Arunachalam v. International Business Machines Corporation et al

Filing 164

MEMORANDUM. Signed by Judge Richard G. Andrews on 3/27/2019. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
DR. LAKSHMI ARUNACHALAM,
Plaintiff,
Civil Action No . 16-281-RGA

V.

INTERNATIONAL BUSINESS
MACHINES CORPORATION, et al. ,
Defendants.

MEMORANDUM
The Court of Appeals for the Federal Circuit recently affirmed the dismissal of all claims
in this case. Arunachalam v. IBM, No. 18-2105 (decided Jan. 28, 2019). More recently, the
Court of Appeals denied Plaintiffs petition for mandamus relief in this case. In re

Arunachalam, No. 19-112 (decided March 27, 2019).
I now have various pending motions before me. Three of them (D.I. 131 , 135, 136) are
for attorneys' fees and an injunction against Plaintiff filing "any further filings [against
JPMorgan] in the District of Delaware relating to the subject-matter of the above-captioned
action, including any new pleadings, absent leave of Court" (D.I. 135-1), and against Plaintiff
"directly or indirectly commencing litigation in the District of Delaware that in any way relates
to SAP [or IBM], its directors, officers, stockholders, custodians, employees, subsidiaries and/or
affiliates [etc.]" (D.I. 130-1; D.I. 136-1).
In terms of the pre-filing injunction, the Court of Appeals for the Third Circuit stated,
"This circuit has concluded that district courts may issue an injunction requiring a litigant who
has repeatedly filed complaints alleging claims that have already been fully litigated to receive
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court approval before filing further complaints." In re Packer Ave. Assocs., 884 F.2d 745 , 747
(3d Cir. 1989). Such injunctions "should be narrowly tailored and rarely issued." Id. at 748. I
do not think the SAP or IBM proposals are narrowly tailored, and I would deny them on that
basis alone. More significantly, though, Plaintiff's vexatiousness in Delaware is, for the most
part, not that she files complaints seeking to relitigate issues that she has already lost, but that she
files repetitive and vexatious motions and appeals on issues that she has already lost. The instant
case, for example, was filed nearly three years ago. At its core against IBM was an asserted
patent, which, at the time, was presumed valid. She has not filed another case in Delaware since,
and the last patent case she filed before that (in the corporate form of Pi-Net International) was
nearly five years ago . Further, I believe the imposition of monetary sanctions might be as
effective in discouraging improper behavior.
Thus, I am going to deny the pre-filing injunction part of the three motions.
IBM seeks attorneys ' fees for two motions and a response it filed, under the Court' s
inherent authority. (D.1. 131 at 1). SAP seeks attorneys ' fees for its briefing in relation to the
motion to dismiss the racketeering claims. (D.I. 138 at 2). SAP says such fees should be ordered
because Plaintiff violated court orders and has engaged in vexatious litigation. JPMorgan seeks
its fees in defending this action, relying upon the Court' s inherent authority. (D.1. 137 at 10-12).
Plaintiff filed one brief in response to these three motions and three other motions. (D .I.
145). It is not very helpful, as the main point it makes is that " [eJach and every one of the
Defendants [including Chief Judge Stark and me] committed multiple overt federal [criminal]
offenses." (Id. at 5, 6-13 , 16-17). Most of the rest of it is just a rehash of the arguments she has
made before in this case, all of which have been previously addressed by me or by the Court of
Appeals. Plaintiff's entire argument on the attorneys ' fees issue in her Answering Brief is,

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"Judge Andrews aided and abetted corporate infringers ' violations of RICO statutes; defending,
infringers in breach of public contract." (D .I. 145 at 17). In Plaintiffs Sur-reply Brief, she
references her "(patently obvious and clearly and convincingly evidenced) RICO, patent
infringement and other claims." (D.I. 153 at 6). She further states, "Continually repeating the
meme ' vexatious ' is not convincing and does not make it so. The epithet is used to hide their
lack of substantive responses to unequivocally substantive evidence previously provided that
proves the IBM Eclipse Foundation conspiracy and racketeering." (Id. at 8).
"It has long been understood that certain implied powers must necessarily result to our
Courts of justice from the nature of their institution, powers which cannot be dispensed with in a
Court, because they are necessary to the exercise of all others." Chambers v. NASCO, Inc. , 501
U.S. 32, 43 (1991) (internal quotation marks and brackets omitted). Therefore, courts are
"vested, by their very creation, with power to impose silence, respect, and decorum, in their
presence, and submission to their lawful mandates. " Id. The court's "power reaches both conduct
before the court and that beyond the court's confines" as the underlying purpose of the Court's
power is to stem "disobedience to the orders of the Judiciary, regardless of whether such
disobedience interfered with the conduct of trial." Id. at 44 (internal brackets and quotation
marks omitted). Furthermore, a court "may assess attorney's fees when a party has acted in bad
faith, vexatiously, wantonly, or for oppressive reasons ." Chambers, 501 U.S. at 45-46 (internal
quotation marks omitted).
The Third Circuit has held that:
Because of their very potency, inherent powers must be exercised with restraint
and discretion. A primary aspect of a district court's discretion is the ability to
fashion an appropriate sanction for conduct which abuses the judicial process.
Thus, a district court must ensure that there is an adequate factual predicate for
flexing its substantial muscle under its inherent powers, and must also ensure that
the sanction is tailored to address the harm identified. In exercising its discretion
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under its inherent powers, the court should be guided by the same considerations
that guide it in the imposition of sanctions under the Federal Rules. First, the court
must consider the conduct at issue and explain why the conduct warrants sanction.
If an attorney, rather than a client, is at fault, the sanction should ordinarily target
the culpable attorney.

Republic of Philippines v. Westinghouse Elec. Corp., 43 F.3d 65, 74 (3d Cir.1994).
Essentially, Defendants SAP and JPMorgan seek their fees in defending against a
baseless racketeering lawsuit. IBM seeks fees for one motion relating to the racketeering lawsuit
and for two other pleadings. I understand that under some circumstances, I could award fees
against a pro se plaintiff for filing legally insufficient pleadings. 1 I do not like sanctioning a pro

se litigant (and I believe I have only done so on rare occasion in seven years as a judge), but
Plaintiff is a good candidate for such consideration. She is a prodigious litigant who has filed,
according to the Northern District of California, 89 cases. Arunachalam v. Apple, No. 5: 18-cv1250-EJD, D.I. 214 at 2 n.l (N.D. Cal. Oct. 16, 2108). In a non-patent case, she filed eight
motions to recuse, to disqualify, or to reconsider motions to recuse or disqualify. Arunachalam

v. Pazuniak, No. 15-259, D.I. 166 (describing seven motions), D.I. 181 (eighth) (D.Del.). I note
the repetitive motions for recusal, with no valid basis, in this case. (D.I. 40, 62, 83 , 85, 97). She
is abusive, regularly accusing just about all the judges handling her cases of treason and
corruption, and that there is a vast conspiracy to invalidate her patents. When she had counsel,
the relationships ended badly. See WebXChange Inc. v. Dell Inc. , 2011 WL 6328211 , *3 (D.Del.
Dec. 15, 2011) ("[Arunachalam] is a difficult personality who has clashed with multiple well-

1

I see that Plaintiff subsequently sued IBM, SAP, and JPMorgan in Arunachalam v. Apple, No . 5: l 8-cv-1250-EJD
(N.D . Ca.), and that the case has been dismissed against all defendants . IBM says the case has "the same RICO
claims." (D.1 . 131 at 4 n. l). This appears to be true. Arunachalam v. Apple, No . 5:18-cv-1250-EJD, D.l . 214 at 6
n.2 (N.D . Cal. Oct. I 6, 2018) ("Plaintiffs RICO claims are identical to the RICO claims brought against IBM, SAP,
and JPMorgan Chase in the District of Delaware."). Bringing the same claim in a different district is certainly a sign
of vexatiousness. I note that Arunachalam has filed an appeal in that case.

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respected attorneys and law firms, .. . and is not good about following the directions of the
Court.").
As to JPMorgan and SAP, I stated in ruling on the original round of motions to dismiss,
"the only factual allegations in the twenty-seven pages of the amended complaint against SAP
and J.P . MorganChase concern why the Court has personal jurisdiction over them . . ., that they
' are using Plaintiffs patented Web applications on a Web browser[, which] is mission critical to
how [they] conduct their business and operations today on the Web,' . .. and that they have not
licensed the ' 506 patent." (D.I. 89 at 4). I permitted Plaintiff to file a motion for leave to file an
amended complaint, but when her motion did not comply with the Local Rules (which I had
warned her about) and did not cure the pleading deficiencies of the earlier complaint, I denied
her motion. (D.I. 103 at 2). I noted that the failure to comply with the Local Rule "can only be
considered to be willful and in bad faith. " (Id.).
As for IBM, perhaps I should grant its motion in full, but I am going to exercise my
discretion and only grant the portion of the motion relating to Arunachalam's pointless litigation
relating to the "two other pleadings." IBM identifies that after Plaintiffs patent was invalidated
by the PTAB, and the time for appeal had run, she still opposed IBM ' s motion to dismiss. (D.I.
131 at 4-5). Then, after I had dismissed Plaintiffs patent claim, she filed a baseless motion to
alter or amend a judgment. (D.I. 118; see D.I. 131 at 5). She did not have a leg to stand on, yet
still she made IBM file the pleadings to resolve the case. That is vexatious conduct.
In terms of IBM ' s request for fees relating to the motion to dismiss, my thinking is that
Arunachalam had a patent that she could assert against IBM, and some history with them that
made her racketeering suit against them a little more plausible if nevertheless still not even close

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to stating a colorable complaint. I think the monetary sanctions appear to be a reasonable
response to her conduct.
Thus, I will grant-in-part and deny-in part the motions for attorneys ' fees and prefiling
injunctions. (D.I. 130, 135, 136).
IBM and SAP have filed motions to seal and "for a protective order applying Local Rule
26.2 to Self-Represented Litigant. ' (D.I. 134). Essentially, as I understand it, they want me to
award them fees while at the same time prohibiting Plaintiff from disclosing anything about what
she learns about their fee structures. In the alternative, IBM seeks leave to submit a "revised
Sanctions Motion." I am not entirely sure what IBM wants to do in its "alternative" proposal,
but I frequently see decisions about attorneys ' fees that lay out in some detail the basis for the fee
award, and that might easily happen in this case. See, e. g. , Chalumeau Power Sys LLC v.

Alcatel-Lucent USA Inc ., 2014 WL 5814062 (D.Del. Nov. 6, 2014).
The party seeking to seal has to establish good cause. Good cause requires a showing
that "disclosure will work a clearly defined and serious injury to [that party]. The injury must be
shown with specificity." Id. at 507 (alteration in the original; citations and internal quotation
marks omitted). Or, in other words, the party seeking to seal judicial records must demonstrate
"a compelling interest" in shielding those materials from public view. Id. at 508. Among other
things, I have considered the various factors, to the extent relevant, set forth in Pansy v. Borough

of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994), Courts should consider:
(1) whether disclosure will violate any privacy interests; (2) whether the
information being sought is for a legitimate purpose; (3) whether disclosure will
cause embarrassment to a party; (4) whether the information to be disclosed is
important to public health and safety; (5) whether sharing the information among
litigants will promote fairness and efficiency; (6) whether the party benefitting
from the order is a public entity or official; and (7) whether the case involves
issues important to the public.

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Mosaid Techs. Inc v. LSI Corp., 878 F.Supp.2d 503 , 508 n.2 (D.Del. 2012) (citing Pansy).

While IBM and SAP say there would be irreparable harm, I do not think they have made
that case. Essentially, they mention hourly rates, hours worked, and privileged descriptions of
the work performed. I accept that privileged descriptions of the work performed should be
confidential, as they are otherwise protected by a privilege. But I did not see any declarations
about hourly rates and the number of hours worked, and I am not persuaded that within the legal
community hourly rates are that well concealed. In addition, from what I hear, there is a lot of
negotiation and deals in the way large law firms charge clients, and I am not convinced that there
will be irreparable harm to IBM or SAP should that information be released. Thus, I will mostly
deny IBM ' s and SAP's motions. (D.I. 134, 140). If IBM (or the other Defendants) want to
exercise some form oflBM' s alternative proposal, the party should file the appropriate papers
within three weeks.
JPMorgan' s motion proposes that I either review the billing materials in camera, which I
will not do, or that I seal them and enter a protective order. I will treat JPMorgan' s motion (D.I.
142) the same as IBM ' s and SAP's.
Entered this 'J/-day of March 2019.

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