SLP PERFORMANCE PARTS, INC. v. SUNCOAST AUTOMOTIVE PERFORMANCE, INC.

Filing 24

ORDER that Plaintiff's Motion for leave to file an Amended Complaint pursuant to FED. R. CIV. P. 15 [dkt. entry no. 20 ] is GRANTED; that Plaintiff shall file the Amended Complaint by November 23, 2011. Signed by Magistrate Judge Douglas E. Arpert on 11/18/2011. (mmh)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
SLP PERFORMANCE PARTS, INC.,

:
:
Plaintiff,
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v.
:
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SUNCOAST AUTOMOTIVE
:
PERFORMANCE, INC.,
:
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Defendant.
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____________________________________:

Civil Action No.: 11-3460 (MLC)

ORDER

This matter having come before the Court on Motion by Plaintiff SLP Performance Parts, Inc.
(“Plaintiff”) for leave to file an Amended Complaint pursuant to FED . R. CIV . P. 15 [dkt. entry no.
20], returnable November 21, 2011; and Defendant Suncoast Automotive Performance, Inc.
(“Defendant”) having submitted opposition; and Plaintiff noting that Defendant’s motion to dismiss
the Complaint based on lack of personal jurisdiction was denied on September 20, 2011 (Pl.’s Br.,
dkt. entry no. 20-4 at 3); and Plaintiff stating that “[a]fter filing its original Complaint[,] [it] was
made aware of certain other products offered on [Defendant’s] website which infringe on
[Plaintiff’s] design patent numbers D386,457 and D418,465” and therefore seeks to bring “[t]hese
additional claims...under 28 U.S.C. § 1338(a)” (Id.); and Plaintiff, citing FED . R. CIV . P. 15, Foman
v. Davis, 371 U.S. 178, 182 (1962), Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000), Alvin v.
Suzuki, 227 F.3d 107, 121 (3d Cir. 2000), maintains that “leave to amend a complaint...[should] be
freely given when justice so requires” absent “undue delay, bad faith or dilatory motive”, “repeated
failure to cure deficiencies by amendments previously allowed”, “undue prejudice to the opposing
party...”, or “futility of [the] amendment” (Id. at 3-4); and Plaintiff arguing that “there has been no
undue delay or [any] dilatory motive”, “there can be no claim of undue prejudice since [Plaintiff’s]

decision to add new claims is based upon the core events cited in the original complaint”, and “there
can be no claim of futility since the newly asserted claims arise under 28 U.S.C. § 1338(a)” (Id. at
4-5); and in opposition, Defendant continuing “to assert that [Plaintiff’s] Complaint should be
dismissed because [the] Court lacks personal jurisdiction over Defendant” given that “[n]othing in
the proposed Amended Complaint cures that defect” (Def.’s Opp’n Br., dkt. entry no. 22 at 1); and
Defendant, noting that “the sole basis given for the Court denying [Defendant’s] previous motion
to dismiss” was “[t]he Daniecki Declaration”, requests that “the Court...deny [Plaintiff’s] motion to
amend” or, in the alternative, “withhold its ruling on the motion to amend until after a brief period
of limited discovery on the issue of personal jurisdiction...and a fact-finding hearing before the
Court” based upon the Court’s provision that “[Defendant] may raise its jurisdictional arguments
anew at a later point in this case” (Id.); and Defendant arguing that “[i]f the factual determination
of personal jurisdiction were delayed until after [Defendant] is subject to extensive general discovery
requests...and the Court then determines that [Plaintiff] has not met its jurisdictional burden,
[Defendant] would be unduly prejudiced by the burden and expense of that discovery” (Id.); and
Defendant noting that the Daniecki Declaration “asserts that [Defendant] sold a Chevrolet Camaro
Z Style Ram Air Hood in New Jersey” but “does not provide...[Defendant’s] part number...or
[assert]...that the hood mentioned was one of the products [Plaintiff] alleges infringe the ‘570 patent”
and therefore “is defective on its face” if “meant to imply sales of allegedly infringing products” (Id.
at 2); and Defendant, noting that the Daniecki Declaration “states that...[an] Air Hood was ordered
from [Defendant’s] website on July 27, 2009” and that “[t]he ‘570 patent...was filed on July 9, 2009
and issued on September 14, 2010”, argues that “[a] patent cannot be infringed by sales made before
its issuance” pursuant to State Indus., Inc. v. A.O. Smith Corp., 751 F.2d 1226, 1237 (Fed. Cir.
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1985), Gayler v. Wilder, 51 U.S. 477, 493 (1850), and Marsh v. Nichols, Shepard & Co., 128 U.S.
605, 612 (1888) (Id.); and Defendant, citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473-75
(1985), Osteotech, Inc. v. GenSci Regeneration Sciences, 6 F. Supp. 2d 349, 353 (D.N.J. 1998), and
Covenant Bank for Sav. v. Cohen, 806 F. Supp. 52, 55 (D.N.J. 1992), argues that the “purposeful
availment requirements ensure that a defendant will not be haled into a jurisdiction solely as a result
of random, fortuitous or attenuated contacts, or...[based upon] the unilateral activity of another party
or a third person” and that Plaintiff’s failure to specify whether the Daniecki declarant is an
employee “casts doubt on the veracity of the Declaration...[and] demonstrates that [Defendant] did
not purposefully reach out and target the New Jersey market” (Id. at 3); and Defendant arguing that
even “[a]ssuming that the Daniecki Declaration were proof of a single infringing sale, ...that would
still be insufficient to support this Court exercising personal jurisdiction over [Defendant]...unless
[Plaintiff] is able to provide additional evidence that existed at the time of the filing of the
Complaint” pursuant to Oticon, Inc. v. Sebotek Hearing Sys., LLC, 2011 U.S. Dist. LEXIS 93219,
at *34 (D.N.J. 2011), J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780 (2011), and GAF Bldg.
Materials Corp. v. Elk Corp., 90 F.3d 479, 483 (Fed. Cir. 1996) (Id. at 4-5); and Defendant, citing
Cateret Sav. Bank, FA v. Shushan, 954 F.2d 141, 142 (3d Cir. 1992), Jervis B. Webb Co. v. Southern
Sys., Inc., 742 F.2d 1388, 1398 (Fed. Cir. 1984), GAF, 90 F.3d at 483, Davis v. Union Pac. R.R. Co.,
224 Fed. Appx. 190, 192 (3d Cir. 2007), and Petruska v. Gannon Univ., 462 F.3d 294, 302, n.3 (3d
Cir. 2006), argues that “[Defendant] has not sold any of the accused products in New Jersey” and
“even giving the Daniecki Declaration the broadest possible implied meaning, such implication is
directly refuted by the Declaration of Philip Grabo” such that “[t]he time has come...for [Plaintiff]
to prove a preponderance of acts sufficient to overcome the Complaint’s jurisdictional defect” (Id.
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at 3-4); and Defendant, citing DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284,
1286, n.7 (Fed. Cir. 2008), maintains that “[i]n light of the factual disputes raised by [Defendant],
a hearing on the issue of jurisdiction would be appropriate” and that the “denial of a request for
jurisdictional discovery can be an error when the jurisdictional and merits issues are separable” given
that Defendant “would be unduly prejudiced by having to undergo extensive general discovery by
an acknowledged business competitor...when the jurisdictional issue can likely be resolved by a short
period of discovery limited to that issue...with a subsequent hearing before the Court” (Id. at 5-6);
and the Court noting it “should freely give leave [to amend] when justice so requires” (FED . R. CIV .
P. 15(a)(2); see also Bjorgung v. Whitetail Resort, LP, 550 F.3d 263, 266 (3d Cir. 2008)) and that
the decision to grant a motion to amend a pleading rests in the sound discretion of the district court
(Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330 (1970); see also Morton
International, Inc. v. A.E. Staley Manuf. Co., 106 F. Supp. 2d 737, 744 (D.N.J. 2000)); and the Court
further noting that it “has discretion to deny the request only if the plaintiff’s delay in seeking to
amend is undue, motivated by bad faith, or prejudicial to the opposing party” (Adams v. Gould, 739
F.2d 858, 864 (3d Cir. 1984); see also Foman v. Davis, 371 U.S. 178, 182 (1962); Arthur v. Maersk,
Inc., 434 F.3d 196, 204 (3d Cir. 2006); Hill v. City of Scranton, 411 F.3d 118, 134 (3d Cir. 2005));
and the Court noting that delay becomes “undue”, and thereby creates grounds for the district court
to refuse to grant leave, when it places an unwarranted burden on the Court, when the movant has
had previous opportunities to amend, or when it becomes prejudicial to the opposing party (see
Adams, 739 F.2d at 868; see also Cureton v. NCAA, 252 F.3d 267, 273 (2001)); and the Court noting
that “the Third Circuit has consistently recognized that ‘prejudice to the non-moving party is the
touchstone for the denial of an amendment’” (Schindler Elevator Corp. v. Otis Elevator Co., 2009
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U.S. Dist. LEXIS 40994, at *9 (D.N.J. 2009); see also Arthur, 434 F.3d at 204 (quoting Cornell &
Co., Inc. v. Occupational Safety & Health Review Comm’n, 573 F.2d 820, 823 (3d Cir. 1978))); and
the Court further noting that a trial court may also deny leave to amend where “an amendment would
be futile when the ‘complaint, as amended, would fail to state a claim upon which relief could be
granted’” (In re NAHC, Inc. Sec. Litig., 306 F.3d 1314, 1332 (3d Cir. 2002)(quoting In re Burlington
Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir. 1997)) based upon whether the Plaintiff has
pled “enough facts to state a claim to relief that is plausible on its face” (Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)); and the Court noting that “in determining the futility of an amendment,
the Court applies the same standard of legal sufficiency as applies under Rule 12(b)(6)” and
“accept[s] as true all factual allegations contained in the proposed amended complaint and any
reasonable inferences that can be drawn from them” (Walls v. County of Camden, 2008 WL
4934052, at *2 (D.N.J. 2008); see also Medpointe Healthcare, Inc. v. Hi-Tech Pharm. Co., Inc., 380
F. Supp. 2d 457, 462 (D.N.J. 2005); Alvin v. Suzuki, 227 F.3d 107, 121 (3d Cir. 2000); Brown v.
Phillip Morris, Inc., 250 F.3d 789, 796 (3d Cir. 2001)); and the Court noting that “if the proposed
amendment is frivolous or advances a claim or defense that is legally insufficient on its face, the
court may deny leave to amend” but where the “proposed amendment is not clearly futile, then denial
of leave to amend is improper” (Harrison Beverage Co. v. Dribeck Importers, Inc., 133 F.R.D. 463,
468-49 (D.N.J. 1990)); and the Court noting that in the original Complaint, Plaintiff alleged that –
among others things – Defendant infringed “Design Patent...D623,570 (“‘570 Patent”), a patent
which was issued in 2010 and relates to “the design of a[n] [automobile] hood”, by “making, offering
for sale, selling and marketing a[n]...‘Air Hood’ having a design disclosed and claimed in the ‘570
Patent through [Defendant’s] website” and by “knowingly and intentionally cop[ying] [Plaintiff’s]
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[air] hood design covered by the ‘570 Patent” (Pl.’s Compl., dkt. entry no. 1 at 3-4); and the Court
noting that Defendant filed a motion to dismiss the original Complaint for lack of personal
jurisdiction on July 25, 2011 (see dkt. entry no. 11), and related reply brief (see dkt. entry no. 15),
which Plaintiff opposed on August 22, 2011 (see dkt. entry no. 14); and the Court noting that
Defendant’s motion to dismiss the original Complaint for lack of personal jurisdiction was denied
on September 20, 2011 (see dkt. entry no. 17); and the Court noting that Plaintiff seeks to amend the
Complaint to assert that Defendant also infringed “Design Patent...D386,457 (“‘457 Patent”) and
“Design Patent...D418,465 (“‘465 Patent”), patents which were issued in 1997 and 2000,
respectively, and relate to “the design of an automobile hood”, by “making, offering for sale, selling
and marketing...air hoods having a design disclosed and claimed in the ‘570 Patent, ‘457 Patent,
and/or ‘465 Patent through [Defendant’s] website” and by “knowingly and intentionally cop[ying]
[Plaintiff’s] air hood designs covered by the ‘570 Patent, ‘457 Patent, and/or ‘465 Patent” (Pl.’s
Proposed Am. Compl., dkt. entry no. 20-2 at 3-6); and the Court noting that Defendant’s opposition
to this Motion (see dkt. entry no. 22) is substantially similar to the arguments advanced in support
of its motion to dismiss the original Complaint (see dkt. entry nos. 11 & 15); and the Court noting
that although a Rule 16 conference was held on November 1, 2011 (see dkt. entry no. 18), a
Scheduling Order has not been entered and the parties are only at the outset of discovery; and the
Court finding that Defendant’s arguments in opposition to this Motion are unavailing at this time for
the same reasons articulated in the Court’s Order denying Defendant’s motion to dismiss the original
Complaint for lack of personal jurisdiction (see dkt. entry no. 17); and the Court finding that
Defendant has failed to demonstrate that any undue delay, bad faith, or prejudice are present in this
instance or that Plaintiff’s Amended Complaint would fail to state a claim upon which relief could
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be granted (see Adams, 739 F.2d at 864; see also In re NAHC, 306 F.3d at 1332; Bell Atl., 550 U.S.
at 570); and the Court having reviewed the parties’ written submissions; and the Court having
considered the matter pursuant to FED . R. CIV . P. 78; and for the reasons stated above;
IT IS on this 18th day of November, 2011,
ORDERED that Plaintiff’s Motion for leave to file an Amended Complaint pursuant to FED .
R. CIV . P. 15 [dkt. entry no. 20] is GRANTED; and it is further
ORDERED that Plaintiff shall file the Amended Complaint by November 23, 2011.
s/ Douglas E. Arpert
DOUGLAS E. ARPERT
UNITED STATES MAGISTRATE JUDGE

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