Soilworks LLC v Midwest Industrial Supply Inc

Filing 26

MOTION to Strike re Counterclaims Asserted by Soilworks, LLC by Midwest Industrial Supply Inc. (Attachments: # 1 Memorandum in Support# 2 Proposed Order)(Skeriotis, John)

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1 2 3 4 5 6 7 8 9 10 11 Brouse McDowell 388 South Main Street, Suite 500 Akron, Ohio 44311-4407 (330) 535-5711 BROUSE MCDOWELL JOHN M. SKERIOTIS, 0069263 (OH) JILL A. GRINHAM, 0075560 (OH) 388 S. Main Street, Suite 500 Akron, Ohio 44311-4407 Telephone: 330-535-5711 Facsimile: 330-253-8061 Email: jskeriotis@brouse.com Email: jgrinham@brouse.com BRYAN CAVE LLP, 00145700 LAWRENCE G. SCARBOROUGH, 006965 GEORGE C. CHEN, 019704 2 N Central Ave, Suite 2200 Phoenix, AZ 85004-4406 Telephone: 602-364-7000 Facsimile: 602-364-7070 Email: Lgscarborough@bryancave.com Email: george.chen@bryancave.com Attorneys for Defendant Midwest Industrial Supply, Inc. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA SOILWORKS, LLC, an Arizona corporation, Plaintiff / Counterdefendant v. MIDWEST INDUSTRIAL SUPPLY, INC., an Ohio corporation authorized to do business in Arizona, Defendant / Counterclaimant. No. 2:06-CV-02141-DGC MIDWEST INDUSTRIAL SUPPLY, INC.'S MEMORANDUM IN SUPPORT OF ITS MOTION TO STRIKE THE COUNTERCLAIM OF SOILWORKS, LLC 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant/Counterclaimant Midwest Industrial Supply, Inc. ("Midwest") submits this Memorandum of Points and Authorities in support of its Motion to Strike the Counterclaim of Soilworks, LLC ("Soilworks"). 1 2 3 4 5 6 7 8 9 10 Bryan Cave LLP Two North Central Avenue, Suite 2200 Phoenix, Arizona 85004-4406 (602) 364-7000 INTRODUCTION The counterclaim asserted by Soilworks in its Reply to Midwest's Counterclaims must be stricken by the Court for two principal reasons. First, the Federal Rules of Civil Procedure do not permit a plaintiff to assert a counterclaim in its reply to a defendant's counterclaim. Second, Soilworks' allegations in the counterclaim related to Midwest's U.S. Patent No. 7,081,270 ("Midwest's `270 Patent") are entirely duplicative and redundant of the claims already asserted by Soilworks in Count II of its Complaint. THE PARTIES' PLEADINGS Soilworks filed its Complaint on September 7, 2006. (Complaint for Damages and Equitable Relief and Demand for Jury Trial, ECF Docket No. 1.) In the Complaint, Soilworks asserted five counts against Midwest: (1) false representation under section 43(a) of the Lanham Act; (2) declaratory judgment under 28 U.S.C. 2201 seeking a declaration that Soilworks does not infringe on Midwest's U.S. Patent No. 7,081,270 ("Midwest's `270 Patent") and/or Midwest's `270 Patent is invalid; (3) misappropriation of goodwill; (4) tortious interference with business relationship and expectancy; and (5) violation of Arizona common law and unfair competition. Midwest filed its Answer and Counterclaims on March 26, 2007. (Midwest Industrial Supply, Inc.'s Answer and Counterclaims, ECF Docket No. 16.) In its 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Counterclaims, Midwest asserted five counts against Soilworks: (1) trademark infringement, false designation and unfair competition under section 43(a) of the Lanham Act; (2) false advertising under section 43(a) of the Lanham Act; (3) declaratory judgment under 28 U.S.C. 2201 for a declaration of the validity of Midwest's `270 Patent and 1 2 3 4 5 6 7 8 9 10 Bryan Cave LLP Two North Central Avenue, Suite 2200 Phoenix, Arizona 85004-4406 (602) 364-7000 infringement of the patent by Soilworks; (4) violation of Arizona common law and unfair competition; and (5) unjust enrichment. Soilworks filed its Reply to Midwest's Counterclaims on April 16, 2007 (Reply to Midwest Industrial Supply, Inc.'s Counterclaims, ECF Docket No. 22). In the Reply, Soilworks asserts a "counterclaim" against Midwest for declaratory judgment under 28 U.S.C. 2201, which requests a declaration from the Court that Midwest's `270 Patent and U.S. Patent No. 7,046,266 ("Midwest's `266 Patent") are invalid and are not infringed by Soilworks. LAW AND ANALYSIS 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Federal Rule of Civil Procedure 7 governs the pleadings that are permitted to be filed in a civil action: There shall be a complaint and an answer; a reply to a counterclaim denominated as such; an answer to a cross-claim, if the answer contains a cross-claim; a third-party complaint, . . . and a third-party answer, if a thirdparty complaint is served. No other pleadings shall be allowed. Fed. R. Civ. P. 7(a) (emphasis added). The purported "counterclaim" asserted by Soilworks in its reply to Midwest's counterclaims is improper for two reasons. First, a "counterclaim to a counterclaim" is not authorized under Rule 7. Second, Soilworks' allegations in the counterclaim related to Midwest's `270 Patent are duplicative and redundant of the claims asserted, and the relief sought, by Soilworks in Count II of the Complaint. Accordingly, Soilworks' counterclaim must be stricken by the Court pursuant to Rule 12(f). See Rule 12(f) (allowing the court to strike from "any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter"); Fantasy, Inc. v. Fogerty, 984 3 1 2 3 4 5 6 7 8 9 10 Bryan Cave LLP Two North Central Avenue, Suite 2200 Phoenix, Arizona 85004-4406 (602) 364-7000 F.2d 1524 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517 (1994) (Rule 12(f) may be used to order the striking of allegations in counterclaims). In addition to being disallowed by Rule 7, Soilworks' counterclaim will engender both confusion and further pleadings by the parties outside of the scope of Rule 7(a). For example, the allegations asserted by Soilworks related to the `266 Patent (e.g., invalidity and non-infringement) will necessarily require Midwest to include a counterclaim against Soilworks in Midwest's "reply to Soilworks' reply" that requests a declaration from the Court that Midwest's `266 Patent is valid and is infringed by Soilworks. This result is clearly disfavored under the Federal Rules of Civil Procedure. Soilworks' proper course of action for seeking to assert an additional claim in this action regarding Midwest's Patent `266 is to move the Court for leave to amend its Complaint pursuant to Rule 15(a). See Rule 15(a) (providing that a party may amend the pleadings after the time for amending as a matter of course "only by leave of the court or by written consent of the adverse party; and leave shall be freely granted when justice so requires"). Midwest will not oppose such a motion if properly filed by Soilworks. The Court, however, must strike the improper counterclaim asserted by Soilworks in its Reply to Midwest's Counterclaims. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 1 2 3 4 5 6 7 8 9 10 Bryan Cave LLP Two North Central Avenue, Suite 2200 Phoenix, Arizona 85004-4406 (602) 364-7000 CONCLUSION For the foregoing reasons, Midwest respectfully requests that the Court strike the counterclaim contained in Soilworks' Reply to Midwest Industrial Supply, Inc.'s Counterclaims (Reply to Midwest Industrial Supply, Inc.'s Counterclaims, ECF Docket No. 22). DATED this 3rd day of May, 2007. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 678601.2 By /s/ John M. Skeriotis BROUSE MCDOWELL JOHN M. SKERIOTIS, 0069263 (OH) JILL A. GRINHAM, 0075560 (OH) 388 S. Main Street, Suite 500 Akron, Ohio 44311-4407 Telephone: 330-535-5711 Facsimile: 330-253-8061 Email: jskeriotis@brouse.com Email: jgrinham@brouse.com BRYAN CAVE LLP, 00145700 LAWRENCE G. SCARBOROUGH, 006965 GEORGE C. CHEN, 019704 2 N Central Ave, Suite 2200 Phoenix, AZ 85004-4406 Telephone: 602-364-7000 Facsimile: 602-364-7070 Email: Lgscarborough@bryancave.com Email: george.chen@bryancave.com Attorneys for Defendant Midwest Industrial Supply, Inc. 1 2 3 4 5 6 7 8 9 10 Bryan Cave LLP Two North Central Avenue, Suite 2200 Phoenix, Arizona 85004-4406 (602) 364-7000 CERTIFICATE OF SERVICE I hereby certify that on May 3, 2007, the foregoing MIDWEST INDUSTRIAL SUPPLY, INC.'S MEMORANDUM IN SUPPORT OF ITS MOTION TO STRIKE THE COUNTERCLAIMS OF SOILWORKS, LLC was filed electronically. Notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system. /s/ John M. Skeriotis John M. Skeriotis 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

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