Samson Lift Technologies LLC v. Jerr-Dan Corporation et al

Filing 179

MEMORANDUM AND ORDER: The court finds it lacks subject matter jurisdiction in this case, as such, the case is DISMISSED without prejudice. The Clerk of Court shall close the file. Signed by Honorable Sylvia H. Rambo on 12/20/11. (ma, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
SAMSON LIFT TECHNOLOGIES,
LLC,
Plaintiff
v.

JERR-DAN CORPORATION,
Defendant

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Civ. No. 09-1590

J. RAMBO

MEMORANDUM
Background1

I.

The background of this case is as follows: This case was first transferred
to this court from the Southern District of New York in August 2009. (Doc. 1.)
Since that time, over 150 documents have been filed, including an amended
complaint, motions to dismiss, a motion for summary judgment, a motion for
sanctions, motions for reconsideration, motions in limine, and countless motions to
exceed page limitations and/or extend deadlines. Suffice it to say, the court is
intimately acquainted with the underlying facts of this case, many of which are
highly disputed. Currently, this case is scheduled to go to trial January 9, 2012.
However, the court has recently been informed that subject matter jurisdiction might
be ay issue in this case as it seems there has been confusion regarding Defendant’s
exact state of incorporation. It appears that Plaintiff’s complaint and Defendant’s
answer both erroneously named Jerr-Dan as a Pennsylvania corporation instead of a
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Because the court writes primarily for the parties, the underlying factual allegations will
not be re-hashed here. For a summary of this cases’s history, those interested may review this court’s
August 11, 2011 memorandum and order regarding summary judgment.

Delaware corporation. Because Samson is a Delaware corporation, if Jerr-Dan is
likewise incorporated there, diversity of citizenship does not exist and therefore, this
court lacks subject matter jurisdiction. However, Defendant now claims that federal
jurisdiction is proper under 28 U.S.C. § 1338 because this case invokes a substantial
question of patent law, which Congress has vested in the exclusive jurisdiction of
federal courts. For the reasons that follow, the court will decline to exercise
jurisdiction and will dismiss this case.
II.

Discussion
Jurisdiction in this case centers around what Plaintiff must prove to

establish that Defendant in fact breached the Patent Notice provision in the
underlying License Agreement. The License Agreement states that Jerr-Dan was to
inform Samson if it were to file a patent for a product which was an “Improvement”
to the side loading vehicle retriever (“SLVR”) which Jerr-Dan had contracted to
produce and market for Samson.
28 U.S.C. § 1338(a) states as follows: “The district courts shall have
original jurisdiction of any civil action arising under any Act of Congress relating to
patents, plant variety protection, copyrights and trademarks. No State court shall
have jurisdiction over any claim for relief arising under any Act of Congress relating
to patents, plant variety protection, or copyrights. . . .” 28 U.S.C. § 1338 (a). The
parties greatly dispute whether this case in fact implicates patent issues, thus
invoking federal jurisdiction, or is rather a contract case which should be properly
heard by a state court due to a lack of diversity between the parties.
The seminal case relied on by both parties on this issue is Christianson
v. Colt Industries Operating Corporation, in which the Supreme Court explains what
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it means for a case to “arise under” the federal patent statute thus invoking District
Court jurisdiction. 486 U.S. 800, 807 (1988). As the Supreme Court explained, “[a]
district court’s federal-question jurisdiction . . . extends over ‘only those cases in
which a well-pleaded complaint establishes either that federal law creates the cause
of action or that the plaintiff’s right to relief necessarily depends on resolution of a
substantial question of federal law . . . .’” Id. at 808 (quoting Franchise Tax Board
of Ca. v. Construction Laborers Vacation Trust, 463 U.S. 1, 27-28 (1983)).
Furthermore, Ҥ 1338 jurisdiction likewise extend[s] only to those cases in which a
well-pleaded complaint establishes either that federal patent law creates the cause of
action or that the plaintiff’s right to relief necessarily depends on resolution of a
substantial question of federal patent law, in that patent law is a necessary elements
of one of the well-pleaded claims.” Id. at 809. A court when analyzing whether a
claim arises under patent law must focus on the complaint and not on any anticipated
defenses upon which a defendant might rely. Id. (explaining, “[t]hus, a case raising a
federal patent-law defense does not, for that reason alone, ‘arise under’ patent law,
‘even if the defense is anticipated in the plaintiff’s complaint, and even if both
parties admit that the defense is the only question truly at issue in the case.’”)
In addition, patent-law jurisdiction is not invoked if a plaintiff may rely
on alternative means of seeking recovery in a case. “[I]f ‘on the face of a wellpleaded complaint there are . . . reasons completely unrelated to the provisions and
purposes of the patent laws why the plaintiff may or may not be entitled ro the relief
it seeks . . . then the claim does not arise under those laws . . . . Thus, a claim
supported by alternative theories in the complaint may not form the bases for §
1338(a) jurisdiction unless patent law is essential to each of those theories.’” Id. at
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810 (internal citations omitted). As such, “[t]he well-pleaded complaint rule . . .
focuses on claims, not theories . . . and just because an element that is essential to a
particular theory might be governed by federal patent law does not mean that the
entire [underlying] claim ‘arises under’ patent law.” Id. at 811 (referencing
Franchise Tax Board, supra) (internal citations omitted).
In light of this Supreme Court language, the court here finds that federal
patent-law jurisdiction is not proper. The court understands Defendant’s urge to find
that this court has jurisdiction. As mentioned above, this court has dealt with
multiple filings in this case and there are clear issues of material fact which must be
decided. There is an admitted curiosity by the court to see how a trial in this case
might play out. However, curiosity is what led to the demise of the proverbial cat,
and the court believes proceeding to trial would lead to the same result regarding this
court’s proper jurisdiction. Patent law considerations in this case appear to be
secondary to the clearly alleged contract disputes. Although the complaint does
allege that Defendant failed to give proper notice to Plaintiff when it filed its
Provisional Patent Application Number 60/741,152, this is only one theory of
recovery alleged by Plaintiff. Plaintiff also claims that Defendant fraudulently
induced Plaintiff to enter in to a contract and breached the contract by failing to
properly manufacture and market the SLVR. (Compl. Claims I, III, and IV.)
Plaintiff makes no explicit patent infringement claims, and, given the Supreme
Court’s language in Christianson, the court does not feel comfortable reading patent
law issues into the complaint.2 In Plaintiff’s response to the jurisdictional matter
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The court understands Jerr-Dan’s reliance on Scherbatskoy v. Halliburton Co., 125 F.3d
288 (5th Cir. 1997), and agrees that at first glance the language in that case supports Defendant’s
(continued...)
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they state that Defendant “has produced no evidence that it tried to find out whether
its application contained ‘Improvements’ prior to filing the application without
notice. Samson’s Complaint alleges that, standing alone, this constitutes a breach of
the contract.” (Pl. Samson’s Counterstatement Regarding Jurisdiction, at p. 7.) If
this is the only evidence Samson claims to need to prevail on this theory of its case,
no specific patent issues need be addressed and federal question jurisdiction would
not be invoked. The court is well aware that Samson may attempt to litigate the case
in such a manner that would require a court to determine whether or not Jerr-Dan’s
patent in fact was an “Improvement” on the SLVR, but the court is not willing to
invoke jurisdiction based on foreshadowing of what might occur at trial.

The time and resources spent on this case thus far have been vast,
however, the court simply cannot create jurisdiction where none exists. (See
Christianson, supra, at 818 (explaining “that a court may not in any case, even in the
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(...continued)
position. However, the Federal Circuit, when deciding the appeal in that case declined to address the
merits of the jurisdictional issue and instead followed the “law of the case” doctrine and found that the
Fifth Circuit’s decision to transfer the case to the Federal Circuit was not “implausible or clearly
erroneous.” Scherbatskay v. Halliburton Co., 1999 WL 13377, at *4 (Fed. Cir. 1999). The court is not
willing to ignore Supreme Court precedent based on a non-binding decision out of the Fifth Circuit
which the Federal Circuit found to be merely not “erroneous.”
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interest of justice, extend jurisdiction where none exists . . . . Parties often spend
years litigating claims only to learn that their efforts and expense were wasted on a
court that lacked jurisdiction.”) As such, this case will be dismissed.3

s/Sylvia H. Rambo
United States District Judge
Dated: December 20, 2011.

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Plaintiff request the court to impose sanction on Defendant for its actions. As this court
has previously explained, the court’s inherent power to sanction must be used “with restraint and
caution.” (See Doc. 170, Order on Pl.’s Mot. for Sanctions, at 5 (citing In re Prudential Ins. Co. Am.
Sales Practice Litig. Agent Actions, 278 F.3d 175, 189 (3d Cir. 2002)). Moreover, the court’s inherent
power to impose sanctions when a party in a case “has acted in bad faith, vexatiously, wantonly, or for
oppressive reasons . . . .” Id. Although the oversight regarding the proper place of incorporation of
Defendant in this case is huge, the court does not believe it was done purposefully or in bad faith. As
such, the court will not exercise its inherent right to impose sanctions on Defendant.
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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
SAMSON LIFT TECHNOLOGIES,
LLC,
Plaintiff
v.

JERR-DAN CORPORATION,
Defendant

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Civ. No. 09-1590

J. RAMBO

ORDER
In accordance with the accompanying memorandum of law, the court
finds it lacks subject matter jurisdiction in this case, as such, the case is
DISMISSED without prejudice. The Clerk of Court shall close the file.

s/Sylvia H. Rambo
United States District Judge
Dated: December 20, 2011.

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