Free Reply Brief - District Court of Delaware - Delaware

Case 1:06-cv-00785-GMS

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EXHIBIT A

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Case 1:06-cv-00785-GMS Case 2:06-cv-00345-DF

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION § § § § Plaintiff, § § CIVIL ACTION NO. 2:06-CV-345-DF v. § § DENSO CORPORATION, REMY INTERNATIONAL, INC., and VALEO, § § INC., § § Defendants. ORDER Before the Court is Plaintiff's Motion for Leave to File Second Amended Complaint. Dkt. No. 44. Also before the Court is Defendant's response, Plaintiff's reply, and Defendant's sur-reply. Dkt. No. 47, 51 & 53. The Court held a hearing on May 21, 2007, at which the Court requested supplemental briefing. The parties have each filed a supplemental brief. Dkt. Nos. 56 & 57. Having considered the briefing and all relevant papers and pleadings, the Court finds that Plaintiff's Motion for Leave to File Second Amended Complaint should be GRANTED. The Court further finds that the present action should be STAYED. I. BACKGROUND Plaintiff filed suit on August 30, 2006 alleging infringement of United States Patent No. 4,733,159 (the "'159 Patent"). Complaint, Dkt. No. 1. Plaintiff named Denso Corporation and Valeo, Inc. as defendants, with whom Plaintiff has settled. Dkt. Nos. 19 & 42. Plaintiff filed its First Amended Complaint on October 20, 2006, which added Valeo Sistemas Electricos S.A. de CIF LICENSING, LLC, d/b/a GE LICENSING,

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C.V. as a defendant, with whom Plaintiff has also settled. Dkt. No. 12 & 42. Plaintiff's Complaint and First Amended Complaint both name "Remy" as a defendant, and Plaintiff served defendant Remy International, Inc. ("Defendant"). See Dkt. Nos. 1, 5 & 12. Defendant is the only remaining defendant in the present suit. Remy Inc., a subsidiary of Defendant, together with other subsidiaries, filed a declaratory judgment action in the District of Delaware on December 21, 2006 (the "Delaware Action"). D. Del., Civil Action No. 1:06-CV-785, Dkt. No. 1. Defendant has filed a Motion to Dismiss for Want of Personal Jurisdiction. Dkt. No. 24. By its response filed on April 30, 2007, Plaintiff seeks leave to file a Second Amended Complaint. Dkt. No. 44. Plaintiff is "prepared to consent to the relief requested by [Defendant] . . . conditioned on the Court granting [Plaintiff] leave to name the correct Remy entity as a defendant in this case." Id. at 1. II. THE PARTIES' POSITIONS Plaintiff concedes that Remy International is the "wrong party" and seeks leave to file a Second Amended Complaint that names Remy, Inc., the "correct Remy entity," as a defendant. Dkt. No. 44 at 1. Remy Inc. is a wholly owned subsidiary of Remy International. Id. at 2; see also id. at Ex. C; Dkt. Nos. 24 at 1 & 47 at 1-2. Defendant argues that Plaintiff's amendment would be futile because the District of Delaware is the "first-filed" court as to Remy Inc. Dkt. No. 47 at 8-10. Defendant thus submits that a stay or a transfer to the District of Delaware would be appropriate if the Court grants leave for Plaintiff to amend. Id. at 3. Defendant argues that granting Plaintiff's motion for leave to amend would prejudice Defendant by subjecting it to "dual patent litigation simultaneously -2-

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proceeding in two forums, while this Court may not have personal jurisdiction over some of the necessary parties (the supplier indemnitors)." Id. at 11. In the alternative, Defendant seeks a stay of the present action pending reexamination of the '159 Patent in the United States Patent and Trademark Office. Id. at 12-15. Plaintiff replies that the present action should be deemed "first-filed" upon amendment because Rule 15(c) provides for relation back. Dkt. No. 51 at 2 (citing Schiavone v. Fortune, 477 U.S. 21, 29 (1986), Aerotel, Ltd. v. Sprint Corp., 100 F. Supp. 2d 189 (S.D.N.Y. 2000), NutriHealth Supplements, LLC v. Block Drug Co., 2007 WL 38159 (D. Ariz. 2007) & Optima, Inc. v. Republic Indus., Inc., 1995 WL 72430 (E.D. La. 1995)). Plaintiff also argues that a stay pending reexamination of the '159 Patent is inappropriate. Id. at 4 (citing Soverain Software LLC v. Amazon.com, 356 F. Supp. 2d 660, 663 (E.D. Tex. 2005)). In sur-reply, Defendant argues that Plaintiff fails to satisfy any of the Foman factors. Dkt. No. 53 at 2-3 (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). Alternatively, Defendant argues that if the Court grants leave to amend, then justice and judicial economy favor a stay. Id. at 3. Defendant also argues that "the relation back doctrine does not establish this as the first filed case . . . ." Id. at 5. In supplemental briefing, Plaintiff argues that its assertion of counterclaims in the Delaware Action is irrelevant because Plaintiff was "required [Plaintiff] to include all compulsory counterclaims pursuant to Rule 13(a)." Dkt. No. 56 at 3. Plaintiff argues that "at the time [Plaintiff] answered [in the Delaware Action], a motion based on the first-filed rule in Delaware would have been premature because [Plaintiff] could not at that time represent that the correct parties were defendants in Texas." Id. at 4. Plaintiff submits Ballard Medical Products -3-

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v. Concord Labs, Inc. as authority that counterclaims in the Delaware Action should not affect this Court's analysis of Plaintiff's motion. Id. at 3 (discussing 700 F. Supp. 796 (D. Del. 1988)). In its supplemental brief, Defendant submits that neither party "[has] been able to find any case discussing this exact set of procedural circumstances." Dkt. No. 57 at 3. Defendant argues that Plaintiff fails to show prejudice. Dkt. No. 57 at 4-5. Defendant also argues that "Delaware is currently the only forum in which this action is effectively proceeding . . . ." Id. at 4. Defendant submits Orthmann v. Apple River Campground, Inc., which Defendant characterizes as containing applicable principles of federal comity. 765 F.2d 119 (8th Cir. 1985). In the alternative, Defendant argues that "[i]f leave to amend is granted, a stay and or transfer will continue to be appropriate because GE's first-to-file argument will be swallowed by the interests of justice and judicial economy." Id. at 8. Defendant argues that Ballard is inapplicable because that court did not address a motion to amend. Id. at 10. III. DISCUSSION Under Federal Rule of Civil Procedure ("Rule") 15(a), "leave [to amend] shall be freely given when justice so requires." Fed. R. Civ. P. 15(a); see also Foman, 371 U.S. at 182. The Court's present Scheduling Order sets an April 7, 2008 deadline for amendment of pleadings without leave of Court. Dkt. No. 58 at 2. The Court is nonetheless mindful of the interest of comity between federal district courts. For this reason, the parties submitted supplemental briefing. The Court finds that the assertion of counterclaims in the Delaware Action does not affect this Court's analysis of Plaintiff's motion for leave to amend its complaint. Plaintiff's motion for leave to amend should be GRANTED. The Court further STAYS the present action pending further action by the Delaware -4-

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court. The Court need not resolve the "first filed" issue in order to grant Plaintiff's motion for leave to amend. The Court expressly leaves the "first filed" issue for the Delaware court to resolve if properly presented. Also, the Court is not inclined to grant an unconditional stay pending reexamination of the '159 Patent. See Soverain Software, 356 F. Supp. 2d 660, 663 (finding that "staying the case, based solely on speculation of what might possibly happen during reexamination, would be inefficient and inappropriate"); see also Antor Media Corp. v. Motorola, Inc., Civil Action No. 5:06-CV-240, Dkt. No. 53, entered Feb. 23, 2007 (denying unconditional stay and discussing conditional stay in Antor Media Corp. v. Nokia, Inc., Civil Action No. 2:05-cv-186, Dkt. No. 410). IV. CONCLUSION Plaintiff's Motion for Leave to File Second Amended Complaint (Dkt. No. 44) is hereby

. GRANTED. Plaintiff shall have leave to re-file its proposed Second Amended Complaint on the
Court's electronic docket. It is further ORDERED that the present case is STAYED pending further action by the Delaware court.

SIGNED this 2nd day of July, 2007.

____________________________________ DAVID FOLSOM UNITED STATES DISTRICT JUDGE

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Texas District & County Courts
TX District & County - Dallas (District Only) (Dallas 134th District Court)

DC-06-11257 STMICROELECTRONICS INC vs. WELLS MANUFACTURING CORPORATION, et al
This case was retrieved from the court on Monday, August 06, 2007

Header
Case Number: Date Filed: Date Full Case Retrieved: Misc: DC-06-11257 11/01/2006 08/06/2007 (235) Other (Civil); District Civil

[Summary][Participants][Proceedings][Dispositions][Payments]
Summary

No Information is Available for this case
Participants
Litigant Stmicroelectronics Inc Plaintiff Kimball Electronics, Inc. Defendant Kimball International, Inc. Defendant Wells Manufacturing Corporation Defendant Wetherill Associates,Inc., Defendant Rickman, Robert L Defendant Sessions, William Lewis Defendant Attorney Craddock, Thomas W Plaintiff

Proceedings
Date 11/01/2006 Details Citation Kimball International, Inc. Unserved Kimball Electronics, Inc. Served 11/07/2006 11/01/2006 Citation Sos/Coi/Coh/Hag Sos Wells Manufacturing Corporation Served 11/03/2006

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CaseCitation 1:06-cv-00785-GMS Issue
Issue Citation Comm of Ins or Sos Original Petition (Oca) Citation Sos/Coi/Coh/Hag Issued by Carroll Jones

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Kimball International, Inc. Served 11/09/2006 11/07/2006 12/04/2006 12/04/2006 12/11/2006 01/04/2007 01/05/2007 01/08/2007 01/08/2007 01/11/2007 01/31/2007 03/26/2007 03/27/2007 04/05/2007 04/05/2007 04/09/2007 Issue Citation Comm of Ins or Sos Original Answer - General Denial Original Answer - General Denial Miscellanous Event Ret Cit Sos-Kimball International Rule 11 Objection Pltf-Crt/Appt/Mediator Amended Petition 2nd Amd Pet Issue Citation Second Amended Citation Wetherill Associates,Inc., Unserved Rule 11 Plea to Jurisdiction Dfts-M/Dism/Lack Subject Matter Jurisdiction Plea to Jurisdiction Dfts-Suppl/M/Dism/Lack Subject Matter Jurisdicition Miscellanous Event Unopposed M/Requesting Permission to Participate Intexas Proceedings Response Pltf-To The Plea to The Jurisdiction & M/Dismiss For Lack of Subject Matter Order - Misc. Requesting Permission to Participate in TX Proceeding Non-Resident Atty-Michael Gannon Vol./Book 376G, Page 420, 1 Pages 04/09/2007 06/07/2007 06/07/2007 06/08/2007 06/08/2007 Plea to Jurisdiction (10:00 AM) (Judicial Officer ASHBY, ANNE) Defts-M/Dism/Lack/Subject Matter Jurisdiction-30m Affidavit Notice of Nonsuit Solely With Respect to Wetherill Associates, Inc. Note - Clerks Copy Craddock Order - Nonsuit Wetherrill Associates Vol./Book 377G, Page 180, 1 Pages 06/18/2007 07/18/2007 07/20/2007 07/20/2007 07/20/2007 Order - Mediation Vol./Book 377G, Page 489, 2 Pages Rule 11 Jury Demand (Oca) Vol./Book J23, Page 490, 1 Pages Miscellanous Event Dfts-M/Stay Order - Partial Dismissal Pltf-& Plea Jurisdiction as to Defts-Kimball International Inc & Kimball Electronics Inc Only Vol./Book 379G, Page 18, 2 Pages

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Case 1:06-cv-00785-GMS Officer ASHBY, ANNE) Document 54-4 Non Jury Trial (9:00 AM) (Judicial
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Dispositions

No Information is Available for this case
Payments
Date Details Defendant Wells Manufacturing Corporation Total Financial Assessment Total Payments and Credits Balance Due as of 08/06/2007 07/23/2007 07/23/2007 Transaction Assessment Payment (Case Fees), Receipt # 40759-2007-DCLK, Sessions Lambert Selwyn Llp Plaintiff Stmicroelectronics Inc Total Financial Assessment Total Payments and Credits Balance Due as of 08/06/2007 11/01/2006 11/01/2006 11/01/2006 11/07/2006 11/07/2006 01/08/2007 01/08/2007 Transaction Assessment Transaction Assessment Payment (Case Fees), Receipt # 65143-2006-DCLK, Mcguired Craddock & Strother PC Transaction Assessment Payment (Case Fees), Receipt # 66448-2006-DCLK, Mcguire Craddock & Strother PC Transaction Assessment Payment (Case Fees), Receipt # 1006-2007-DCLK, Mcguire Craddock & Strother PC 265.00 265.00 0.00 217.00 28.00 (245.00) 12.00 (12.00) 8.00 (8.00) 30.00 30.00 0.00 30.00 (30.00) Amount

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