mr.
Cunningham concedes both his explicit counterclaims for abuse of process and
entrapment (Doc. 112 at 1-2), but states that “Plaintiffs, however, have not moved
and are not entitled to summary judgment as to Cunningham’s claim for fraud,”
(id. at 2), asserting, first, that his counterclaim and amended counterclaim
“alleged that Plaintiffs’ agent made misrepresentations to Cunningham and that
Cunningham relied on those misrepresentations” (id.), and second—moreover—
plaintiffs recognized that a fraud claim exists because their motion cites Rules
9(b), 9(c), and 9(g). (See id. (citing Doc. 106 at 11).) In reply, plaintiffs assert that
Mr. Cunningham’s response is merely an “attempt to breathe life into [his]
purchaser . . . was sent by Plaintiffs to set up a phony purchase to entrap Cunningham
into a technical violation of federal statutes . . . by strongly appealing to Cunningham’s
sense of mercy and compassion[,] and described a relative who was crippled or
wheelchair bound and who sat on his front porch and would like to watch green grass
grow, and therefore he needed some seed to plant so that his relative could view it in
counterclaims by asserting a fraud claim” (Doc. 113 at 2), and explain their
reference to Rule 9 by pointing to pages 7 and 8 of their brief in support of their
In the very least, the counterclaimants have not complied with
notice pleading requirements under either Fed. R. Civ. P. 12(b)(6) by
not setting forth notice of a claim under which relief can be granted.
Along the same lines, they have not stated any act with specificity as
required by Fed. R. Civ. P. 9(b), nor have they satisfied the
requirement that a “condition precedent” be clearly set forth as
required by Fed. R. Civ. P. 9(c).
(Doc. 113 at 2-3 (quoting Doc. 107 at 7-8).)
Because, first, Mr. Cunningham has conceded his explicit counterclaims
for abuse of process and entrapment (Doc. 112 at 1-2), and second, the Court
determines that Mr. Cunningham has not alleged a claim for fraud because his
counterclaim and amended counterclaim failed to place plaintiffs on notice as to
the existence of a cause of action for fraud, it finds that plaintiffs are entitled to
summary judgment as to all counterclaims asserted by Mr. Cunningham.
Mr. Cunningham cites Nolan Bros., Inc. v. United States for Use of Fox Bros.
Construction Co., 266 F.2d 143 (10th Cir. 1959), in support of his argument that the
use of “the word fraud or the word fraudulent” is “not indispensably necessary
to the pleading of a cause of action [for fraud].” (Doc. 112 at 2 (quoting 266 F.2d.
at 145).) He is correct. And as the court in Nolan Bros. further explained, “Rule
9(b) [ ] does not require a general express allegation of fraud in which the word
fraud is used categorically. Instead, it merely requires that the circumstances
constituting fraud shall be pleaded with particularity.”
266 F.2d. at 145-46
(citation omitted). Thus, to establish that a claim for fraud exists, this Court must
conduct an analysis of the statements alleged by Mr. Cunningham in his
counterclaim as amended to determine if the elements for such a cause of action
exist. See Minger v. Green, 239 F.3d 793, 800 (6th Cir. 2001).
A court “must look beyond labels to the facts alleged in the complaint.” Id.
And “[a]ll that is required is that the pleaded claim afford “the opposing party
fair notice of the nature and basis or grounds of the claim and a general
indication of the type of litigation involved.” Labram v. Havel, 43 F.3d 918, 920
(4th Cir. 1995) (quoting Burlington Indus,, Inc. v. Milliken & Co., 690 F.2d 380, 390
(4th Cir. 1982)) (emphasis added). For example, in Labram, the Fourth Circuit
vacated and remanded a district court’s decision dismissing a case for failure to
state a claim on which relief could be granted. See id. In that case, the applicable
state law—Nevada’s—did not recognize a separate tort for plaintiff’s labeled
count, “sexual molestation,” but she pled all of the elements of a battery claim.
See id. The Fourth Circuit, accordingly, held that dismissing the case based on
plaintiff’s failure to properly label the sexual molestation claim as one for battery
was “not warranted so long as any needed correction of legal theory will not
prejudice the opposing party.” Id. (emphasis added); see also Abercrombie & Fitch
Stores, Inc. v. Am. Eagle Outfitters, Inc., 280 F.3d 619, 632 n.8 (6th Cir. 2002) (if
construing a pleading liberally rather than technically “results in no prejudice to
the opposing party, discarding labels in an inartfully drafted complaint in favor
of the complaint’s reasonable meaning . . . comports with the Federal Rules’
intent and serves the ends of justice”) (citations omitted and emphasis added); cf.
Nova Design Build, Inc. v. Grace Hotels, LLC, No. 08 C 2855, 2009 WL 799490, at *3
(N.D. Ill. Mar. 25, 2009) (denying motion to dismiss a counterclaim plaintiffs
argued was “not clearly pled and lack[ed] factual details” because defendants
“provided sufficient facts to put Plaintiffs on notice of the legal basis for the
Counterclaim brought against Plaintiffs”).
Here, plaintiffs are prejudiced by Mr. Cunningham’s current counsel’s
effort to resurrect his previous counsel’s flawed attempt to assert cognizable
counterclaims. 10 Put simply, Mr. Cunningham’s new “belief [he was] not
required to plead legal theories is belied by the fact [he] advanced [a] specific
legal theor[y]” in his counterclaim—for abuse of process. Black v. Rhone-Poulenc,
Inc., 172 F.R.D. 188, 192 n.9 (S.D. W. Va. 1997); compare id. (refusing to recognize
See Doc. 112 at 1-2 (“Cunningham now concedes, as he must, that there is
insufficient evidence to support a claim for abuse of process. Moreover, to the extent
that Cunningham’s previous counsel attempted to assert a claim for ‘entrapment,’
Cunningham also concedes that there is no such cause of action.”).
that an implied nuisance claim existed in light of the fact that the complaint was
very specific as to other causes of action—“Complaint at ‘Count One’ (alleging
strict liability and citing Restatement (Second) of Torts § 519); id. ‘Count Two’
(negligence); id. ‘Count Four’ (medical monitoring”) with Doc. 15 at 4 (Mr.
Cunningham’s counterclaim is prominently labeled as a “Complaint for Abuse of
Process”). As the court in Black concluded, it is “dissembling for [parties] to have
asserted some very explicit claims but, for reasons sufficient to themselves, failed
to plead others which they now find urgently necessary.” 172 F.R.D. at 192 n.9.
The Court also finds support for its position in Kennedy v. Venrock
Associates, 348 F.3d 584, 594 (7th Cir. 2003), in which the Seventh Circuit—stating
that their “conclusion is supported by Nolan Bros., Inc. v. United States for Use of
Fox Bros. Construction Co., 266 F.2d 143, 145-46 (10th Cir. 1959),” relied on by Mr.
Cunningham—held that “[a] principal purpose of requiring that fraud be
pleaded with particularity is, by establishing this rather slight obstacle to loose
charges of fraud, to protect individuals and businesses from privileged libel
(privileged because it is contained in a pleading),” and “[t]hat purpose is
thwarted by the filing of a stealth complaint in which allegations of fraud are
avoided only to be added later by way of brief or other filing. Such an end run
should not be permitted.” Id. at 594 (citations omitted and emphasis added).
Plaintiffs are entitled to judgment as a matter of law on all counterclaims
asserted by Mr. Cunningham, and their motion (Doc. 106) is due to be
GRANTED. In light of this and the Court’s denial of Mr. Cunningham’s motion
for partial summary judgment (Doc. 98), this action will proceed to trial on all
claims presented in the Complaint (Doc. 1). The Final Pretrial Conference in this
matter is set for Tuesday, June 21, 2011, at 10:00 am in Mobile, Alabama.
Counsel are reminded that they shall prepare a single proposed Pretrial Order in
the form attached to the undersigned’s Standing Order Governing Final Pretrial
Conference (Doc. 43-1) and file it no later than Thursday, June 16, 2011.
DONE and ORDERED this the 13th day of May, 2011.
s/WILLIAM E. CASSADY
UNITED STATES MAGISTRATE JUDGE
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