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Kim v. Earthgrains Co.

June 24, 2010

YOON JA KIM, PLAINTIFF,
v.
THE EARTHGRAINS CO., K/N/A SARA LEE BAKERY GROUP, INC., DEFENDANTS.



The opinion of the court was delivered by: Susan E. Cox United States Magistrate Judge

Magistrate Judge Susan E. Cox

MEMORANDUM OPINION AND ORDER

After 10 long years of litigation, Yoon Ja Kim's, Ph.D. ("Dr. Kim") patent infringement claim -- whose litigation costs caused Dr. Kim to twice remortgage her home, accumulate over $80,000 in credit card debt, and borrow money from friends and family -- was ready for trial. But the Earthgrains Co., k/n/a/ Sara Lee Bakery Group, Inc. ("Sara Lee") has now filed a motion to dismiss with prejudice, pursuant to Title 28 of United States Code Section 1915(e)(2)(A).*fn1 Sara Lee claims Dr. Kim made false statements on her in forma pauperis ("IFP") application, warranting dismissal. While we find that she did, in fact, make false statements, we nonetheless deny the motion and set this case for trial [dkt. 247 & 254].

II. BACKGROUND FACTS

In 2001, Dr. Kim brought a patent infringement claim against Sara Lee pro se. In 2003, Dr. Kim retained Lord, Bissel & Brook LLP. Dr. Kim terminated those attorneys in early 2005 and retained McAndrews, Held & Malloy, Ltd. a few weeks later. In 2006, Dr. Kim terminated those attorneys and again proceeded pro se.

On March 16, 2009, Dr. Kim told the Court that she was financially unable to retain counsel. The Court knew Dr. Kim's case was going to trial and believed it was in both parties' best interests that Dr. Kim have counsel. Consequently, the Court suggested to Dr. Kim that she apply for IFP status and informed Dr. Kim that the Court would assign counsel if she financially qualified.

On March 18, 2009, Dr. Kim filed a motion for leave to proceed IFP.*fn2 The IFP application contained eight questions that Dr. Kim answered by checking "yes" or "no" boxes.*fn3 Question 1 asked if Dr. Kim was currently incarcerated and, if so, whether she received payment from the institution.*fn4 Dr. Kim answered she was not incarcerated but did receive a $593 monthly payment from the institution.*fn5 Question 2 asked if Dr. Kim was currently employed, to which Dr. Kim answered "yes" and wrote that she was self-employed at "Research Resources, Inc."*fn6 Question 3(d) asked if Dr. Kim received more than $200 from Social Security within the past twelve months, to which Dr. Kim answered "no."*fn7 Question 3(e) asked if Dr. Kim received more than $200 in gifts or inheritances in the past twelve months, to which Dr. Kim answered "no."*fn8 Question 6 asked if Dr. Kim owned any real estate, to which Dr. Kim answered "no."*fn9 Dr. Kim's answers to Questions 1, 2, 3(d), 3(e) and 6 would later become a contentious issue.

Dr. Kim also included an additional information letter with her IFP application, though the IFP application did not require or request the additional letter.*fn10 Dr. Kim wrote in the letter that the "research and development of . . . [my] patent is supported by my parent's inheritance . . . ."*fn11 She further wrote, "[t]o pay for litigation costs, I . . . remortgaged my house in the U.S., [and] obtained [a] Home Equity Line of Credit, and accumulated credit card debt."*fn12 On March 31, 2009, the Court granted Dr. Kim IFP status and appointed her counsel.

On January 26, 2010, Sara Lee took Dr. Kim's deposition during supplemental discovery.*fn13

During the deposition, Dr. Kim testified that she (1) could receive income from her family in Korea if she wanted;*fn14 (2) paid her research and living expenses using her father's inheritance and still had money from her father's inheritance;*fn15 (3) owned and remortgaged a house in the U.S. to pay attorneys fees;*fn16 (4) owned a one-sixth share in a five-story commercial building in Korea that is co-owned with her brother and sisters;*fn17 (5) owned a one-sixth share in her family's forest and received about $80,000 in 2001-2002 from the Korean government when they built a road through the forest;*fn18 and (6) was not employed at Research Resources, Inc. as of March 18, 2009.*fn19

At a status hearing on February 10, 2010, Sara Lee informed the Court of Dr. Kim's deposition testimony, suggesting that she may have made false statements on her IFP application. The Court relieved Dr. Kim's appointed counsel from further proceedings until the IFP issue was resolved. The Court then granted Sara Lee leave to file a motion regarding Dr. Kim's IFP status and allowed Sara Lee to request certain documents from Dr. Kim to more fully analyze her financial status. Dr. Kim again proceeded pro se.

On February 16, 2010, Sara Lee filed both a document requesting Dr. Kim produce certain information needed to determine her financial status and a motion to dismiss with prejudice pursuant to section 1915(e)(2)(A), which provides that "the court shall dismiss the case at any time if the court determines that the allegation of poverty is untrue."*fn20 On March 2, 2010, Dr. Kim filed an opposition in response to Sara Lee's motion to dismiss and attached what she considered to be her amended IFP application as an exhibit. However, Dr. Kim never filed this amended IFP application with the Court. Of note, however, in her amended IFP application Dr. Kim mentioned for the first time that she received $593 monthly in Social Security benefits.*fn21

On March 11, 2010, the Court held an evidentiary hearing on Dr. Kim's IFP application.*fn22

During cross-examination, Dr. Kim testified that she bought her house in 1985, paid off the mortgage sometime between 1990-1992, remortgaged her house in 2004-2005 for $220,000, and then again in 2006 for $50,000.*fn23 Dr. Kim confirmed that she (1) owned a one-sixth share of a commercial building in Korea;*fn24 (2) owned a one-sixth share in some other real property in Korea, though Dr. Kim was unsure whether the real property was a forest or a mountain;*fn25 and (3) received around $80,000 from the Korean government between 2004-2006 because the Korean government built a road through the real property.*fn26 Dr. Kim testified that in 2004 she borrowed about $60,000 from her friends in ...


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