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Glenayre Electronics, Inc. v. Jackson

August 30, 2007

GLENAYRE ELECTRONICS, INC., PLAINTIFF,
v.
PHILIP JACKSON, AN INDIVIDUAL, DEFENDANT.
PHILIP JACKSON, COUNTERCLAIM-PLAINTIFF,
v.
GLENAYRE ELECTRONICS, INC., COUNTERCLAIM-DEFENDANT.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

In 2002, Glenayre Electronics, Inc. (hereinafter, "Glenayre") brought an action (hereinafter, "the 2002 action") against Philip Jackson (hereinafter, "Jackson") seeking a declaratory judgment that its products did not infringe on a patent owned by Jackson. Jackson brought a Counterclaim for both indirect and direct infringement. A jury returned a verdict for Jackson on the direct infringement claim. Now, Jackson has sued his attorneys, Mr. Niro and the firm of Niro, Scavone, Haller & Niro (collectively, hereinafter, "the Niro firm") in state court for malpractice in connection with the 2002 action.

The Niro firm has moved to enjoin Jackson from making certain arguments in the malpractice action.

I. BACKGROUND

Following trial, the jury in the 2002 action found for Jackson and awarded him $12.1 million in damages for the direct infringement of his patent. Jackson accepted a remittitur which left the sum at $2.65 million, but this Court then ruled that acceptance of the remittitur prevented him from pursuing claims against Glenayre for indirect infringement. Specifically, this Court held (and the Federal Circuit affirmed) that Jackson was "completely compensated" by the remittitur for Glenayre's infringement.

Prior to this suit, Jackson had sued certain of Glenayre's customers for patent infringement. These claims were stayed pending resolution of the direct infringement alleged against Glenayre. Jackson has not sought to have these stays lifted.

In 2006, Jackson filed a five-count complaint in state court alleging negligence, failure to provide an accounting, and malpractice in the 2002 action. Within the two counts of malpractice, Jackson makes the following allegations: (a) that the Niro firm advised Jackson to seek a claim of damages against Glenayre rather than an injunction or declaratory judgment, thereby putting into jeopardy Jackson's potential claims against Glenayre customers;

(b) that the Niro firm advised Jackson to withdraw an interlocutory appeal protesting the bifurcation (and stays) of Jackson's claims against Glenayre customers; (c) that the Niro firm failed to adequately supervise an expert to ensure that the expert's testimony would be admissible; and (d) that the Niro firm advised Jackson to accept the remittitur, thereby leading this Court to hold that Jackson had been fully compensated.

The Niro firm has attempted to dismiss Jackson's malpractice claims based on the doctrine of collateral estoppel. The state court held that the arguments that Jackson is pursuing in the malpractice action were not litigated in this Court and therefore are not barred by collateral estoppel. Now, the Niro firm asks that this Court enjoin Jackson from making assertions that contradict this Court's alleged judgment that the $2.65 million after remittitur represented all possible damages in the infringement case (this precludes Jackson from arguing that had the Niro firm not advised him to accept the remittitur, he could have obtained a more favorable verdict in a second damages trial). Additionally, the Niro firm asks that this Court enjoin Jackson from arguing that he could have brought lawsuits against Glenayre's customers because this Court enjoined such claims.

Before addressing the issues before the Court, it is important to point out what issues are not before this Court. Specifically, Jackson's substantive allegations of malpractice are not at issue here. This Court has ignored portions of the parties' briefs devoted to the malpractice issue.

II. AUTHORITY

A federal court's ability to enjoin state court actions stems from two related acts, the Anti-Injunction Act and the All Writs Act.

See 28 U.S.C. § 2283; 28 U.S.C. § 1651(a). The All Writs Act permits "all courts established by Act of Congress . . . [to] issue all writs necessary and appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law." 28 U.S.C. § 1651(a). The Anti-Injunction Act generally prohibits a federal court from enjoining or staying proceedings in a state court except where a delineated exception applies. 28 U.S.C. § 2283; In re Prudential Ins. Co. of America Sales Practice Litigation, 261 F.3d 355, 365 (3d Cir. 2001); Carlough v. Amchem Products, Inc., 10 F.3d 189, 201 n.9 (3d Cir. 1993). The Act was designed to prevent friction between state and federal courts and to protect state court proceedings from federal interference. Amalgamated Clothing Workers of America v. Richman Bros., 348 U.S. 511, 514-16 (1955). The "relitigation exception" specifically permits federal courts to enjoin a state court's relitigation of a matter previously determined by the federal court. 28 U.S.C. § 2283 (exception where federal court seeks to "protect or effectuate its judgments"); Samuel C. Ennis & Co., Inc. v. Woodmar Realty Co., 542 F.2d 45, 49 ...


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