Slack v. BON AQUA INTERNATIONAL, INC. et al
Filing
69
MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE L. PATRICK AULD on 5/31/2012, RECOMMENDING that Defendants' Motion to Dismiss (Docket Entry 9 ) be granted. FURTHER RECOMMENDING that Def endants' Motion for a Protective Order (Docket Entry 38 ); Defendants' Motion to Reset Summary Judgment Deadline; or, in the Alternative, for Leave to File Notice of Dispositive Motions (Docket Entry 43 ); Plaintiff's Motion for Summ ary Judgment (Docket Entry 46 ); Defendants' Motion for Summary Judgment (Docket Entry 49 ); Defendants' Motion for Relief Pursuant to Rule 56(d) (Docket Entry 51 ); and Plaintiff's Motion to Strike Portions of Declaration of Constance C. Lowenstein Under FRCP 37(c)(1) (Docket Entry 59 ) be denied as moot. (Lloyd, Donna)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
GARY G. SLACK,
Relator,
BON AQUA INTERNATIONAL, INC.,
AQUA DYNE INC.,
CONSTANCE C. LOWENSTEIN, and
GERALD H. LOWENSTEIN.
Defendants.
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1:10CV516
MEMORANDUM OPINION AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
The instant matter comes before the undersigned United States
Magistrate Judge on the following seven motions: (1) Defendants’
Motion to Dismiss (Docket Entry 9); (2) Defendants’ Motion for a
Protective Order (Docket Entry 38); (3) Defendants’ Motion to Reset
Summary Judgment Deadline; or, in the Alternative, for Leave to
File
Notice
of
Dispositive
Motions
(Docket
Entry
43);
(4) Plaintiff’s Motion for Summary Judgment (Docket Entry 46);
(5) Defendants’ Motion for Summary Judgment (Docket Entry 49);
(6) Defendants’ Motion for Relief Pursuant to Rule 56(d) (Docket
Entry 51); and (7) Plaintiff’s Motion to Strike Portions of
Declaration of Constance C. Lowenstein Under FRCP 37(c)(1) (Docket
Entry 59).1
1
Although the caption of the instant case identifies Gary G.
(continued...)
For the reasons that follow, the undersigned will recommend
that the Court grant Defendants’ Motion to Dismiss pursuant to Fed.
R. Civ. P. 12(b)(6) for failure to state a claim upon which relief
can be granted and deny all remaining pending motions as moot.2
Background
Plaintiff brought this matter as a qui tam action for false
patent marking under 35 U.S.C. § 292.
Plaintiff’s Complaint
alleges two claims: (1) that Bon Aqua International (“Bon Aqua”)
and Aqua Dyne, Inc. (“Aqua Dyne”) marked certain products and
related product packaging with expired (but previously valid)
patents in violation of 35 U.S.C. § 292(a) (see Docket Entry 1,
¶¶ 27-32); and (2) that Gerald and Constance Lowenstein, as sole
shareholders of Bon Aqua and Aqua Dyne, controlled the actions of
Bon Aqua and Aqua Dyne and thus should be held personally liable
for those false patent markings (see id. at ¶¶ 33-37).
During the pendency of this action, the Leahy-Smith America
Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) (the “AIA”),
became law.
The AIA amended 35 U.S.C. § 292 in several respects.
Those amendments included the addition of subsection (c), which
1
(...continued)
Slack as “Relator,” in all other respects the Parties’ filings
refer to Slack as “Plaintiff,” and the undersigned will do likewise
for the purposes of this Memorandum Opinion.
2
Because the undersigned recommends that the instant matter
be dismissed pursuant to Fed. R. Civ. P. 12(b)(6), the undersigned
will address all motions by way of recommendation.
-2-
states: “The marking of a product . . . with matter relating to a
patent that covered that product but has expired is not a violation
of this section.”
35 U.S.C. § 292(c).
Furthermore, the AIA
provides: “The amendments made by this subsection shall apply to
all cases, without exception, that are pending on, or commenced on
or after, the date of the enactment of this Act.”
AIA, § 16(b)(4).
In light of this amendment, the Court ordered the Parties to
file status reports addressing the effect of the AIA on the instant
action.
(See Docket Entry 66.)
Through those filings, both
Defendants and Plaintiff acknowledge that, as amended, Section 292
no longer provides a basis for Plaintiff’s claims.
(See Docket
Entry 67 at 2 (“In short, the effect of the [AIA] is as simple as
it is inescapable. . . . [S]ince Plaintiff’s false marking claim is
based solely on a cause of action that is no longer viable, the
action must be dismissed.”); Docket Entry 68 at 1 (“In effect, the
passage of the [AIA] as currently understood by the Plaintiff
removes the basis for Plaintiff’s false marking claim . . . .”).)
Plaintiff, however, offers in addition:
[P]rior to the passage of the [AIA], the present false
marking claims were valid and actionable under 35 U.S.C.
§ 292.
Therefore, [Plaintiff] submits that the
retroactive
nature
of
the
[AIA]
constitutes
a
constitutional
taking
and
is,
therefore,
unconstitutional.
See U.S. Const. art. I, § 9; U.S.
Const. amend. V.
-3-
(Docket Entry 68 at 1.)3
Motion to Dismiss
A complaint fails to state a claim if it does not “contain
sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S.
544,
570
(2007)).
On
the
instant
facts,
given
that
Plaintiff’s claims rest entirely on Defendants’ display of expired
(but previously valid) patents on certain products and related
product packaging (see Docket Entry 1), Plaintiff’s Complaint fails
to state a claim in light of the clear language of the amended
Section 292 that “[t]he marking of a product . . . with matter
relating to a patent that covered the product but has expired is
not a violation of this section,” 35 U.S.C. § 292(c).
Furthermore,
the
Court
cannot
proceed
on
Plaintiff’s
contention that the AIA amounts to an unconstitutional taking
because Plaintiff’s proper course of action is to pursue that claim
against the United States.
See Rogers v. Conair Corp., Civil
Action No. 10-1497, 2012 WL 1443905, *4 (E.D. Pa. Apr. 25, 2012)
(unpublished) (“[Plaintiff’s] proper remedy would be to seek just
compensation,
not
to
have
the
3
statute
struck
down
as
The cited excerpt from Plaintiff’s Status Report represents
the entirety of Plaintiff’s contentions on the unconstitutionality
of the AIA. (See Docket Entry 68 at 1.) Plaintiff has provided no
argument, much less authority, supporting his position. (See id.)
-4-
unconstitutional.
The Tucker Act and the Little Tucker Act permit
individuals like Plaintiff to sue the government for compensation
in the Court of Federal Claims, and takings claims ‘are premature
until the property owner has availed itself of the process provided
by the Tucker Act.’” (quoting Preseault v. I.C.C., 494 U.S. 1, 11
(1990))); Brooks v. Dunlop Mfg. Inc., No. C 10-04341 CRB, 2011 WL
6140912, *5 (N.D. Cal. Dec. 9, 2011) (unpublished) (“Because a
taking
is
not
unconstitutional
unless
it
is
uncompensated,
[Plaintiff] must seek compensation and bring his taking claim
against the United States, under either the Tucker Act or the
Little Tucker Act, and have it adjudicated on the merits before
this Court can acknowledge that an unconstitutional taking has
occurred.”).
Regardless, “[t]he Fifth Amendment’s Takings Clause prevents
the
Legislature
(and
other
government
actors)
private persons of vested property rights . . . .”
Film
Prods.,
511
U.S.
244,
266
(1994)
from
depriving
Landgraf v. USI
(emphasis
added).
“[H]owever, no ‘vested’ right attaches until there is a final,
unreviewable judgment, so it is of no moment that [Plaintiff]
expended
effort
[C]omplaint.”
2011-1495,
and
resources
in
filing
and
pursuing
the
Rogers v. Tristar Prods., Inc., Nos. 2011-1494,
2012
WL
1660604,
*2
(Fed.
Cir.
May
2,
2012)
(unpublished). “That [Plaintiff] brought a qui tam action does not
alter that conclusion.
In the analogous context of the False
-5-
Claims
Act,
courts
long
ago
rejected
the
argument
that
a
constitutional protected property right vests upon initiating
suit.”
Id.; see also Cloverleaf Golf Course, Inc. v. FMC Corp.,
No. 11-cv-190-DRH, 2012 WL 948263, *1 (S.D. Ill. Mar. 20, 2012)
(unpublished) (“[T]he retroactivity of the new § 292 is not an
impermissible deprivation of plaintiff’s vested property right
because plaintiff does not have a vested property right.”).4
Conclusion
Because
the
AIA
makes
it
clear
that
the
sole
basis
of
Plaintiff’s claims does not support a cause of action and because
any contention that the AIA amounts to an unconstitutional taking
requires Plaintiff to pursue a claim against the United States, the
instant action should be dismissed pursuant to Fed. R. Civ. P.
12(b)(6).
IT IS THEREFORE RECOMMENDED that Defendants’ Motion to Dismiss
(Docket Entry 9) be granted.
IT IS FURTHER RECOMMENDED that Defendants’ Motion for a
Protective Order (Docket Entry 38); Defendants’ Motion to Reset
Summary Judgment Deadline; or, in the Alternative, for Leave to
File Notice of Dispositive Motions (Docket Entry 43); Plaintiff’s
Motion for Summary Judgment (Docket Entry 46); Defendants’ Motion
for Summary Judgment (Docket Entry 49); Defendants’ Motion for
4
Due to the conclusion that Plaintiff fails to state a claim
upon which relief can be granted, the undersigned need not address
the remaining pending Motions.
-6-
Relief Pursuant to Rule 56(d) (Docket Entry 51); and Plaintiff’s
Motion to Strike Portions of Declaration of Constance C. Lowenstein
Under FRCP 37(c)(1) (Docket Entry 59) be denied as moot.
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
May 31, 2012
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