Misc. Action No. 07-493 (RMC) MDL Docket No. 1880
The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge
MEMORANDUM OPINION DENYING PAPST'S MOTION TO AMEND COMPLAINT
In this Multi District Litigation ("MDL"), Papst Licensing GmbH & Co. ("Papst") has alleged that digital camera manufacturers that sell products in the United States have infringed U.S. Patent Nos. 6,470,399 and 6,895,449 (collectively the "Patents"). In opposition, the camera manufacturers seek a declaratory judgment of non-infringement and/or patent invalidity.*fn1
One of the underlying lawsuits that was transferred to this MDL is Papst Licensing GmbH & Co. KG v. Samsung Techwin Co., Civ. No. 07-2088 (D.D.C.) ("Papst v. Samsung Techwin"). In that case, Papst brought suit against Samsung Techwin Co. and Samsung Opto-Electronics America, Inc. alleging that they made, used, or sold digital cameras that infringed the Patents. Papst now moves to amend the complaint in Papst v. Samsung Techwin to add three additional parties: Samsung Electronics Co. Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC. Papst also seeks to amend the complaint to allege that additional products infringe the Patents, namely camcorders, camera phones, and MP3 players/voice recorders. As explained below, the proposed amendment would greatly prejudice the opposing parties and thus the motion to amend will be denied.
In June of 2007, Papst brought suit against Korea-based Samsung Techwin Co. ("Techwin") and its U.S. subsidiary, Samsung Opto-Electronics America, Inc. ("Opto-Electronics") in the Central District of California. See Papst Licensing GmbH & Co. KG v. Samsung Techwin Co., No. 07-4249 (C.D. Calif.). Venue was transferred to the District of New Jersey. See Papst Licensing GmbH & Co. KG v. Samsung Techwin Co., 07-4940 (D.N.J.). The MDL Panel transferred the case into this MDL on November 5, 2007. See Papst Licensing GmbH & Co. KG v. Samsung Techwin Co., 07-2088 (D.D.C.), MDL Transfer Order [Dkt. #1]. Papst alleged that the Techwin and Opto-Electronics infringed the Patents by "making, using, offering to sell or selling within the United States and/or importing into the United States, including this judicial district, digital cameras" covered by the Patents. See id., Compl. [Dkt. #3-1].
Early in this litigation, on April 8, 2008, the Court entered a scheduling order requiring that motions to join third parties or to amend the pleadings be filed by June 25, 2008. See Second Practice & Pro. Order [Dkt. # 36 ] ¶ 19. In November of 2008, the Court stayed discovery. See Minute Order filed Nov. 13, 2008.
Subsequently, in February of 2009, Techwin transferred its digital camera business to Samsung Digital Imaging Co., which in turn merged its digital camera business into Korea-based Samsung Electronics Co. Ltd. on April 1, 2010. Samsung Digital Imaging Co. then ceased to exist as a separate entity. On October 4, 2010, Papst moved for leave to file a first amended complaint. Papst seeks to add three parties to the Papst v. Samsung Techwin case: Samsung Electronics Co. Ltd. and its U.S. subsidiaries, Samsung Electronics America, Inc. and Samsung Telecommunications America, LLC. (all three collectively "the Samsung Electronics entities"). Papst also moves to amend the complaint to allege that, in addition to digital cameras, the following products infringe the Patents: camera phones, camcorders, and digital voice recorders/MP3 players. Techwin, Opto-Electronics, and the First Wave Camera Manufacturers oppose.
Papst erroneously contends that this matter is governed by Federal Rule of Civil Procedure 15(a), which provides that a leave to amend should be freely granted "when justice so requires." Fed. R. Civ. P. 15(a). Under this standard, a court may deny a motion to amend if it finds "undue delay, bad faith or dilatory motive on part of the movant, repeated failure to cure deficiencies by amendments previously allowed, [or] undue prejudice to the opposing party." Foman v. Davis, 371 U.S. 178, 182 (1962).
Because Papst seeks leave to amend which deviates from a court-ordered deadline, the more stringent good cause standard imposed by Federal Rule of Civil Procedure 16(b) applies.
The good cause standard under Rule 16(b) applies after the deadlines set forth in a scheduling order have passed. Lurie v. Mid-Atlantic Permanente Medical Grp., P.C., 589 F. Supp. 2d 21, 23 (D.D.C. 2008) (relying on numerous circuit courts). "To hold otherwise would allow Rule 16's standards to be 'short circuited' by those of Rule 15 and would allow for parties to disregard scheduling orders, which would 'undermine the court's ability to control its docket, disrupt the agreed-upon course of the litigation, and reward the indolent and the cavalier.'" Id. at 23 (quoting Leary v. Daeschner, 349 F.3d 888, 906 (6th Cir. 2003)). Rule 16(b) provides that a court may enter a scheduling order that limits the time to amend the pleadings and that such schedule may be modified only for good cause and with the judge's consent. Fed. R. Civ. P. 16(b)(4) (emphasis added). The Second Practice and Procedure Order that set the June 25, 2008 deadline for joining third parties and amending the pleadings recited this rule. See Second Practice & Pro. Order [Dkt. # 36] ("This schedule shall not be modified, even where all parties consent, except upon a showing of good cause and by leave of the Court."). To show good cause under this Rule, the moving party must show both diligence and a lack of prejudice to the opposing parties. See Robinson v. Detroit News, Inc., 211 F. Supp. 2d 101, 114 (D.D.C. 2002) (motion to amend denied due to undue delay); Leary, 349 F.3d at 906 (to determine whether good cause has been shown, a court must consider the issue of prejudice).