FREEMAN v. MARCHIONNE

Filing 29

ORDER granting 23 Motion to Dismiss for Failure to State a Claim upon which relief can be granted. Freeman shall have through March 22, 2017, in which to show cause why judgment consistent with this Entry should not issue. Signed by Judge Tanya Walton Pratt on 2/23/2017 (dist made) (CBU)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
LEWIS GENE FREEMAN,
Plaintiff,
v.
FCA US LLC,
Defendant.

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Case No. 1:15-cv-01799-TWP-MJD

ENTRY ON MOTION TO DISMISS
Before the Court is a Motion to Dismiss filed by Defendant FCA US LLC (“FCA”),
pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff Lewis Gene Freeman, pro se,
(“Freeman”) filed a Complaint against FCA, alleging breach of contract and patent infringement.
(Filing No. 1.) FCA now seeks to dismiss Freeman’s Complaint for failure to state a claim. For
the reasons set forth below, the Court GRANTS FCA’s Motion to Dismiss. (Filing No. 23.)
I.

BACKGROUND

The following facts derived from Freeman’s Complaint and the exhibits attached thereto,
are not necessarily objectively true; but, as required when reviewing a motion to dismiss, the Court
accepts as true all factual allegations in the Complaint and draws all inferences in favor of
Freeman. See Bielanski v. County of Kane, 550 F.3d 632, 633 (7th Cir. 2008).
Freeman worked at Chrysler Corporation, Kokomo Die Casting Plant (“Chrysler”) for
thirty-two years as a salary tool and process engineer, before retiring in 1991. During that time
period, Freeman patented thirty-three inventions including, a die cast vacuum valve system, filters,
as well as vent and filter blocks to be used on Chrysler vehicles. On July 8, 1994, Freeman entered
into a licensing agreement with Chrysler, effective May 1, 1994, regarding the die cast vacuum

valve system, the filter, as well as Freeman’s vent and filter block patents (“the Agreement”).
(Filing No. 1-1 at 2-6.) Freeman and Chrysler amended the Agreement once, on July 17, 1995, to
include additional inventions, but they did not make any substantive changes regarding the duties
of the parties. Id. at 1.
Over the years, Chrysler went through various changes, including a bankruptcy, and in
2009, FCA acquired Chrysler’s assets and became the assignee of the Agreement. At some point
after FCA acquired Chrysler, Freeman learned that FCA hired outside vendors to produce a certain
vehicle component for FCA, known as a casting. On July 2, 2015, Freeman sent a letter to the
CEO of FCA, Sergio Marchionne, requesting royalty payments for each casting produced by
outside vendors that used Freeman’s patents. (Filing No. 1-6.) FCA refused to make royalty
payments and informed Freeman that it has been, and continues to be, in compliance with the terms
of the Agreement. (Filing No. 1-7.)
On November 16, 2015, Freeman filed a Complaint seeking money damages, asserting that
FCA breached the Agreement by utilizing outside vendors to manufacture castings that included
Freeman’s patents. (Filing No. 1.) The Complaint also alleges that FCA breached the Agreement
by failing to seek legal remedies on Freeman’s behalf against those who infringed upon his patents.
Id. Freeman is proceeding in forma pauperis (“IFP”) (Filing No. 9). FCA now seeks to dismiss
Freeman’s Complaint, arguing that the Agreement permits FCA to contract with outside vendors
to make products for FCA. (Filing No. 23.) FCA also argues that the Agreement does not mandate
it to enforce Freeman’s patents. Id.
II.

LEGAL ANALYSIS

Federal Rule of Civil Procedure 12(b)(6) authorizes a defendant to move to dismiss a
complaint that fails to “state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6).

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When deciding a motion to dismiss under Rule 12(b)(6), the court construes the complaint in the
light most favorable to the plaintiff, accepts all factual allegations as true, and draws all reasonable
inferences in favor of the plaintiff. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).
However, courts “are not obliged to accept as true legal conclusions or unsupported conclusions
of fact.” Hickey v. O’Bannon, 287 F.3d 656, 658 (7th Cir. 2002).
While a complaint need not include detailed factual allegations, a plaintiff has the
obligation to provide the factual grounds supporting his entitlement to relief; and neither bare legal
conclusions nor a formulaic recitation of the elements of a cause of action will suffice in meeting
this obligation. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Stated differently, the
complaint must include “enough facts to state a claim to relief that is plausible on its face.” Hecker
v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009) (citation and quotation marks omitted). To be
facially plausible, the complaint must allow “the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 556).
Additionally, “[a] document filed pro se is to be liberally construed, and a pro se complaint,
however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted
by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007). However, the Court notes that:
[I]t is also well established that pro se litigants are not excused from compliance
with procedural rules. [T]he Supreme Court has never suggested that procedural
rules in ordinary civil litigation should be interpreted so as to excuse mistakes by
those who proceed without counsel[.] Further, as the Supreme Court has noted, in
the long run, experience teaches that strict adherence to the procedural requirements
specified by the legislature is the best guarantee of evenhanded administration of
the law.
Loubser v. United States, 606 F. Supp. 2d 897, 909 (N.D. Ind. 2009) (citations and quotation marks
omitted).

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[E]ven pro se litigants . . . must expect to file a legal argument and some supporting
authority. A litigant who fails to press a point by supporting it with pertinent
authority, or by showing why it is sound despite a lack of supporting authority . . .
forfeits the point. We will not do his research for him.
Mathis v. New York Life Ins. Co., 133 F.3d 546, 548 (7th Cir. 1998) (citations and quotation marks
omitted).
III.

DISCUSSION

FCA moves to dismiss Freeman’s Complaint, arguing that Freeman failed to state a claim
upon which relief can be granted. Specifically, FCA asserts that the Agreement permits it to hire
outside vendors to make products. FCA also contends that the Agreement does not require it to
seek legal remedies against those who infringe upon Freeman’s patents.
A.

Outside Vendors.
Freeman asserts that FCA breached the Agreement and must make royalty payments

because FCA allowed outside vendors to use his patents when making parts for FCA. FCA asks
the Court to dismiss Freeman’s claim because the Agreement permits FCA to contract with third
parties to make its products. In response, Freeman argues that the plain language of the Agreement
prohibits FCA from outsourcing to third parties and establishes that FCA may only manufacture
parts using Freeman’s patents in facilities where FCA controls over fifty percent of the voting
stock. Section 3 of the Agreement states:
FREEMAN grants to CHRYSLER, its controlled companies, affiliates and
subsidiaries in which CHRYSLER owns or controls over fifty percent (50%) of the
voting stock, a royalty-free, irrevocable, world-wide, non-exclusive license to
make, have made, use and sell products which embody or are produced by the
Licensed Inventions for CHRYSLER products and vehicles, including without
limitation the repair and service thereof.
(Filing No. 1-1 at 2) (emphasis added). The primary rule of contract construction is to give words
their plain and ordinary meaning. AM General, LLC v. Amour, 46 N.E.3d 436, 440 (Ind. 2015).

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“Clear and unambiguous terms in the contract are deemed conclusive, and when they are present
[the court] will not construe or look to extrinsic evidence, but will merely apply the contractual
provision.” Id.
The plain language of the Agreement specifically states that FCA—owner of Chrysler’s
assets—has a royalty-free license. Additionally, when viewing Section 3 of the Agreement as a
whole, the language “license to…have made” gives FCA the freedom to contract with third parties.
If the Court permits Freeman’s reading of the contract, that FCA was limited to making parts in
FCA facilities, then the language—license “to make” and “have made”—would be redundant. For
these reasons, the Court cannot find that FCA is obligated to make royalty payments under terms
of the Agreement. The Court also finds that the “fifty percent (50%) of the voting stock” clause
that Freeman relies on, modifies the subsidiaries and affiliates who are granted licenses but does
not limit who can make products for FCA. Accordingly, because the Agreement permits FCA to
contract with third parties to make its products, the Court grants FCA’s Motion to dismiss this
claim.
B.

Legal Remedy Against Infringers.
Freeman also claims that FCA breached the Agreement by failing to assert legal remedies

on Freeman’s behalf against those who infringed upon Freeman’s patents. FCA asks the Court to
dismiss this claim because the Agreement establishes that FCA has an option, rather than an
obligation, to enforce Freeman’s patents. The Court agrees. Section 10 of the Agreement states:
Upon consultation with FREEMAN, and with FREEMAN’S authorization and
consent and in FREEMAN’S name, CHRYSLER may sue infringers during the
term of any patent that issues from the Applications within a ninety (90) day period
after notification by FREEMAN of such infringement. CHRYSLER shall pay the
cost and expenses of any suit commenced during the ninety day (90) period, and
any recoveries arising from the suit will be shared equally by CHRYSLER and
FREEMAN. At the end of the ninety (90) day period FREEMAN has the sole right
to sue infringers during the term of any patent that issues from the Applications.
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FREEMAN shall pay the cost and expenses of any suit commenced after the ninety
day (90) period, and any recoveries arising from the suit will belong to FREEMAN.
(Filing No. 1-1 at 4-5) (emphasis added).
FCA does not have an obligation to enforce Freeman’s patents because a plain language
interpretation of the term “may,” suggests that suing infringers is optional rather than required.
The Agreement further makes clear that FCA is not required to take legal action because it
establishes that “Freeman has the sole right to sue infringers” if the FCA does not. Accordingly,
FCA’s Motion to dismiss this claim is granted.
IV.

CONCLUSION

For the reasons stated above, Defendant FCA’s Motion to Dismiss (Filing No. 23) is
GRANTED and Freeman’s Complaint is dismissed because he has failed to state a claim upon
which relief can be granted. Freeman shall have through March 22 2017, in which to show cause
why judgment consistent with this Entry should not issue. See Luevano v. Wal-Mart Stores, Inc.,
722 F.3d 1014, 1022 (7th Cir. 2013) (“Without at least an opportunity to amend or to respond to
an order to show cause, an IFP applicant’s case could be tossed out of court without giving the
applicant any timely notice or opportunity to be heard to clarify, contest, or simply request leave
to amend.”).

SO ORDERED.

Date: 2/23/2017

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DISTRIBUTION:
Lewis Gene Freeman
1509 Pontiac Drive
Kokomo, Indiana 46902
Paul Stephen Fardy
SWANSON MARTIN & BELL
[e-mail]
Timothy Allon Renfro, Jr.
SWANSON MARTIN & BELL LLP
[e-mail]

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