United States District Court, District of Columbia
MEMORANDUM OPINION Re Document No. 73.
RUDOLPH CONTRERAS, District Judge.
GRANTING CARNEGIE'S MOTION TO DISMISS
The present action arises out of the Plaintiff's claim that he was erroneously omitted as an inventor on five U.S. patents co-owned by the Defendant, the Carnegie Institution of Washington ("Carnegie") and the University of Massachusetts ("UMass"), originally brought in the U.S. District Court for the District of Oregon. The Oregon court transferred the action to this Court pursuant to 28 U.S.C. § 1406(a). Carnegie now moves to dismiss the Plaintiff's Amended Complaint under Federal Rule of Civil Procedure 12(b)(7), for failure to join a necessary party, or in the alternative, under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. For the following reasons, the Court grants Carnegie's motion to dismiss under Rule 12(b)(7).
II. FACTUAL BACKGROUND
Plaintiff Mussa Ali seeks, pursuant to 35 U.S.C. § 256 ("§ 256"), to correct the inventorship on five U.S. patents. Am. Compl. ¶ 1, ECF No. 4. Carnegie and UMass are co-owners, by assignment, of the patents at issue. Id. ¶¶ 3-4. The patents were allegedly issued as a result of the collaboration between Dr. Andrew Fire and Dr. Craig C. Mello, the two lead inventors of the laboratories of Carnegie and UMass, respectively. See Def.'s Mot. Dismiss 4, ECF No. 73-1. The patents claim methods of inhibiting the expression of a particular gene in a cell through the introduction of a double stranded ribonucleic acid ("RNA") molecule. Am. Compl. ¶ 19. As a result of the discovery of this process, called RNA interference ("RNAi"), the two lead inventors were awarded the Nobel Prize in Medicine in 2006. See Def.'s Mot. Dismiss 1.
The Plaintiff alleges that he made a critical contribution to the discovery of RNAi, which is central to the claims in each of the patents, while working at UMass in Dr. Mello's laboratory, and that Dr. Mello then shared his discovery with Dr. Fire. See Am. Compl. ¶¶ 8-20; see also Pl.'s Opp'n Mot. 3, ECF No. 75. The Plaintiff subsequently approached Carnegie and UMass on numerous occasions seeking to be named a co-inventor. Id. When those attempts failed, the Plaintiff filed his original complaint and his Amended Complaint against Carnegie and UMass in the U.S. District Court for the District of Oregon in September and December 2012, respectively. See generally Compl., ECF No. 1; Am. Compl., ECF No. 4.
In his Amended Complaint, the Plaintiff asserted a claim to be named a co-inventor of the patents at issue under § 256 and two alternative claims for damages for the revenue derived from the patents, proceeds he alleges he is owed as a result of his role in the discovery of RNAi. See Am. Compl. Counts 1, 2, and Alternative Count 2. Ali's alternative counts are titled "Legal Damages." In Count 2 for Legal Damages, Ali alleges that "[o]n information and belief, during the time of Ali's work at [U]Mass, [U]Mass had a policy that all [U]Mass employees making inventions assigned, or had an obligation to assign, those inventions and all rights thereto, to [U]Mass. In consideration of that assignment, [U]Mass would pay the co-inventors a percentage of all revenue realized by [U]Mass through exploitation of that invention, including licensing, to be shared equally between investors." Am. Compl. ¶ 30. Ali further alleges that he "is entitled to a portion of all proceeds realized by [U]Mass as a consequence of any sale, licensing, enforcement or threatened enforcement of any and all of the Patents...." Id. ¶ 31. In Alternative Count 2, Ali alleges that "[o]n information and belief, [U]Mass and Carnegie have secured substantial fees by reason of selling, licensing, or otherwise transferring their rights in and to the Patents to third parties, " and that as such, "Ali is entitled to recover from [U]Mass and Carnegie a portion of moneys they have secured by reason of selling, licensing, or otherwise transferring their rights in and to the Patents to third parties, as a reasonable measure of the moneys Ali would have been entitled to recover if properly named as a co-inventor from the filing date." See Am. Compl. ¶¶ 35-36.
In two separate sets of opinions and orders, the District Court of Oregon first dismissed UMass from the case on the basis of sovereign immunity and then ruled that the court lacked personal jurisdiction over Carnegie. See Op. & Order, ECF No. 41; Op. & Order, ECF No. 66. After the Oregon court transferred the case sua sponte to this Court pursuant to 28 U.S.C. § 1406(a), the Defendant moved to dismiss the case for failure to join a necessary party- UMass-or, in the alternative to dismiss or strike the Plaintiff's two alternative claims for damages. See Def.'s Mot. Dismiss 1-3. Because the Court finds that UMass is a necessary party that must, but cannot be joined, and that the action cannot "in equity and good conscience" continue absent UMass, the Court will grant Carnegie's motion to dismiss under Federal Rule of Civil Procedure 12(b)(7).
Carnegie first argues that the case should be dismissed in its entirety under Federal Rule of Civil Procedure 12(b)(7) because UMass must, but cannot, be joined. Specifically, Carnegie contends that UMass is a required party under Rule 19(a), but that UMass's sovereign immunity precludes its joinder, effectively barring the Plaintiff's claims. Thus, according to the Defendant, the complaint must be dismissed under Rule 19(b) because the case cannot proceed "in equity and good conscience" in UMass's absence. Plaintiff meanwhile argues that UMass is not a necessary party under Rule 19(a), but that even if it were, it is not required to be joined under Rule 19(b). The Court finds that UMass is a necessary party under Rule 19(a) and required to be joined under Rule 19(b), and as such, the case must be dismissed for failure to join UMass.
A. Legal Standard
Federal Rule of Civil Procedure 12(b)(7) provides for the dismissal of a complaint for "failure to join a party under Rule 19." FED. R. CIV. P. 12(b)(7). Dismissal under Rule 12(b)(7) is "warranted only when the defect is serious and cannot be cured." Direct Supply, Inc. v. Specialty Hospitals of America, LLC, 878 F.Supp.2d 13, 23 (D.D.C. 2012) (citations omitted). For the purposes of a Rule 12(b)(7) motion, the court must accept the complaint's allegations as true, and may also consider matters outside the pleadings when determining whether Rule 19 requires that a party be joined. Id. The burden is on the defendant seeking dismissal for failure to name an absent person to show "the nature of the interest possessed by an absent party and that the protection of that interest will be impaired by the absence." Citadel Inv. Group, L.L.C. v. Citadel Capital Co., 699 F.Supp.2d 303, 317 (D.D.C. 2010) (citations omitted).
Federal Rule of Civil Procedure 19 establishes a three-step procedure for determining whether an action must be dismissed because of the absence of a party required for a just adjudication: the court must determine (1) whether the absent party is "required" for the litigation according to the factors enumerated in Rule 19(a); (2) whether the required party can be joined; and (3) if joinder is not feasible, whether the action can nevertheless proceed in "equity and good conscience" under Rule 19(b). See OAO Healthcare Solutions, Inc. v. Nat'l Alliance of Postal & Fed. Emps., 394 F.Supp.2d 16, 19 (D.D.C. 2005); see also Kickapoo Tribe of Indians of Kickapoo Reservation in Kansas v. Babbitt, 43 F.3d 1491, 1494 (D.C. Cir. 1995) (citing FED. R. CIV. P. 19). Multiple factors bear on the decision whether to proceed without a required person, such that the decision "must be based on factors varying with the different cases, some such factors being substantive, some procedural, some compelling by themselves, and some subject to balancing against opposing interests." ...