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Seed Company Ltd. v. Westerman

United States District Court, District of Columbia

July 17, 2019

SEED COMPANY LIMITED, et al., Plaintiffs,
WILLIAM F. WESTERMAN, et aL, Defendants.

          MEMORANDUM OPINION [DKT.# 180]


         This legal malpractice case has been remanded to this Court for a trial to resolve Count I of the operative complaint. Plaintiffs, Seed Company Limited, and its president, an inventor, Shigeru Tamai (collectively, "Seed" or "plaintiffs"), however, request that I certify for appeal under Federal Rule of Civil Procedure 54(b) my July 18, 2017 Order dismissing the three remaining counts (Counts II, III, and IV) and stay proceedings as to Count I until the appeal of Counts II, III, and IV is complete. For the following reasons, Seed's motion must be GRANTED., BACKGROUND[1]

         In its May 21, 2008 amended complaint, Seed alleges two primary and two contingent legal malpractice claims. The claims all stem from the same root allegation: Seed lost its right to patent a correction tape dispenser in the United States because attorneys from Armstrong, Westerman, Hattori, McLeland & Naughton, LLP ("the Armstrong firm") failed to attach an English translation of a foreign patent application to a motion filed with the United States Board of Patent Appeals and Interferences ("the Board"). See Am. Compl. ¶¶ 13-31 [Dkt. #29]. This allegedly deficient motion was part of an attempt by Seed to prove that it had invented the correction tape dispenser at issue before Christopher Stevens ("Stevens"), a competing inventor who had also applied for a correction tape dispenser patent in the United States. See Id. ¶¶ 19-22.

         To establish that it was first to invent correction tape dispenser, Seed attached two earlier filed patent applications to its motion. See Am. Compl. ¶ 22. One had been filed in Japan; the other had been filed pursuant to the Patent Cooperation Treaty ("PCT"). See Id. Both were written in Japanese. See Id. ¶¶ 13-14. The Board's rules required that Seed include an English translation of each foreign language application submitted with its motion. See Stevens v. Tamai, 366 F.3d 1325, 1328 (Fed. Cir. 2004) (citing 37 C.F.R. § 1.647 (2003)). But the attorneys representing Seed attached a translation only of the earliest filed application, the one filed with the Japanese Patent Office. See Am. Compl. ¶ 22. Seed's PCT application was submitted untranslated. See id.

         When deciding Seed's motion, the Board declined to consider the untranslated PCT application but did, at first, rule in Seed's favor. See Am. Compl. ¶ 23. That success, however, was short lived. Stevens appealed, and the United States Court of Appeals for the Federal Circuit ("Federal Circuit") reversed the Board's determination that Seed was first to invent the correction tape dispenser. See Id. ¶ 31; see generally Stevens, 366 F.3d at 1327-35. According to the Federal Circuit, Seed's failure to file a translation of its PCT application precluded Seed from relying on either the Japanese application or the PCT application to establish the date it reduced its correction tape dispenser to practice. See Am. Compl. ¶ 31; Stevens, 366 F.3d at 1335. As a result, Stevens was awarded the United States patent on the correction tape dispenser, and Seed's patent application had to be' abandoned. See Am. Compl. ¶¶ 31, 39.

         Count I of the amended complaint alleges that this failure to attach a translation of the PCT application to Seed's motion before the Board constitutes malpractice. See Am. Compl. ¶¶ 42-46. In Count II, Seed claims that its attorneys committed further malpractice by providing inaccurate legal advice about the consequences of Stevens's appeal to the Federal Circuit after Seed's initial success before the Board. See Id. ¶¶ 47-52. Counts I and II are both alleged against all named defendants.[2]

         Counts III and IV, by contrast, are alleged against a subset of defendants. In October 2003, while Stevens's appeal to the Federal Circuit was pending, the Armstrong firm split up. See Seed I, 832 F.3d at 330. Some Armstrong attorneys formed Westerman, Hattori, Daniels, and Adrian, LLP (the "Westerman defendants"), which continued representing Seed. See Id. Others formed Kratz, Quintos, and Hanson, LLP (the "Kratz defendants"), the Armstrong firm's successor in interest. See id.; Am. Compl. ¶ 4. Counts III and IV of the amended complaint were pleaded as contingent claims, raised only against the Kratz defendants, and to be asserted only in the event Count I or II was dismissed on statute of limitation grounds. See Am. Compl. ¶¶ 53-66. In these contingent claims, Seed alleges that the Kratz defendants gave inaccurate legal advice about the date the statute of limitations would expire for malpractice claims arising from the Armstrong firm's prosecution of Seed's correction tape dispenser patent application. See id.

         All defendants did, in fact, raise statute of limitations defenses to Counts I and II of the amended complaint. In August 2016, our Court of Appeals addressed those defenses and held the claims timely only as to the Westerman defendants. See Seed I, 832 F.3d at 332, 339. As alleged "against the Kratz defendants," the Court of Appeals deemed Counts I and II "barred by the statute of limitations." Id. at 339.

         This dismissal of Counts I and II on statute of limitations grounds as to the Kratz defendants ripened Counts III and IV. The Court of Appeals further held, with respect to Count I, that neither Seed nor the Westerman defendants were entitled to summary judgment, leaving resolution of that claim "for the factfinder at trial." Seed I, 832 F.3d at 337-38. As a result of our Circuit Court's holdings, then, Counts I and II remained pending against the Westerman defendants only-with Count I earmarked for trial-and Counts III and IV were newly ripe as to the Kratz defendants.

         On remand, the Westerman defendants moved for judgment on the pleadings as to Count II, and the Kratz defendants moved for summary judgment on Counts III and IV. I granted both motions on July 18, 2017, reasoning that Seed had waived Count II earlier in this litigation and that undisputed facts foreclose Seed's success on the merits of Counts III and IV. See Seed II, 266 F.Supp.3d at 150; Order (July 18, 2017) [Dkt. #175]. Thus, as this litigation now stands, Count I must be tried as to the Westerman defendants, and no claims remain pending against the Kratz defendants.

         Seed now moves for Rule 54(b) certification of the July 18, 2017 Order dismissing Counts II, III, and IV and for a stay of proceedings on Count I. See Pis.' Mot. Under Rule 54(b) [Dkt. # 180]. Seed, in effect, wants to appeal my July 18, 2017 decision resolving Counts II, III, and IV as a matter of law before this case proceeds to trial on Count I. All defendants oppose the request. See Defs.' Joint Opp. to Pis.' Rule 54(b) Mot. [Dkt. # 182], STANDARD OF REVIEW

         "When an action presents more than one claim for relief," Federal Rule of Civil Procedure 54(b) permits a district court to "direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay." Fed.R.Civ.P. 54(b). Deciding whether to certify a judgment under Rule 54(b) therefore involves two steps: "A district court must first determine that it is dealing with a 'final judgment, '" and if it is, "the district court must go on to determine whether there is any just reason for delay." Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 7-8 (1980).

         The first step is satisfied when a court has issued a "decision [that] is an ultimate disposition regarding a party's claim for relief." Serv. Employees Int'l Union Nat'l Indus, Pension Fundv. Sci. & Commercial Sys. Corp., 249 F.Supp.3d 130, 133 (D.D.C. 2017).

         At the second step, courts "weigh[] both 'justice to the litigants' and 'the interest of sound judicial administration.'" Brooks v. Dist. Hosp. Partners, L.P.,606 F.3d 800, 806 (D.C. Cir. 2010) (quoting Curtiss-Wright, 446 U.S. at 6, 8). The considerations involved in this balancing "will inevitably differ from case to case." Id. But they include the determinations "whether the claims under review [are] separable from the others remaining to be adjudicated and whether the nature of the claims already determined [is] such that no appellate court [will] have to decide the same issues more than once even if there [are] subsequent appeals." Id. (quoting Curtiss-Wright, 446 U.S. at 8). Courts often "employ[] a list of five relevant factors"- referred ...

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