Free Response to Motion - District Court of Colorado - Colorado

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 1 of 17

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-cv-617-LTB-BNB POLYROCK TECHNOLOGIES, LLC, a Colorado limited liability company, Plaintiff, v. GENERAL STEEL DOMESTIC SALES, LLC, et al. Defendants. P A N IFS OPPOSITION TO CERTAIN L I TF ' DEFENDANTS' MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 41(b) H p g t cp az o p i i P l oksr et r o e f ac lpol s oi o aile n ln f oy c' e n y e l d i ni rb m , n ti a tf R c l sv n a e defendants General Steel, Genstone and Jeff Knight request dismissal with prejudice of this action under Rule 41(b) on the asserted ground of failure to prosecute. D f dn ' o o f l e nat m t n as e s i i for several reasons. First, defendants confuse the applicable procedural rules and thereby seek relief to which they cannot possibly show entitlement. Rule 4(m), not Rule 41(b), governs whether dismissal is apor t fr dl i e et gsri .P l oks i ni pol sw i t pr i prpie o a e y n f cn e c o R c' f ac l rb m , h h e oa l a a f i ve y n a e c m ry prevented it from pursuing its claims, constituted good cause for an extension of time to effect sri udr u 4 Moevrcn a t df dn ' ot t n t C ut discretion e c ne R l . r e ot r o e nat cn n o,h orhad ve e o , ry e s ei e under Rule 4(m) to allow an extension of time to effect service even if good cause were not shown. Because a dismissal wt u pe d e f o R c'c i s i ot r ui o P l oks lm would merely have resulted h j c y a in a refiling of this action, the Court was well within its discretion to allow an extension of time

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 2 of 17

for PolyRock to effect service even in the absence of good cause for the delay.D f dn ' e nat e s motion fails for these reasons alone. Second, Rule 4(m) expressly provides only for dismissal without prejudice in the event that a case is dismissed for failing to timely complete service. Even if defendants were entitled to dismissal based upon the delay in service, they could not receive dismissal with prejudice. D f dn ' e nat motion fails for this reason as well. e s Finally, vniR l 4() rh C ut i e n d m s l o e cu properly be ee f u 1b o t ors n r t i i a pw r ol e e ' he s s d invoked for a failure to timely complete service, defendants fail to make the showing required to obtain dismissal for failure to prosecute. Whether the moving party has suffered any prejudice must be considered in evaluating a motion to dismiss for failure to prosecute. Defendants conclusorily claim prejudice from the delay in serving the complaint but provide inadequate supporting explanation or detail. Moevrdf dn ' w m v gppr so t tbt r e e nat o n oi ae hw h , o o , e s n s a h bfr ada e P l okfe si t yw r o nteo P l oks o p i s e e n f r o R c id u ,h o t y l t e e n o c f oy c' cm ln about and e i R at demands to cease their infringing activities. Defendants cannot credibly claim, as they do, to have made important business decisions while under the misimpression that PolyRock did not object to their infringing activities. Defendants likewise fail to show that PolyRock interfered in a culpable manner with the litigation process, another of the elements that the Court must consider in evaluating a motion to dismiss for failure to prosecute. The claimed culpable interference ­consisting of an alleged cnlt e ens t ett t ln fs counsel made ofcbt e te n h p i i' i w a m s a a tf to the Court and statements made to defendants' counsel ­ imaginary; the statements reconcile is and do not suggest, as defendants claim, any effort to mislead.

2

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 3 of 17

For all of these reasons, as further detailed below, the Court should deny defendat n' s motion to dismiss. BACKGROUND 1. This is an action to protect the intellectual property rights of plaintiff PolyRock T cnl i , L aa s df dn ' i prpii adi r gm n PolyRock is the eho g s L C gi t e nat m s por t n n n i e et oe n e s a ao fn . owner of patented and proprietary technology (including United States Patent No. 6,607,683, entitled Methods and Apparatus for Manufacturing Articles With Natural Characteristics) ( rpiayT cnl y)for the manufacture of molded polyurethane siding or building " or t P e r eho g" o panels that realistically replicate, at significantly reduced cost, many of the desirable characteristics, including appearance, color and texture, of stone, brick and other natural building materials. Use of the Proprietary Technology enables production, through a simple and

economical process, of manufactured materials that are less expensive and weigh much less than an equivalent quantity of natural stone products. The lightweight, easily-installed panels

manufactured using the Proprietary Technology do not require a skilled brick or stone-mason to install, but instead can be installed by a person having basic carpentry skills and standard carpentry tools. PolyRock licenses its Proprietary Technology to a number of individuals and companies whose products manufactured under license have generated significant interest in the marketplace for both exterior and interior uses in the construction and decoration of buildings. 2. Defendant General Steel sells steel buildings commonly used for commercial or storage purposes. Prior to their invo e et i P l oks r eesr i i e s G nr l m n wt oy c' pe cs sn n r t ee l v h R d o te , a Steel and the other defendants did not manufacture or sell artificial stone or brick products. In 2002, responding to pressure from municipal and other governmental authorities to improve the

3

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 4 of 17

exterior appearance of its steel buildings, General Steel sought to offer the option to add lightweight synthetic stone or brick facings to them. In preparation for negotiations concerning a possible license, General Steel undertook in writing to hold in strict confidence proprietary i om t nd c sdb P l okspeeesr n t uesc i om t nslyfr h n r ao i l e y o R c' r cs ad o s uh n r ao o l o t f i so y d o f i e e purpose of evaluating whether to enter into a business relationship. P l okspeeesr oy c' r cs R d o subsequently disclosed confidential information concerning the Proprietary Technology and other proprietary business information to General Steel and its representatives. General Steel then made unilateral proposals to PolyRock and its predecessor for a licensing arrangement, on a take-it or leave-it basis. 3. G nr Sel uit a pooa did not lead to an agreed-upon licensing ee l t ' n a r rpsl a e s le l s arrangement. Whn o R c'peeesr tm t t ngttt t m t t ee l t l e P l oks r cs ae p d o eo a h e sh G nr Se y d o t e ie e r a a e sought to impose, G nr Seleet l t et e t tf oy oks r ee l t r a dy h a nd h iP l c' pe a e p e r e a R decessor (and later PolyRock) did not agree to the business terms demanded, General Steel would utilize P l oks rcs som nf t e rdc wt u a license. Unfortunately, General Steel o R c' poes t aua u pout i ot y e cr s h made good on its threats. Having learned confidential aspects of the Proprietary Technology, General Steel, with the participation and assistance of the other defendants, commenced the commercial manufacture and distribution of products based upon such confidential information. General Steel also used, without at r ao o cnetm ren m t isht oy oks u oi t n r osn a t g a r lt P l c' h zi , ki ea a R predecessor prepared to sell its own products manufactured using the Proprietary Technology. PolyRock has also learned of a likelihood that General Steel disclosed the Proprietary Technology to others, also in violation of its contractual undertakings and legal obligations.

4

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 5 of 17

4. PolyRock filed its original Complaint in this action on March 29, 2004 based upon information, belief and evidence supporting the matters described above in Paragraphs 1 - 3. 5. At the time PolyRock filed suit it was not yet receiving substantial royalty income from licenses of its Proprietary Technology, but anticipated receipt of such income in the near future. At the time PolyRock filed suit it also believed that an individual with whom it had been having discussions would make a substantial investment in the company in the near future. (Decl. of C. Reim ¶¶ 4-5, att. hereto as Ex. 1.) 6. Unfortunately, the royalty income did not materialize as quickly as PolyRock anticipated and the investor decided not to contribute funds. As a result, PolyRock found itself without sufficient funds to pay the legal expenses necessary to prosecute its claims. (Decl. of C. Reim ¶¶ 4-6.) For these reasons, PolyRock did not immediately serve defendants with the summons and complaint herein. 7. In March and April 2005, PolyRock announced and then commenced a private stock placement in order to raise additional funds. Subscriptions to and funds received in connection with that offering have placed PolyRock in a sufficiently sound financial position ­for the first time since filing this case ­ pursue its claims. (Decl. of C. Reim ¶¶ 7-8.) to 8. On March 29, 2005, nt g httper f m t C ut fehte i hd o o n t iapa d r h orsi t sr c a nt i a e o e ' l a ve been completed on defendants, the Court ordered PolyRock to show cause why this action should not be dismissed without prejudice under Fed. R. Civ. P. 4(m). On April 14, PolyRock responded to the Order to Show Cause and advised the Court of the financial problems, discussed above, that had delayed it in pursuing its claims. PolyRock further advised the Court

5

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 6 of 17

that its financial problems had recently been alleviated and that it anticipated filing and serving an Amended Complaint within 30 days. 9. On May 9, 2005, PolyRock served the summons and complaint on moving defendants General Steel, Genstone and Knight. Also onMa 9 at C ut d et n PolyRock filed a y ,th ors i co, e ' r i status report in which it advised that it had filed an Amended Complaint on May 6, completed service on all but one of the defendants, and was attempting service on the last, an individual residing out of state. 10. On May 11, the Court, based upon the information reported in P l oksMay 9 oy c' R Status Report, discharged the March 29 Order to Show Cause. 11. On May 31, defendants General Steel, Genstone Enterprises and Jeff Knight filed the instant motion to dismiss as well as a companion motion to expedite discovery and leave to supplement, to which PolyRock has separately responded. ARGUMENT In support of their motion to dismiss, defendants rely upon Fed. R. Civ. P. 4(m) and 41(b) a w la cs l r on i a orsne n at ry om ng i dceb d m s n s e s aea e gin C ut i r tu oi t aaet okt y i i i l w c zg ' he h t s s sg cases for failure to prosecute. The rules and case law that defendants rely upon cannot support the reus dd m s l i pe d e f ln fs lm .U dr u 4m , h hap e t qet i i a wt r ui o p i i' c i s ne R l ( )w i plso e s s h j c a tf a e c i the question of timely service at issue in this case, the Court properly exercised its discretion to et dp i i' t e osre e nat B t vnid m ssal were appropriate under Rule x n ln fsi t e df dn . u ee f i i e a tf m v e s s 4(m), it would be without prejudice, not with prejudice as defendants request. Rule 41(b) and t C ut i e n d m s l o e d nt dr sut e sri bt nt dap in h ors n r t i i a pw r o o ade n m l e c u i e pl e ' he s s s i y ve sa y situations, not present here, in which the alleged failure to prosecute arises after service of the

6

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 7 of 17

complaint. E e iR l 4() rh C ut i e n d m s l o e w r ap cb hr vn f u 1b o t ors n r t i i a pw r e plal e , e e ' he s s e i e e defendants fail to make the showing required to obtain dismissal for failure to prosecute. Defendantsm t no i i t r oe as the Court should deny it. ' o o td m s h e rf land i s s ef i I. THE COURT PROPERLY ALLOWED POLYROCK ADDITIONAL TIME TO EFFECT SERVICE. Rule 4(m) permits the Court in its discretion to extend the time for service, with or without a showing of good cause. The Tenth Circuit has described Rule 4(m) as follows: The preliminary inquiry to be made under Rule 4(m) is whether the plaintiff has so ngo cuefr h f l et t e e et e i .... I go cuei hw od as o t au o i l f c sr c e ir m y f ve f od as s shown, the plaintiff is entitled to a mandatory extension of time. If the plaintiff fails to show good cause, the district court must still consider whether a permissive extension of time may be warranted. At that point the district court may in its discretion either dismiss the case without prejudice or extend the time for service. Scott v. Hern, 216 F.3d 897, 912 (10th Cir. 2000) (quoting Espinoza v. United States, 52 F.3d 838, 840 (10th Cir. 1995)). The Tenth Circuit thus recognizes that Rule 4(m) entitles plaintiff to additional time to effect service where good cause is shown for the delay and also permits the Court to exercise its discretion to permit additional time for service where good cause for the delay is not shown. Even where warranted, dismissal for failure to timely effect service must be without prejudice. Scott, 216 F.3d at 912; infra at 10. A a i tl ae go cuespot t C ut ao ac o ad i a t e o s n n i m tr od as upr d h ors l w ne f dio li fr ia t, e e ' l tn m P l okt e et e i . P l oks hwn t ti ni cnt i s r et i fr o R c o f c sr c oy c' so i h f ac l osa t pe n d t o a y f ve R g a n a rn v e , period of time, from pursuing its claims, constituted good cause for its delay in serving df dn . h dl w s u t c cm t cs u i o P l oks ot ln,s i usd e nat T e e y a deo i u s ne otd f oy c'cn o ada d cs e s a r a se R r s e in more detail below, defendants suffered no prejudice from the delay. See Gambino v. Village of Oakbrook, 164 F.R.D. 271, 274 (M.D. Fla. 1995) (good cause to extend time for service

7

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 8 of 17

shown where " c rotd a ln fs ot lcue dl )Sallis v. Kubik, No. C01-2022 f t s u i p i i'cn o asd e y; ao s e a tf r" a MJM, 2001 WL 34008736, at *1 (N.D. Iowa Nov. 12, 2001) (denying motion to dismiss under R l 4m w e dl i sri r u e f m p i i' f ac l rb m addf dn u ( ) hr e y n e c e ld r e e a v e s t o ln fs i ni pol s n e nat a tf n a e e failed to show prejudice) (unpublished opinion att. hereto as Ex. 2). E e i P l oksso i o t r sn fr t d vn f o R c' hwn f h e os o i elay in effecting service did not y g e a s constitute good cause for an extension, the Court nonetheless had discretion to extend P l oksi eo o p tsri . e nate i t icn n o t tod as m sb o R c't t cm le e c D f dn r n h r ot t n h go cue ut e y m e ve e s r e ei a shown to extend the time for service under Rule 4. The cases that defendants rely upon concerning Rule 4 were decided under an obsolete version of the rule and have no application here. D f dn ' ae construed former Rule 4(j), which did not include the discretionary e nat css e s language of the current Rule 4(m) permitting the Court to extend the time for service even in the absence of a showing of good cause for the delay. See Reynolds v. Fed. Crop Ins. Corp., 752 F.Supp. 986, 988 (D. Colo. 1990) (court may only extend time for service under Rule 4(j) upon a showing of good cause); C r o vN t P t l m Ic 135 F.R.D. 193, 194 (D. Colo. 1991) al n . a l e o u ,n. s ' re , (same). The 1993 amendments to Rule 4 renumbered Rule 4(j) to become Rule 4(m) and added the poio t th C ut a odr t te i b e et wt n seie t e wt n rv i h t orm y re " asr c e f c d i i a pc i i , i o sn a e h ve f e h fd m " h corresponding requirement of good cause, thus permitting the Court in its discretion to grant an extension of time to effect service even where good cause for the delay has not been shown. See Fed. R. Civ. P. 4(m), Advisory Committee Note (1993) (newly renumbered Rule 4(m) "u oi st cutt r i eap i i o t cneune o a ap ct n o t s at r e h or o ee h z e lv ln f f h osqecs f n plao f h a tf e i i i

8

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 9 of 17

subdivision [concerning dismissal if service is not effected within 120 days] even if there is no good cause shown"o t dl )e paiadd. frh e y ( hs de) e a m s The 1993 amendment to Rule 4 thus reflects judicial and policy preferences for resolving cases on their merits. See, e.g., United States v. Berney, 713 F.2d 568, 571 (10th Cir. 1983) (sound policy favors adjudication of claims on their merits); Shavey v. Burlington N. Santa Fe R. Co., No. Civ. A. 03-2241-CM, 2004 WL 957893, at *1 (D. Kan. March 24, 2002) (granting extension of time to effect service under rule 4(m) because the court preferred to resolve cases on their merits rather than a technicality) (unpublished opinion att. hereto as Ex. 3). As discussed above, the courts recognize, consistent with the Advisory Committee Note, that Rule 4(m) permits a discretionary extension of time for service without a showing of good cause. Scott, 216 F.3d at 912; United States v. 2,164 Watches, More or Less, Bearing a Registered Trademark of Guess?, Inc., 366 F.3d 767, 772 (t Cr 04 ( vnwt u aso i o go cue a 9 i20) " e i ot hwn f od as, h e h g district court may utilize its broad discretio t et dt t efr e i " (internal quotes n o x n h i o sr c ) e em ve omitted). Th C ut d ca eo i O droS o C ue allowing PolyRock an extension of e ors i hr ft re t hw as, ' s g s time to complete service, was a proper ee i o t C ut d c t n vn n h asne f xr s fh ors i r i ee i t bec o a ce e ' s eo e showing of good cause. Where, as here, PolyRock would simply refile its claims in the event of a dismissal without prejudice, the Court was well within its discretion to avoid the needless complication and permit PolyRock additional time to complete service. See, e.g., Edward Kraemer & Sons, Inc. v. City of Kansas City, No. Civ. A. 94-2215, 1994 WL 728214, at *2 (D. Kan. Dec. 13, 1994) (court declined to dismiss under Rule 4 where doing so would be "o ts i t t ln fcu i m d tyr i i c i s (unpublished opinion att. hereto pi l s n h p i i ol m eie e l t lm ) ne " a a tf d a l fe s a

9

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 10 of 17

as Ex. 4). Defendants do not contend otherwise and their motion to dismiss fails for this reason as well. II. R L 4M) T E O L R L A P I A L T D F N A T 'MO I N UE ( , H N Y U E P LC B E O E E D N S TO , DOES NOT PERMIT DISMISSAL WITH PREJUDICE. Even if defendants had made an adequate showing that dismissal is required under Rule 4(m), the rule, at most, permits dismissal without prejudice. See Fed. R. Civ. P. 4(m) (providing t th C ut a "i i t at nwt u pe d e a aa s df dn nt h t or m y d m s h co i ot r ui " s gi t e nat o timely a e s s e i h j c n e s served); Scott, 216 F.3d at 912; Bann v. Ingram Micro, Inc., 108 F.3d 625, 626 (5th Cir. 1997) ( i i a wt pe d e cn nvrb bsd o R l 4m ' 10 dy r u e et . " s s l i r ui a ee e ae n u ( ) 2 a e i m n ) dm s h j c e s qr " Defendants' own case law, decided under Rule 4(j) (which is identical to Rule 4(m) with regard to the terms of dismissal), also recognizes that dismissal for failure to timely serve must be without prejudice. Reynolds, 752 F.Supp. at 989 (dismissing without prejudice); Carlson, 135 F.R.D. at 194 (same). Defendants attempt an end run around Rule 4(m) by seeking dismissal based upon Rule 4() rh C ut i e n pw r T e d s frh ov u r snt t uhd m s l 1b o t ors n r t o e hy o o o t bi s e o h sc i i a , e ' he . e o a a s ss unlike those under Rule 4(m), may be with prejudice. But Rule 4(m), not Rule 41(b), governs whether to dismiss for failure to timely complete service. Scott, 216 F.3d at 912. Rule 4(m) applies even though the Court may refer to the delay in completing service as a failure to prosecute. Id. (although district court characterized dismissal of claims against defendants not t e sre a bsduo f l et poeu , i p cl i oi "R l 4()t T n i l e d s ae pn au o rsct " liy n k g u 1b,h et m y v ir e m it v n e e h Cr icnt e t d m s l s" ln udr h m r pei l ap cb "R l 4m ) i u osud h i i a a f l g ne t oe r s y plal u ( ) ct r e s s ai e ce i e e . Defendants fail to cite a single case granting dismissal with prejudice (under Rule 41(b) or the

10

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 11 of 17

C ut i e n pw rbased upon a delay in effecting service. D f dn ' o o t d m s orsn r t o e ' he ) e nat m t n o i i e s i s s fails for this reason as well. III. EVEN IF PROCEDURALLY AVAILABLE, DEFENDANTS FAIL TO MEET THE STANDARD TO OBTAIN DISMISSAL FOR FAILURE TO PROSECUTE. E e idf dn cu poe y ek i i awt pe d e o P l oks e y n vn f e nat ol rpr se d m s l i r ui fr o R c'dl i e s d l s s h j c y a effecting service, their motion would fail for the additional reason that they fail to meet the high standard required to obtain such dismissal. Before entering a with-prejudice dismissal for failure to prosecute, the Court must evaluate five criteria and conclude that they support dismissal: " ) degree of actual prejudice to the defendant; (2) the amount of interference with the ( the 1 judicial process; (3) the culpability of the litigant; (4) whether the court warned the party in advance that dismissal of the action would be a likely sanction for noncompliance; and (5) the e i c o l sracos Olsen v. Mapes, 333 F.3d 1199, 1204 (10th Cir. 2003). As shown fc y fe e snt n. fa s i " below, the criteria do not support dismissal in this case. A. Defendants' Conclusory Allegations Fail To Show Prejudice. The relevant inquiry concerning prejudice (element 1, above) is whether a participant in litigation has suffered actual prejudice as the result of delays in the litigation process. The Tenth Circuit recognizes that during the period in which the complaint has not been served on any party, and the process of litigation thus has not begun, a defendant suffers little or no prejudice from not having been timely served. Olsen,3 F d t 25 " eas t D f dn hv nt 33 . a10 ( cueh e nat ae o 3 B e e s ee be sre yt r ui tt mim n a" vn en e d e pe d eoh s i m l) v , j c e i .. Even if defendants here could legitimately rely upon alleged prejudice from a delay in service to seek dismissal for failure to prosecute, they provide insufficient factual support for

11

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 12 of 17

their claim of prejudice. (Def. Br. 8-9.) Instead, their own motion to dismiss shows that defendants have suffered no prejudice. Defendants contend that they made important business decisions ­to proceed with producing their product and to settle a separate piece of litigation with co-defendant Charles Demarest ­ which might have been different had they known of the pendency of this case. (Def. Br. 8.) Defendants, however, fail to explain or to submit any evidence showing what they would have done differently had they been served earlier in this case, or how they were disadvantaged in any way by the delay in service. (Id.) D f dn s r e nat pe e ' judice argument fails for this reason alone. Moreover, t eh i t df dn ' w m t ncn ai t icn n o t tf m h xi t o e nat o n o o ot d th r ot t n h ,r e bs e s i r c e ei a o March 2004 until they were served with the suit in May 2005, they had no reason to believe that PolyRock objected to their activities. In a letter dated March 23, 2004, attorneys for PolyRock nti t m v g e natt t o R c blvd ee l t l a i r g g oy oks o f d h oi df dn h P l ok eee G nr Se w sn i i P l c' ie e n e s a y i a e fn n R patent and demanded that General Steel stop doing so. (Defs. Br. Ex. A to Ex. 1.) On July 21, 2004, Bruce Harrington, who invented and developed the Proprietary Technology and is a P l oklese dm ne t t e nat i m d tys pui P l oksPor t y o R c i ne, e add h df dn m eie t s g o R c' rpia y c a e s al o n y er Technology and marketing materials. (Defs. Br. Ex. C to Ex. 1.) Both before and after

March 29, 2004, the movants were thus nti o P l oks o p i s bu t ibs es o f d f oy c' cm ln aoth r ui s ie R at e n at ie adt t oy ok e addt y es i r g gP l oks i t F r e nat cv i n h P l c dm ne h caen i i oy c'r h . o df dn i ts a R e fn n R gs e s to suggest that they made important business decisions during this period in reliance on P l oksak f b co t t iat ie innes. o R c'l o oj t n oh rcv i s osne y c ei e i ts

12

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 13 of 17

For these reasons, defendants fail to make a showing of prejudice sufficient to support their request for dismissal on the basis of failure to prosecute. B. There Is No Evidence That Plaintiff Has Interfered With The Judicial Process Or Is Otherwise Culpable With Respect To The Delay In Service. D f dn a u t tp i i "e os i e e d wt t j ia process by e nat r e h ln f sr ul n r r " i h u c l e s g a a tf i y tf e h e di allegedly misleading the Court about the reasons for the delay in service on defendants. D f dn cn n t t ln fscusli ad cs o wt oeo df dn ' one e nat ot d h p i i' one n i us n i n f e nat cusl, e s e a a tf , s i h e s stated that p i i w s a b a n aot o t y[sic] wanted to approach protecting their ln f a "m i l t bu hw h a tf ve e technologies." (Aff. of D. Fein ¶ 4.) According to defendants, this statement so conflicts with p i i' s t etot C utht noeenf ac l osa t peet sri t s ln fs te n t h or t ufr e i ni cnt i s r n d e n h a tf a m e a s n a rn v e vg i action earlier as to evidence fraud on the Court and interference with the judicial process. (Def. Br. 10 ­1. C n a t df dn ' 1 ot r o e nat overblown charges of fraud and dishonesty, there is no ) ry e s conflict in the two statements. Th aee s t etodf dn ' one t kp c i acne ao o Ma 2, e lgd te n t e nat cuslo l e n ovr t n n y 0 l am e s o a si 2005, more than a month after plaintiff explained in its April 14 response to the Order to Show Cause that unforeseen financial difficulties occasioned the delay in service. The statement of p i i' cusl ocri p i i' a b a neis perfectly consistent with the earlier ln fs one cne n ln fs m i l c a tf n g a tf ve response to the Order to Show Cause. A small company unexpectedly facing financial problems, such as PolyRock did, would be expected to seriously consider and explore options other than pursuing an expensive piece of litigation to protect its in lc a poe y P l oks tl t l rpr . oy c' ee u t R ambivalence about whether, and how, to proceed in this lawsuit is thus completely consistent with its explanation to the Court that financial problems temporarily prevented it from pursuing this case.

13

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 14 of 17

Finally, and troublingly, defendants fail to explain why, if their counsel found the s t eto p i i'cuslo e o nos t t e i ntof n p i i'cusl i te n f ln fs onet b s i nie , d o cnr t ln fs onewt am s a tf c sn h d o a tf h the supposed inconsistency and permit counsel to supply an explanation. Litigation is not conducted by ambush. T iC ut rl r u e a i t cne pi t egg gi m t n h orsu se i pre o of r ro nai n o os s ' e q r ts r o n i practice to avoid bringing needless disputes before the Court. See D.C.COLO.LCivR 7.1A. Had defendants made a proper effort in this case they could have ascertained that there is no legitimate basis for their claim of misrepresentation. I sm df dn 'asro t t ln f cm ie cl b i e e newt t n u , e nat s t n h p i i o m td u al n r r c i h e s ei a a tf t p e tf e h e j ia poesf l f t Pa tf r pnet t O dr oS o C ueadsbeu u c l rcs as l. ln fs e os o h re t hw as n usqent di l a i i' s e alleged statements of its counsel are consistent and understandable. Defendants thus fail to make the required showing of culpable interference with the judicial process. C. The Elements Of Prior Warning And Lack Of Effective Lesser Sanctions Are Not Satisfied. The purpose of warning a party that continued failure to prosecute may result in dismissal is to give the noncomplying party an opportunity to come into compliance and thereby avoid dismissal on nonmerits grounds. Bowling v. Hasbro, Inc., 403 F.3d 1373, 1377 (Fed. Cir. 2005) ( beas d m s lst hr et vib pnl , ehv l gr on e t t ir t " ] ue i i a i h a hs aaal eay w ae o e gi d h d tc [ c s s e s l e t n c z a si j gs ae nol ao t w r t p i i t t i i aii m nn ) is where a party u e hv a b gt n o a h ln f h d m s lsm i t .It d i i n e a tf a s s e" i oe t C ut w ri t t g r h ors a n h dismissal may be an appropriate sanction. n s e ' ng a Ehrenhaus v.

Reynolds, 965 F.2d 916, 922 (10th Cir. 1992) (dismissal under Rule 37 for failure to comply with C ut odrapor t w e p i i w so ntet t ocm lnecu r u i ors re prpie hr ln f a n o c h nno p ac ol e l n ' a e a tf i a i d st dismissal but failed to heed warning).

14

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 15 of 17

T eC ut Ma h2 O drt S o C uep cdp i i o ntet t t ae h ors r 9 re o hw as l e ln f n o c h if d ' c a a tf i a c dismissal for failure to serve defendants. PolyRock hee t C ut w ri adpo p y edd h ors a n n rm t e ' ng l filed and served its Amended Complaint. Defendants fail to cite a single case supporting the absurd proposition they advance ­that the Court should dismiss a case where, as here, plaintiff heeds t C ut w ri t m v t cs a n. h ors a n o oeh ae l g e ' ng e o D f dn ' ru et ocri t e i c o l sr acosi also nonsensical. e nat a m n cne n h fc y f e e snt n s e s g n g e fa s i H v g edd h C ut w ri concerning the lack of service, there is no reason to consider ai hee t ors a n n e ' ng what additional sanctions short of dismissal might be necessary or appropriate to bring plaintiff into compliance. Defendants'argument that the alleged "x e epe d e t ysf r et m r ui " h uf e r j c e ed

supports the sanction of dismissal fails because, as described above, the claim of prejudice is conclusory and unsupported. I sm R l 4() n t C ut i e n pw rocn o i dce d nt p to n u , u 1b ad h orsn r t o e t ot lt okt o o aply e e ' he r s the delay in service at issue here, but even if they did, defendants fail to meet the standard that would be required to obtain dismissal with prejudice. CONCLUSION F r lo t r sn s t , oy okr us t C utodn df dn ' o o to o a fh e os te P l c e et h ort ey e nat m t n l e a ad R q s e e s i dismiss.

15

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 16 of 17

DATED: June 23, 2005

Respectfully submitted s/ John A. DeSisto John A. DeSisto W. Curtis Graves FEATHERSTONE DESISTO LLP 600 17th Street, Suite 2400 Denver, Colorado 80202 Telephone: (303) 626-7100 Facsimile: (303) 626-7101 E-mail: [email protected] E-mail: [email protected] Attorneys for Plaintiff PolyRock Technologies, LLC

16

Case 1:04-cv-00617-LTB-BNB

Document 28

Filed 06/23/2005

Page 17 of 17

CERTIFICATE OF SERVICE I hereby certify that on June 23, 2005, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the following e-mail addresses: Susan M. Hargleroad Pendleton, Friedberg, Wilson & Hennessey, P.C. [email protected] Kurt S. Lewis Lewis Scheid LLC [email protected] David J. Stephenson, Jr., Fairfield and Woods, P.C. [email protected] s/ John A. DeSisto John A. DeSisto W. Curtis Graves FEATHERSTONE DESISTO LLP 600 17th Street, Suite 2400 Denver, Colorado 80202 Telephone: (303) 626-7100 Facsimile: (303) 626-7101 E-mail: [email protected] E-mail: [email protected] Attorneys for Plaintiff PolyRock Technologies, LLC