CheckPoint Fluidic Systems International, Ltd. v. RAM Repairs, LLC et al

Filing 140

ORDER & REASONS denying 120 Motion to Dismiss or to Sever. Signed by Chief Judge Sarah S. Vance on 5/21/2012. (rll, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

CHECKPOINT FLUIDIC SYSTEMS
INTERNATIONAL, LTD.

CIVIL ACTION

VERSUS

NO: 10-4505

RAY GUCCIONE, SR., ET AL.

SECTION: R(1)

ORDER AND REASONS
Before the Court is defendant Dyn-O-Mach, Inc.’s motion to
dismiss or to sever.1

Because the Court finds that service of

process was sufficient, and Dyn-O-Mach was properly joined as a
defendant in this suit, the Court DENIES defendant’s motion.

I. BACKGROUND
This trademark infringement, false advertising and unfair
competition case arises out a dispute between plaintiff
CheckPoint Fluidic Systems (“CheckPoint”) and defendants Ray
Guccione (“Guccione”) and RAM Repairs LLC (“RAM).

CheckPoint is

a limited partnership that designs, manufactures and sells
chemical injection pumps.

Guccione is a former employee and

limited partner of CheckPoint.2

After leaving CheckPoint,

1

R. Doc. 120.

2

Guccione continues to hold a limited partnership in the

company.

Guccione became the managing partner and a thirty-six percent
owner of RAM, a company that manufactures and sells chemical
injection pumps called “Monkey Pumps.”

CheckPoint asserts that

RAM and Guccione designed the Monkey Pump through the use of its
confidential and proprietary information and trade secrets.

As a

result, CheckPoint sued Guccione and RAM for violations of the
Lanham Act, trademark infringement and dilution, and false
advertising.3

Plaintiff also asserted violations of the

Louisiana Trade Secrets Act, the Louisiana Unfair Trade Practice
and Consumer Protection Act, state law trademark infringement,
and breach of fiduciary duty.
In response, defendants filed counterclaims against
CheckPoint, as well as C-Pace, LLC, the general partner of
CheckPoint, and Andrew Elliott, the alleged principal of C-Pace.4
The Court granted plaintiff’s motion to dismiss these
counterclaims with leave to amend.5

After defendants amended

their counterclaims, the Court granted plaintiff’s motion to
dismiss the amended claims.6
On February 8, 2012, CheckPoint filed an amended complaint
naming Dyn-O-Mach, Inc. (“Dyn-O-Mach”) as a defendant.

3

R. Doc. 1.

4

R. Doc. 9.

5

R. Doc. 41.

6

R. Doc. 108.
2

CheckPoint asserts that Dyn-O-Mach violated the Louisiana Trade
Secrets Act and breached its confidentiality agreement with
CheckPoint.

CheckPoint alleges that it used Dyn-O-Mach as an

outside vendor to make CheckPoint pumps.

CheckPoint asserts that

in this capacity, CheckPoint provided Dyn-O-Mach with trade
secret and proprietary information, including pump design and
fabrication drawings, under an agreement of confidentiality.
CheckPoint further alleges that the RAM defendants used Dyn-OMach to manufacture Monkey Pumps, and that the two companies used
CheckPoint’s proprietary information to build these pumps.
Dyn-O-Mach now moves to dismiss.

Dyn-O-Mach asserts that

CheckPoint failed to properly serve Dyn-O-Mach, that Dyn-O-Mach
is not a required party, and that it therefore should be
dismissed or severed from the lawsuit.

Plaintiff opposes the

motion.

II. DISCUSSION
A. Insufficient Service of Process
If a party is not validly served with process, proceedings
against that party are void.

Aetna Bus. Credit, Inc. v.

Universal Decor & Interior Design, Inc., 635 F.2d 434, 435 (5th
Cir. 1981).

When service of process is challenged, the party on

whose behalf service was made bears the burden of establishing
its validity.

People’s United Equip. Finance Corp. v. Hartmann,
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447 Fed. Appx. 522, 524 (5th Cir. 2011) (citing Aetna, 635 F.2d
at 435).

A party can generally meet this burden by producing the

return of service, which is prima facie evidence of the manner in
which service was made.

Id. (citing O'Brien v. R.J. O'Brien &

Assocs., Inc., 998 F.2d 1394, 1398 (7th Cir. 1993)).

“The

district court enjoys a broad discretion in determining whether
to dismiss an action for ineffective service of process.”

George

v. U.S. Dep't of Labor, 788 F.2d 1115, 1116 (5th Cir. 1986).
CheckPoint filed its amended complaint on February 8, 2012.
The service returns in the record show that service was made on
Dyn-O-Mach on February 11, 2012.

Plaintiff therefore satisfied

its burden of producing prima facie evidence that service was
made, and the burden shifts to the defendant to produce evidence
showing that the service was improper.7

See Seal v. Louisiana,

2005 WL 3543836, at *2 (E.D. La. Oct. 18, 2005) (citing Tinsley
v. Comm’r, 1998 WL 59481, at *3 (N.D. Tex. Feb. 9, 1998)).
Dyn-O-Mach does not dispute that service was made.

Rather,

it asserts that process was insufficient because CheckPoint
failed to include a copy of the scheduling Order along with the
complaint, as required by the Scheduling Order.

Under Federal

Rule of Civil Procedure 4, “[a] summons must be served with a

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The Court also notes that service was made only a few
days after the filing of plaintiff’s amended complaint -- well
within the 120-day period permitted under Federal Rule of Civil
Procedure 4(m). See Fed. R. Civ. P. 4(m).
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copy of the complaint...[by] any person who is at least 18 years
old and not a party”.

Fed. R. Civ. P. 4(c).

The Court’s

Scheduling Order is not a part of the procedural requirements for
service of process under the Federal Rules.

That the Court

Ordered “[c]ounsel adding new parties subsequent to mailing of
this Notice..[to] serve on each new party a copy of this Minute
Entry”8 does not make plaintiff’s service of process
insufficient.

Further, Dyn-O-Mach was not prejudiced by

CheckPoint’s failure to include the Scheduling Order with Dyn-OMach’s summons. CheckPoint hand-delivered a copy of the
Scheduling Order to Dyn-O-Mach on March 26, 2012.

Dyn-O-Mach,

therefore, has received a copy of the Scheduling Order.

Further,

the Scheduling Order is part of the record accessible to Dyn-OMach through PACER.

Accordingly, the Court will not dismiss Dyn-

O-Mach because of insufficient service of process.

B. Joinder of Dyn-O-Mach
“On motion or on its own, the court may at any time, on just
terms, add or drop a party.”

Fed. R. Civ. P. 21.

Under Rule 21,

a district court has “broad discretion to sever” improperly
joined parties.

Brunet v. United Gas Pipeline Co., 15 F.3d 500,

505 (5th Cir. 1994); see also Anderson v. Red River Waterway
Comm'n, 231 F.3d 211, 214 (5th Cir. 2000).

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R. Doc. 109.
5

Courts in the Fifth

Circuit look to Rule 20 to determine if parties have been
misjoined and should be severed under Rule 21.

Acevedo v.

Allsup's Convenience Stores, Inc., 600 F.3d 516, 521 (5th Cir.
2010).

Federal Rule of Civil Procedure 20(a)(2) permits the

joinder of defendants in one action if (1) plaintiff asserts a
right to relief against the defendants jointly or severally; (2)
that right to relief arises from a single transaction or
occurrence; and (3) there is a question of law or fact common to
all defendants.

See Fed. R. CIV. P. 20(a)(2).

The Fifth Circuit

has described Rule 20 as creating a two-prong test that allows
joinder when (1) claims arise out of the same transaction,
occurrence, or series of transactions and (2) there is at least
one common question of law or fact linking all of the claims.
Acevedo, 600 F.3d at 521 (finding that the district court did not
abuse its discretion in denying joinder of over 800 decertified
FLSA claimants under Rule 20).
To determine what constitutes a “transaction or occurrence”
for purposes of the first prong of the test allowing joinder,
courts look to the definitions of these same terms in the
analysis of compulsory counterclaims under Rule 13(a).

Nor-Tex

Agencies, Inc. v. Jones, 482 F.2d 1093, 1100 (5th Cir.
1973)(citing Rule 13 to affirm the district court’s joinder under
Rule 20(a)); Porter v. Milliken & Michaels, Inc., 2000 WL
1059849, at *2 (E.D. La. Aug. 1, 2000)(relying on Alexander v.

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Fulton Cnty, 207 F.3d 1303 (11th Cir. 2000)); see also, 7 CHARLES
ALAN WRIGHT, ET. AL., FEDERAL PRACTICE AND PROCEDURE § 1653
(explaining that the transaction and occurrence test is
“reminiscent” of the logical-relationship test used to determine
the meaning of transaction or occurrence for purposes of Rule
13(a)).

To make this determination, the Fifth Circuit considers,

inter alia, whether the two claims raise issues of fact and law
that are largely the same.

See Tank Insulation Inter., Inc. v.

Insultherm, Inc., 104 F.3d 83, 85-86 (5th Cir. 1997) (discussing
four ways that a counterclaim may be compulsory).

Rule 20's

second prong is satisfied s long as the parties share “some”
common question of law or fact.

Porter, 2000 WL 1059849, at *2.

“Generally, permissive joinder...under Rule 20 is at the
option of the plaintiffs, assuming they meet the requirements set
forth in Rule 20.”

Applewhite v. Reichhold Chems., Inc., 67 F.3d

571, 574 (5th Cir. 1995).

But, even when the Rule 20 test is

satisfied, a district court may still refuse joinder in the
interest of avoiding prejudice and delay, ensuring judicial
economy, or safeguarding principles of fundamental fairness.
Acevedo, 600 F.3d at 521 (finding that district courts have
considerable discretion to deny joinder)(citing inter alia
Applewhite, 67 F.3d at 574.)).
Dyn-O-Mach argues that it is not a required party under
Federal Rule of Civil Procedure 19 and therefore should be

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dismissed from this action pursuant to Rule 21.

CheckPoint

argues that joinder of Dyn-O-Mach was proper under Federal Rule
of Civil Procedure 20(a).

The propriety of Dyn-O-Mach’s joinder

depends upon satisfaction of the requirements of permissive
joinder under Rule 20 and not, as Dyn-O-Mach asserts, required
joinder under Rule 19.

Accordingly, the Court must determine

whether joinder of Dyn-O-Mach satisfies Rule 20.
The Court finds that Dyn-O-Mach was properly joined under
Rule 20.

CheckPoint asserts that Guccione, RAM, and Dyn-O-Mach

all misappropriated CheckPoint’s confidential design drawings.
CheckPoint’s claims against Guccione and RAM for violation of the
Louisiana Trade Secrets Act and its claims against Dyn-O-Mach for
violation of the same Act both will require proof that the design
drawings were trade secrets and that the defendants
misappropriated those secrets.

Moreover, this is not a case in

which the plaintiff seeks to join an alleged infringer that has
no relationship with the other defendants.

See, e.g., SB Designs

v. Reebok Int’l, Ltd., 305 F.Supp. 2d 888, 892 (N.D. Ill. 2004)
(holding that joinder of an alleged infringer was improper
because the complaint did not allege any relationship between the
allegedly infringing acts of the would-be defendant and any other
defendant); but see Alford Safety Servs., Inc. v. Hot-Hed, Inc.,
2010 WL 3418233, at *10 (E.D. La. Aug. 24, 2010) (denying
defendant’s motion to dismiss or to sever when unrelated

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defendants allegedly violated the same patent); Mannatech, Inc.
v. Country Life, LLC, 2010 WL 2944574, at *2 (N.D. Tex. 2010)
(denying motion to dismiss or sever because unrelated defendants’
products allegedly infringed the same patent).

Here, CheckPoint

alleges that Guccione, RAM and Dyn-O-Mach acted together to build
the allegedly trademark-infringing pumps.

Indeed, CheckPoint

asserts its claim for violation of the Louisiana Trade Secrets
Act against all three defendants.
the interests of
these claims.

Further, the Court finds that

judicial economy counsel in favor of joinder of

Accordingly, the Court finds that CheckPoint’s

claims against Dyn-o-Mach arise out of the same transaction or
occurrence as its claims against Guccione and Ram, and that there
is at least one common question of law or fact linking the
claims.

Joinder under Rule 20 is therefore proper, and Dyn-O-

Mach’s motion to sever is without merit.

IV. CONCLUSION
For the foregoing reasons, the Court DENIES Dyn-O-Mach’s
motion to dismiss.
New Orleans, Louisiana, this 21st day of May, 2012.
___
_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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