Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Nocula v. UGS Corp.

March 24, 2008

MITCH NOCULA, AN INDIVIDUAL, AND TOOLING SYSTEMS INTERNATIONAL CORPORATION, AN ILLINOIS CORPORATION, PLAINTIFFS-APPELLANTS,
v.
UGS CORPORATION, A DELAWARE CORPORATION, AND UGS SP. Z O.O., A CORPORATE BODY IN THE REPUBLIC OF POLAND, DEFENDANTS-APPELLEES.



Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 05 C 5275-Robert W. Gettleman, Judge.

The opinion of the court was delivered by: Sykes, Circuit Judge.

ARGUED MARCH 26, 2007

Before ROVNER and SYKES, Circuit Judges.*fn1

Mitch Nocula is the sole shareholder of two corporations: Tooling Systems International Corp. ("TSI"), an Illinois company that takes orders for the manufacture of tools and dies, and P.Z. Alucon Sp. z o.o. ("Alucon"), a Polish corporation that is one of TSI's primary subcontractors for the manufacture of the tools and dies. Nocula and TSI claim that UGS Corporation ("UGS"), a Texas-based Delaware corporation that sells computer-aided design software, and UGS Sp. z o.o. ("UGS Poland"),*fn2 a Polish sublicensee of UGS's software, intentionally disrupted Alucon's business by lodging a criminal complaint against it in Poland for theft of intellectual property. In connection with the ensuing prosecution, Polish police seized Alucon's computers. Although the prosecution ended in a verdict for Alucon, the computers disappeared and Alucon's engineering data was lost.

Nocula and TSI claim UGS and UGS Poland maliciously instituted the Polish criminal prosecution and used it as leverage to force the transfer of a license to use UGS's software from a third-party licensee, Electrode Machining Services ("Electrode"), to Alucon. These actions form the basis of various tort and contract claims asserted in this lawsuit filed. UGS and UGS Poland moved to dismiss, arguing the claims were barred by the act-of-state doctrine, which generally prohibits federal courts from entertaining claims that would question the validity of the acts of a foreign sovereign under that sovereign's laws. The district court granted this motion. Nocula, proceeding pro se, filed a timely notice of appeal on his own behalf. After the 30-day appeal clock expired,counsel was retained and filed a "corrected" notice of appeal for Nocula and TSI.

Jurisdictional defects prevent us from addressing most of the claims in this case. The first notice of appeal-signed and filed by "Mitch Nocula, Pro Se"-was ineffective to provide notice of TSI's appeal; the second notice, naming both Nocula and TSI, was untimely. Accordingly, TSI's appeal must be dismissed for lack of appellate jurisdiction. Nocula's notice of appeal was timely, but most of the claims he asserts belong to his corporation, Alucon, which is not a party. To the extent Nocula is attempting as a shareholder to sue in tort or contract for injuries to Alucon, his claims are barred by the rule against shareholder standing.

One claim arguably belonging to Nocula personally pertains to the "wrongful" loss of the computers and engineering data. We say arguably because the amended complaint sometimes describes this as the property of Alucon and at other times asserts the computers and data belonged to Nocula personally. Either way, the district court properly invoked the act-of-state doctrine because the adjudication of this claim would require American courts to question the legality of the seizure and loss of this property during the course of the Polish criminal prosecution. Another claim asserted by Nocula personally is for "harassment," which is not cognizable under Illinois law.

I. Background

Nocula is the sole owner of TSI, a corporation in the business of soliciting orders for custom-manufactured machine tools and dies. TSI farms out a substantial number of these orders to subcontractors, including Alucon, a Polish company also owned by Nocula. In the early 1990s, Nocula wanted to use computers to streamline the otherwise complicated and time-consuming process of making tools and dies from prototypes. Nocula teamed up with Charles Hahs Jr. and began to explore the use of computer-aided design ("CAD") applications in the tool-and-die industry. Hahs was the owner of Electrode, a Florida corporation, which held a license to use certain CAD software made by UGS. Using UGS's CAD software, Hahs and Nocula began implementing a "virtual shop" at Alucon, Nocula's Polish company, that allowed tools and dies to be more economically and quickly manufactured.

UGS Poland, a wholly owned subsidiary of UGS responsible for sublicensing UGS's CAD software and enforcing its intellectual property rights in Poland, filed a criminal complaint in Poland against Alucon and Hahs for illegally using UGS software. This accusation prompted the commencement of a criminal prosecution. Polish police seized all of Alucon's computers, effectively shutting down its operations. The president of Alucon was arrested, as was Hahs. These disruptions caused Alucon to default on purchase orders from TSI, which in turn defaulted on a number of its contracts with its own customers.

Nocula sought to resolve this situation with dispatch. He asked UGS what could be done to get the charges against Alucon dropped and the seized computers returned. Nocula negotiated an agreement with UGS that it would "do everything possible to terminate the criminal proceedings against Alucon" in exchange for the transfer of Electrode's UGS software license to Alucon. The license was duly transferred. As a result, Alucon was required to purchase UGS CAD software and updates from UGS Poland.

Nocula contends UGS reneged on the deal by continuing to demand prosecution of Alucon and its personnel, or at least by not making any effort to see that those charges were dropped. Moreover, he claims UGS Poland billed Alucon for software maintenance it did not perform and updates it did not provide. When Alucon refused to pay, UGS Poland sought and won a civil judgment from a Polish court against Alucon and seized its bank accounts. In the meantime, the Polish criminal prosecution ended with a verdict favorable to Alucon. Unfortunately, according to Polish authorities, Alucon's seized computers and accompanying engineering data "mysteriously disappeared." As a result, Alucon ceased doing business.

Based on these events, Nocula and TSI filed a diversity suit in federal court in Illinois. Nocula's claims include malicious prosecution, fraudulent inducement, breach of contract, tortious interference, a claim for the wrongful loss of his property, and harassment. TSI's claims are for various forms of tortious interference.

UGS and UGS Poland moved to dismiss based on the actof-state doctrine, and the district court granted the motion. The court held that "any claim based on UGS Poland's filing, prosecuting, receiving and executing on the civil judgment in Poland is barred by the act of state doctrine" because any claim stemming from that action "would require this court to reverse the Polish court's decision." As for any claims touching upon the Polish criminal prosecution, the court concluded that the injuries are "all alleged to stem from the Polish police seizure" of Alucon's computers, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.