RICHMOND v. NINGBO HANGSHUN ELECTRICAL CO., LTD. et al

Filing 105

MEMORANDUM OPINION. Signed by Judge Mary L. Cooper on 4/30/2014. (gxh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1944 (MLC)

Plaintiff,
v.
LUMISOL ELECTRICAL LTD., et al.,
Defendants.

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1949 (MLC)

Plaintiff,
v.
QUANZHOU BRIGHT SOLAR ENERGY CO.
LTD, et al.,
Defendants.

SIMON NICHOLAS RICHMOND,
Plaintiff,
v.
DAINTILY LLC, et al.,
Defendants.

CIVIL ACTION NO. 13-1950 (MLC)

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1951 (MLC)

Plaintiff,
v.
WINCHANCE SOLAR FUJIAN TECHNOLOGY
CO. LTD., et al.,
Defendants.

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1952 (MLC)

Plaintiff,
v.
JIAWEI NORTH AMERICA INC., et al.,
Defendants.

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1953 (MLC)

Plaintiff,
v.
JIAWEI NORTH AMERICA INC., et al.,
Defendants.

2

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1954 (MLC)

Plaintiff,
v.
WINCHANCE SOLAR FUJIAN TECHNOLOGY
CO. LTD., et al.,
Defendants.

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1957 (MLC)

Plaintiff,
v.
CHIEN LUEN INDUSTRIES CO., LTD.,
INC., et al.,
Defendants.

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1958 (MLC)

Plaintiff,
v.
ATICO INTERNATIONAL (ASIA) LTD.,
et al.,
Defendants.

3

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1959 (MLC)

Plaintiff,
v.
WINCHANCE SOLAR FUJIAN TECHNOLOGY
CO. LTD., et al.,
Defendants.

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-1960 (MLC)

Plaintiff,
v.
SMART SOLAR INC., et al.,
Defendants.

SIMON NICHOLAS RICHMOND,

CIVIL ACTION NO. 13-2916 (MLC)

Plaintiff,
v.
WALGREEN CO.,
Defendant.
MEMORANDUM OPINION
COOPER, District Judge
This matter comes before the Court by way of the separate
appeals by several defendants from the Magistrate Judge’s February
4, 2014 Memorandum and Order (“Magistrate Judge’s Decision”).

4

The

Magistrate Judge denied the separate motions of several of the
defendants in multiple actions brought by Plaintiff, Simon Nicholas
Richmond (“Plaintiff”).

(See Case No. 13-1944, dkt. entry no. 91,

Magistrate Judge’s Decision.)1

The twelve actions brought by

Plaintiff in this District have been consolidated for purposes of
case management and pretrial discovery.

(See, e.g., Case No. 13-

1944, dkt. entry no. 103, Consolidation Order.)2

The separate

appeals before the Court are from the following groups of
defendants (collectively “Appellants”):
(1)

Coleman Cable, Inc. (“Coleman”) (Case No. 13-1951, dkt.
entry no. 198; Case No. 13-1953, dkt. entry no. 93; Case
No. 13-1954, dkt. entry no. 90; Case No. 13-1959, dkt.
entry no. 116)3;

1

For the ease of the reader, the Court will cite only to Case
No. 13-1944 for the content of the Magistrate Judge’s Decision.
However, the same decision appears on four other dockets. (Case
No. 13-1951, dkt. entry no. 197; Case No. 13-1953, dkt. entry no.
90; Case No. 13-1954, dkt. entry no. 89; Case No. 13-1959, dkt.
entry no. 115.)
2

The Magistrate Judge consolidated the following cases,
effective August 20, 2013: 13-1944; 13-1949; 13-1950; 13-1951; 131952; 13-1953; 13-1954; 13-1957; 13-1958; 13-1959; 13-1960; and 132916 (collectively “the Consolidated Cases”). (Case No. 13-1944,
dkt. entry no. 103; Case No. 13-1949, dkt. entry no. 49; Case No.
1950, dkt. entry no. 22; Case No. 13-1951, dkt. entry no. 213; Case
No. 13-1952, dkt. entry no. 43; Case No. 13-1953, dkt. entry no.
98; Case No. 13-1954, dkt. entry no. 100; Case No. 13-1957, dkt.
entry no. 41; Case No. 13-1958, dkt. entry no. 44; Case No. 131959, dkt. entry no. 126; Case No. 13-1960, dkt. entry no. 50; Case
No. 13-2916, dkt. entry no. 18.)
3

For the ease of the reader, going forward the Court will cite
only to Case No. 13-1951 for Coleman’s submissions, and Plaintiff’s
response thereto, for this appeal.
5

(2)

Wayfair, LLC and Wayfair, Inc. (Case No. 13-1951, dkt.
entry no. 199); and

(3)

True Value Retail, Inc.; True Value Company; Outsourcing in
Asia, LLC; CVS Caremark Corporation; Caremark, PHC LLC; Ace
Hardware Corporation; Orgill, Inc.; Lowes Home Centers,
Inc.; Lowe’s Companies, Inc.; Rite Aid Corporation; and
Walgreen Co. (collectively “the Dentons Retailer
Defendants”). (Case No. 13-1944, dkt. entry no. 92.)4

For the reasons that follow, the Magistrate Judge’s Decision
will be reversed.

The Court will sever the claims against the

moving defendants and will refer the matter for further proceedings
by the Magistrate Judge on which claims against which defendants
should be stayed in accordance with this Memorandum Opinion.5
I.

BACKGROUND

Because the Court writes only for the parties, the Court
assumes their familiarity with the facts and procedural history and
sets forth only those facts relevant for deciding these separate
appeals.

4

The Dentons Retailer Defendants are defendants in a number of
the Consolidated Cases initiated by Plaintiff. (See Case No. 131944, dkt. entry no. 92, Dentons Retailer Defs.’ Appeal.)
5

In addition to Appellants, several other defendants in the
Consolidated Cases also filed separate motions joining some or all
of Coleman’s motion to sever and stay (collectively “moving
defendants”): Lumisol Electrical Ltd.; Ethan Group, Ltd.; Ethan
Group, Inc.; Epoch Hometex, Inc.; Robert Kang; Costco Wholesale
Corporation; Costco Wholesale Membership, Inc.; Creative
Industries, LLC; Creative Industries, Ltd.; Target Corporation;
Harbor Freight Tools USA, Inc.; Central Purchasing, LLC; and
Unbeatablesale.com. (See Magistrate Judge’s Decision at 3-4.)
6

Plaintiff has initiated twelve lawsuits against the
defendants who operate as manufacturers, importers,
distributors, suppliers, and retailers in the solar-powered
garden light product industry.

There are over eighty defendants

named in the twelve lawsuits to date.

In these lawsuits,

Plaintiff contends that the defendants have infringed one or
more of his patents by their manufacture, distribution, and sale
of the accused products.
Appellants and moving defendants moved to sever the claims
against Coleman from the claims against all the other defendants
pursuant to Federal Rule of Civil Procedure 21 (“Rule 21”) and
35 U.S.C. § 299, and to stay the severed claims against the
downstream retailer defendants -– who merely resold Coleman
branded products and whom Coleman has agreed to indemnify in
these actions -- pending the outcome of Plaintiff’s claims
against Coleman.

The Magistrate Judge denied these motions

without prejudice.

(See Magistrate Judge’s Decision.)

The Magistrate Judge properly recognized that 35 U.S.C. §
299, which sets forth the “scope of joinder in patent
infringement cases,” permits joinder of accused infringers “only
if” the relief arises “out of the same transaction” relating to
“the same accused product or process.”
U.S.C. § 299).)

(Id. at 4-5 (quoting 35

Applying § 299, the Magistrate Judge concluded

7

that Plaintiff identified the “same accused product” for all of
the defendants in each, individual action.

(Id. at 7-8.)

Once

the defendants were properly joined, Plaintiff was permitted to
assert “related claims against properly joined Defendants.”
(Id. at 8.)

With respect to the “same transaction” requirement,

the Magistrate Judge considered whether the infringing acts of
the defendants “share[d] an aggregate of operative facts.”

(Id.

(quoting In re EMC Corp., 677 F.3d 1351, 1359 (Fed.Cir. 2012)).)
The Magistrate Judge found that, at that stage of the
litigation, the same transaction requirement was satisfied by
the pleadings, specifically that the defendants shared a common
Chinese manufacturer and that certain retailer defendants
engaged in private labeling of the accused products.
10.)

(Id. at 9-

The Magistrate Judge also determined that staying claims

against certain defendants would not increase judicial
efficiency.

(Id. at 10.)

Appellants have appealed from the Magistrate Judge’s
Decision.

(See Case No. 13-1951, dkt. entry nos. 198, 199; Case

No. 13-1944, dkt. entry no. 92.)
II.

STANDARD OF REVIEW

“Pursuant to 28 U.S.C. § 636(b)(1)(A), Federal Rule of Civil
Procedure 72(a), and Local Civil Rule 72.1(a), a United States
Magistrate Judge may hear non-dispositive motions,” and a district

8

court, on appeal, “may modify or set aside a magistrate judge's
non-dispositive order if the ruling was clearly erroneous or
contrary to law.”

Eisai Co. v. Teva Pharm. USA, Inc., 629

F.Supp.2d 416, 424 (D.N.J. 2009) (internal quotation marks and
citation omitted).

“A finding is clearly erroneous when although

there is evidence to support it, the reviewing court on the entire
evidence is left with the definite and firm conviction that a
mistake has been committed.”

Marks v. Struble, 347 F.Supp.2d 136,

149 (D.N.J. 2004) (citation and alteration omitted).

A ruling of a

Magistrate Judge is “contrary to law if the Magistrate Judge
misinterpreted or misapplied the applicable law.”

Id.

The party appealing the Magistrate Judge’s order bears the
burden of demonstrating that the order was “contrary to law” or
“clearly erroneous.”

Id.

“While a magistrate judge’s decision

typically is entitled to deference, a magistrate judge’s legal
conclusions on a non-dispositive motion will be reviewed de novo.”
Eisai Co., 629 F.Supp.2d at 424 (internal quotation marks and
citation omitted).
III. JOINDER OF PARTIES UNDER THE AMERICA INVENTS ACT
For civil actions commenced prior to September 16, 2011,
joinder of claims and parties in all cases is evaluated under
Federal Rule of Civil Procedure 20 (“Rule 20”).
Corp., 677 F.3d 1351, 1356 (Fed.Cir. 2012).

9

See In re EMC

Pursuant to Rule 20,

“Defendants may be joined in a single action only if the two
independent requirements . . .

are satisfied: (1) the claims

against them must be asserted ‘with respect to or arising out of
the same transaction, occurrence, or series of transactions or
occurrences,’ and (2) there must be a ‘question of law or fact
common to all defendants.’”

Id. (quoting Fed.R.Civ.P. 20(a)(2)).

While an allegation of joint liability always satisfies the
transaction-or-occurrence test, such an allegation is not required
for joinder.

Id.

Additionally, “the fact that the defendants are

independent actors does not preclude joinder” as long as the
requirements of Rule 20 are satisfied.

Id.

However, “the mere

fact that infringement of the same claims of the same patent is
alleged does not support joinder, even though the claims would
raise common questions of claim construction and patent
invalidity.”

Id. at 1357.

On September 16, 2011 the America Invents Act (the “AIA”) was
signed into law.

Omega Patents, LLC v. Skypatrol, LLC, No. 11-

24201, 2012 WL 2339320, at *1 (S.D. Fl. June 19, 2012).

For civil

actions commenced after September 16, 2011, the AIA, specifically
35 U.S.C. § 299(a), controls the joinder analysis.

See In re EMC

Corp., 677 F.3d at 1355-56; Omega Patents, LLC, 2012 WL 2339320, at
*1-2.

Section 299 of the AIA provides, in part:
(a) Joinder of accused infringers. -- With respect to
any civil action arising under any Act of Congress
10

relating to patents, other than an action or trial in
which an act of infringement under section 271(e)(2) has
been pled, parties that are accused infringers may be
joined in one action as defendants or counterclaim
defendants, or have their actions consolidated for
trial, only if -(1) any right to relief is asserted against the
parties jointly, severally, or in the alternative
with respect to or arising out of the same
transaction, occurrence, or series of transactions
or occurrences relating to the making, using,
importing into the United States, offering for
sale, or selling of the same accused product or
process; and
(2) questions of fact common to all defendants or
counterclaim defendants will arise in the action.
35 U.S.C. § 299.

“The AIA’s joinder provision is more stringent

than Rule 20,” and the AIA “adds a requirement that the transaction
or occurrence must relate to making, using, or selling the same
accused product or process.”
934, 939 (Fed.Cir. 2013).

In re Nintendo Co., 544 Fed.Appx.

Thus, the AIA limits “the number of

accused infringers that can be joined as defendants in one lawsuit,
thereby creating the possibility of more lawsuits on the same
patent.”

See Lighting Ballast Control LLC v. Phillips Elecs. N.

Am. Corp., 744 F.3d 1272, 1293 (Fed.Cir. 2014).
Even where the requirements of § 299 are satisfied, joinder is
not definitively mandated.

“Given the permissive nature of the

applicable rules, . . . these requirements [are] necessary, but not
sufficient, conditions for joinder.”
Fed.Appx. at 939.

In re Nintendo Co., 544

Joinder may still be refused, even where these
11

requirements are satisfied, “in the interest of avoiding prejudice
and delay, ensuring judicial economy, or safeguarding principles of
fundamental fairness.”
1360).

Id. (quoting In re EMC Corp., 677 F.3d at

“In a complicated patent litigation a large number of

defendants might prove unwieldy, and a district court would be
justified in exercising its discretion to deny joinder when
different witnesses and documentary proof would be required.”

In

re EMC Corp., 677 F.3d at 1360 (internal quotation marks and
citation omitted).
While there is no decision yet from the Federal Circuit or the
United States District Court for the District of New Jersey
discussing the application of the AIA’s joinder rule, other
district courts considering § 299 have interpreted it similarly.
Generally speaking, district courts have found that the presence,
in an infringement action, of multiple defendants competing at the
same level in the stream of commerce –- for example two defendants
both manufacturing accused products who are competitors and not
acting in concert –- would result in misjoinder under § 299 because
they would not satisfy the same transaction or occurrence
requirement.

See, e.g., MGT Gaming, Inc. v. WMS Gaming, Inc., No.

12-741, 2013 WL 5755247, at *7-8, 10 (S.D. Miss. Oct. 23, 2013);
Digitech Image Techs., LLC v. Agfaphoto Holding GMBH, No. 12-1153,
2012 WL 4513805, at *3 (C.D. Cal. Oct. 1, 2012); Omega Patents,

12

LLC, 2012 WL 2339320, at *2.

In contrast, multiple defendants

operating at different levels in the same stream of commerce –- for
example, one manufacturer defendant (the upstream defendant) and
one retailer defendant (the downstream defendant) -– can be
properly joined pursuant to § 299 where the upstream defendant
provides the product to the downstream defendant. See, e.g., MGT
Gaming, Inc., 2013 WL 5755247, at *9; Omega Patents, LLC, 2012 WL
2339320, at *2.
While a downstream defendant may be properly joined with the
upstream defendant based on their transaction in the same stream of
commerce, courts have exercised their discretion to sever the
claims against the downstream defendant from the upstream defendant
and then stay the severed claims against the downstream defendant
given the “peripheral nature” of claims against the downstream
defendant.
13.

See, e.g., MGT Gaming, Inc., 2013 WL 5755247, at *11-

Specifically, “[a] patent infringement claim against a

retailer, distributor, or customer of infringing products is
peripheral to a claim against a manufacturer.”

Id. at *12.

The

rationale behind severing and staying in these circumstances is
that “second-hand entities like retailers or distributors [are] not
involved and [would] not have substantive knowledge about the
patent infringement, which would begin at the design and
manufacture stages.”

See id.

The upstream defendant represents

13

“the real party in interest,” and ultimately, an infringement claim
against the upstream defendant “is more likely to restore contested
property rights nationwide than securing an injunction” against a
downstream defendant purchaser.

See id. at *13.

Moreover, the

downstream defendant would only be liable if the upstream defendant
infringed the plaintiff’s patent, and thus, adjudication of the
patent infringement claim against the upstream defendant often
disposes of the claim against the downstream defendant.
IV.
A.

See id.

PARTIES’ ARGUMENTS

Coleman’s Arguments in Support of Appeal
Coleman contends that joinder of direct competitors is not

permitted under the AIA, absent allegations of concerted action,
because they “do not share operative facts.”

(See Case No. 13-

1951, dkt. entry no. 198-1, Coleman’s Br. in Supp. of Appeal at 1420.)

Coleman argues that its sales to its retailers are not the

same transactions as a competitor distributor’s sales to retailers.

14

(Id. at 19.)6

Nor are there allegations that the defendants

engaged in a conspiracy or any concerted action.

(Id. at 10.)

In

fact, Plaintiff alleges that defendants “copied one another’s
products.”

(Id.)

According to Coleman, the Magistrate Judge’s failure to
appropriately sever the claims here contributed to the Magistrate
Judge’s decision to deny the motion to stay.

(Id. at 22.)

Thus,

“Coleman is currently forced to defend and pay for the defense of
numerous retailers in this litigation, whose interests are
peripheral to the critical issue presented –- whether the ColemanBranded Accused Products infringe Plaintiff’s patents in suit.”
(Id.)

Additionally, Coleman asserts that it is defending and

indemnifying many of the retailer defendants with respect to the
Coleman branded products they sold.

6

(Id. at 8.)

Coleman identifies the other distributors who are its
competitors in Case No. 13-1951 as: “Alpine Corporation, Garden Sun
Light, Inc., Outsourcing in Asia, LLC, Central Purchasing LLC,
Resurs2 Corporation, Unbeatable Sale.com and NII Northern
International, Inc.” (Coleman’s Br. in Supp. of Appeal at 9.)
Coleman also asserts that the competitor manufacturers identified
in Case No. 13-1951 are: “Winchance Solar Fujian Technology Co.,
Ltd., Quanzhou Bright Solar Energy Co. Ltd., Jeeyee Solar Energy
Int’l Development Co. and Quanzhou Jeeyee Solar Energy Co., Ltd.”
(Id.) In Case Nos. 13-1953 and 13-1954, Coleman’s competitors are:
“Creative Industries, Garden Sun Light and Jiawei.” (Id. at n.6.)
In Case No. 13-1959, Coleman’s competitors are: “Strokin LLC,
Import Specialties (d/b/a Heartland America) and NII Northern
International.” (Id.)
15

B.

Plaintiff’s Arguments in Support of Magistrate Judge’s
Decision
Plaintiff argues that the AIA did not change Rule 20’s

transaction or occurrence prong such that competitors cannot be
joined unless they acted in concert; rather, the AIA adopted Rule
20’s transaction or occurrence language and added the requirement
of a “same accused product or process.”

(See Case No. 13-1951,

dkt. entry no. 201, Pl.’s Br. in Opp’n at 10-11, 14.)

Therefore –-

according to Plaintiff –- the Federal Circuit’s test from In re EMC
Corp. controls.

(Id. at 12.)

Under In re EMC Corp., Plaintiff

argues, the test for joinder is a “flexible” standard which
considers multiple factors to be weighed in the Magistrate Judge’s
discretion.

(Id. at 7-8, 12.)

not required for joinder.
F.3d at 1356).)

Allegations of joint liability are

(Id. at 12 (citing In re EMC Corp., 677

Plaintiff argues that the claims in the AIA cases

relied upon by Coleman were severed based on the failure to satisfy
the same accused product requirement because the manufacturers were
different.

(Id. at 14-18.)

Plaintiff further contends that the decision to grant a stay
“is entirely within the discretion of the court.”

(Id. at 9.)

He

asserts that the retailer defendants are not peripheral but rather
are directly involved in the infringement because, in addition to
selling Coleman products, they sold identical products under their
own brand names and labels, indicating “that they have some role in
16

the configuration of the product[s].”

(Id. at 19-20.)

Moreover,

Plaintiff argues, “[w]ithout a decision against the retailer
defendant, not just Coleman, the defendants that now purchase
infringing product[s] from Coleman could go to another vendor, and
have a history of doing so.”
C.

(Id. at 24.)

Coleman’s Reply
Coleman argues that Plaintiff’s attempts to distinguish the

cases Coleman replies upon from other districts are “intentionally
myopic” in that Plaintiff focuses only on the courts’ discussion of
the “same product” requirement of § 299 while ignoring the
treatment of competitors under the “same transaction” requirement.
(Case No. 13-1951, dkt. entry no. 203, Coleman’s Reply Br. at 611.)

With respect to Plaintiff’s arguments against Coleman’s

request for a stay, Coleman contends that, absent allegations in
the complaints that the retailer defendants participated “in the
production, design or manufacture of the Coleman-Branded Accused
Products,” the retailer defendants are peripheral to Coleman.

(See

id. at 14.)
V.

DISCUSSION

The primary issue before the Court is whether competitors can
be joined in a patent infringement action under 35 U.S.C. § 299
when they are not alleged to have conspired or acted in concert.
This is purely an issue of law, and thus the Court’s review of the

17

Magistrate Judge’s Decision is de novo.

See Eisai Co., 629

F.Supp.2d at 424.
This is an issue of first impression in this district.

The

prevailing view in other jurisdictions is that § 299 does not
permit such joinder.

See, e.g., MGT Gaming, Inc., 2013 WL 5755247,

at *7-8, 10; Digitech Image Techs., LLC, 2012 WL 4513805, at *3;
Omega Patents, LLC, 2012 WL 2339320, at *2.

The Court agrees with

this approach and concludes that direct competitors may not be
joined in a patent infringement action pursuant to § 299, absent
allegations of concerted action.

Logically, competitors, absent a

conspiracy, are not part of the same transaction.

For example,

where the same manufacturer sells the same accused product to two
importers who then sell to the same retailer, there are multiple
streams of commerce and multiple transactions: (1) manufacturer A
to importer A to retailer A; and (2) manufacturer A to importer B
to retailer A.

The two importers –- who are competitors -- are not

part of the “same transaction,” as demonstrated by this example.
The secondary issue before the Court is whether participants
at different levels in the same stream of commerce –- e.g.,
manufacturer A to importer A to retailer A -- are part of the same
transaction.

The Court concludes, consistently with the decisions

of other district courts, that these participants may be part of
the same transaction under § 299.

18

See, e.g., MGT Gaming, Inc.,

2013 WL 5755247, at *9; Omega Patents, LLC, 2012 WL 2339320, at *2.
However, satisfaction of the same product and same transaction
requirements of § 299 is a necessary, but not a sufficient,
precondition to joinder in a patent infringement action.
Nintendo Co., 544 Fed.Appx. at 939.

See In re

Other considerations include

judicial economy and fundamental fairness.

See id.

Also, pursuant

to Rule 21, “[o]n motion or on its own, the court may at any time,
on just terms, add or drop a party” or “sever any claim against a
party.”
Against this backdrop, the Court concludes that the competitor
defendants here are not part of the same transaction since they are
not alleged to have acted in concert.

Thus, they were improperly

joined in the same actions and the claims against them should be
severed.

These competitor defendants should not be included in the

same actions, particularly where sensitive and confidential
information about competitors will likely be revealed in discovery
in this matter.
With respect to the defendants operating in the same stream of
commerce at different levels, § 299 would permit joinder of these
defendants in one action.

However, some of defendants have agreed

to indemnify other defendants, particularly those downstream in the
stream of commerce.

Thus, in those circumstances, the indemnifying

defendant is “the real party in interest” for the purposes of the

19

patent infringement claims, and the indemnified defendant is
peripheral.

See MGT Gaming, Inc., 2013 WL 5755247, at *12.

Therefore, principles of judicial economy counsel that the claims
against the downstream defendants be severed as well and then
stayed pending the resolution of the claims against the upstream
defendants.
The Court believes that the purposes of efficiency and
judicial economy will best be served by severing the claims against
all defendants in all twelve actions from one another, not just the
claims against the moving defendants who sought severance before
the Magistrate Judge.

In this way, competitor defendants would not

be joined in violation of § 299, and the complexity of the action
would be reduced by separating upstream defendants from downstream
defendants, who will be indemnified by the upstream defendants.
The Court is cognizant that not all defendants have sought such
severance, but the Court is inclined to exercise its prerogative
under Rule 21 to sever the claims as to these non-moving defendants
as well.

The Court will issue an order to show cause why the

claims against all defendants in all twelve actions brought by
Plaintiff in this District should not be severed.
The Court further concludes that all claims against downstream
defendants who will be indemnified by upstream defendants in all
twelve actions should be stayed pending the resolution of the

20

issues as to the upstream defendants.

However, despite significant

effort, the Court is unable to discern from the pleadings the level
of commerce at which many of the defendants operate.

Thus, the

Court will refer to the Magistrate Judge the issue of which claims
against which defendants should be stayed.

The Court notes that

defendants with stayed claims are still subject to discovery,
particularly with regard to the identification of products sold and
the nature of any indemnity agreements.

The Magistrate Judge may

exercise the discretion to enter any necessary confidentiality
orders with respect to this discovery.
VI.

CONCLUSION

For these reasons, the Court will reverse the decision of the
Magistrate Judge on the motions to sever and stay.

The Court will

refer the matter to the Magistrate Judge for further proceedings to
determine which defendants are indemnitees of other defendants and
thus should have the claims against them stayed.
issue an appropriate order.

The Court will

Further, the Court will issue an order

to show cause to Plaintiff concerning why the Court should not
sever all defendants in all actions from one another into separate
actions.
s/ Mary L. Cooper
MARY L. COOPER
United States District Judge
Dated: April 30, 2014
21