Glenn Family Inc v. Combex Inc

Filing 17

ORDER DISMISSING CASE signed by Judge Pamela Pepper on 9/6/2018. 8 Defendant's motion to dismiss DENIED as moot. 12 Defendant's motion to dismiss amended complaint GRANTED. Case DISMISSED without prejudice. (cc: all counsel)(cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

GLENN FAMILY, INC.,
Plaintiff,
v.

Case No. 17-cv-1173-pp

COMBEX, INC.,
Defendant.

ORDER DENYING AS MOOT DEFENDANT’S MOTION TO DISMISS (DKT.
NO. 8), GRANTING DEFENDANT’S MOTION TO DISMISS (DKT. NO. 12)
AND DISMISSING CASE WITHOUT PREJUDICE

Approximately one year ago, on August 29, 2017, the plaintiff filed a
complaint alleging three counts of patent infringement under 35 U.S.C. §271.
Dkt. No. 1. In lieu of an answer, the defendant filed a motion to dismiss the
complaint on three grounds: lack of subject-matter jurisdiction under Fed. R.
Civ. P. 12(b)(1); failure to state a claim under Fed. R. Civ. P. 12(b)(6); and
failure to join a party under Fed. R. Civ. P. 12(b)(7). Dkt. No. 8. The parties
stipulated to an extension of time for the plaintiff to respond to that motion,
dkt. no. 10, and on November 13, 2017, the plaintiff filed an amended
complaint, dkt. no. 11. In lieu of an answer to the amended complaint, the
defendant filed a motion to dismiss for lack of subject-matter jurisdiction under
Federal Rule of Civil Procedure 12(b)(1). Dkt. No. 12. The brief in support of the
motion argued that the plaintiff did not have standing to sue under the Patent
Act, 35 U.S.C. §281, because the plaintiff (Glenn Family, Inc.) had no rights to
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the license agreement for the patent in question (having allegedly assigned
those rights to another entity, Glenn Family, LLC). Dkt. No. 13 at 6. The
defendant also argued that the lawsuit could not proceed without the actual
owner of the patent. Id. at 10.
The plaintiff’s response stated that it consented to dismissal of the
complaint without prejudice; it asked, however, that if the court were not
inclined to dismiss without prejudice, the court allow it to voluntarily dismiss
without prejudice under Fed. R. Civ. P. 41(a)(2). Dkt. No. 15.
The defendant’s reply brief, emphasizing that the plaintiff had conceded
that dismissal was appropriate, asserted that the court “must decide whether
the dismissal will be with or without prejudice.” Dkt. No. 16 at 1. The
defendant did not ask the court to dismiss the complaint with prejudice; it
simply requested dismissal. The defendant argued, however, that if the court
dismissed the case without prejudice, it should “require that any new
complaint include sufficient support to determine whether the putative
plaintiffs have standing to sue.” Id. The defendant asserted that after the
plaintiff received the first motion to dismiss, it should have “thoroughly
investigated whether it had standing to sue.” Id. The defendant asserted that
the plaintiff had not conducted such an investigation before filing the amended
complaint, which “required Defendant to again move to dismiss for lack of
standing to sue.” Id. The defendant complained that the plaintiff had offered no
“substantive support” for its argument that its failure to plead standing was
the result of a drafting error, or its assertion that the owner of the patent had
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agreed to join the suit as a plaintiff. Id. at 1-2. The defendant also disputed the
plaintiff’s contention that, “as an alleged licensee, it has sufficient legal rights
to have standing to sue.” Id. at 2.
The defendant brought the second motion to dismiss under Rule 12(b)(1),
dismissal for lack of subject-matter jurisdiction. The Seventh Circuit has made
clear that dismissals under 12(b)(1) are jurisdictional dismissals and, thus, are
without prejudice. See, e.g., Lewert v. P.F. Chang’s China Bistro, Inc., 819 F.3d
963, 969 (7th Cir. 2016) (dismissal for lack of subject-matter jurisdiction is a
dismissal without prejudice); Morrison v. YTB Intern., Inc., 649 F.3d 533, 535
(7th Cir. 2011).
The defendant’s reasoning in its reply brief resembles the arguments the
defendants made to Judge Posner (sitting by designation in the Northern
District of Illinois) in DePuy, Inc. v. Zimmer Holdings, Inc., 384 F. Supp.2d
1237 (N.D. Ill. 2005). Judge Posner stated:
The defendants ask me to dismiss [the case] with prejudice
because they should not have to defend against a refiled suit
(with the subsidiary that owns the patent at last substituted for
the parent) at this late date. Such a ruling would be premature.
I do not know whether the suit will be refiled, or when. If it is
refiled and the defendants plead laches or some other basis for
dismissal with prejudice because of delay caused by the plaintiff’s
jurisdictional error, I will consider at that time the question of
whether to dismiss with prejudice.
Id. at 1240.
This court follows Judge Posner’s lead. While the plaintiff has indicated
that it plans to file a new suit, the court does not know if it will do so, or when.
If the plaintiff does file a new suit, and that complaint is defective, the
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defendant may ask the court to dismiss with prejudice if grounds exist to do
so. The defendant’s request that the court order the plaintiff’s next complaint
to comply with standing requirements is a request for an order requiring the
plaintiff to follow the law. The court sees no need for such an order; it
presumes that parties will follow the law until they demonstrate otherwise.
The court DENIES AS MOOT the defendant’s first motion to dismiss; it
was mooted by the filing of the amended complaint. Dkt. No. 8.
The court GRANTS the defendant’s motion to dismiss the case, dkt. no.
12, and ORDERS that this case is DISMISSED WITHOUT PREJUDICE.
Dated in Milwaukee, Wisconsin this 6th day of September, 2018.
BY THE COURT:
_____________________________________
HON. PAMELA PEPPER
United States District Judge

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