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Simonian v. Hunter Fan Co.

July 8, 2010

SIMONIAN
v.
HUNTER FAN COMPANY



Name of Assigned Judge or Magistrate Judge Amy J. St. Eve Sitting Judge if Other than Assigned Judge

DOCKET ENTRY TEXT

Defendant's motion to dismiss [18] is denied. Joint status report to be filed by 7/23/10. Status hearing remains set for 7/28/10 at 8:30 a.m.

O[ For further details see text below.] Notices mailed by Judicial staff.

STATEMENT

Before the Court is Defendant Hunter Fan Company's ("Defendant") Motion to Dismiss for Lack of Subject Matter Jurisdiction. In its motion, Defendant asserts that a first-to-file limitation on false patent marking qui tam actions jurisdictionally bars Plaintiff Thomas A. Simonian's ("Plaintiff") action. For the following reasons, the Court denies Defendant's motion to dismiss.

BACKGROUND

In this qui tam action, Plaintiff alleges that Defendant violated 35 U.S.C. § 292 by marking certain of Defendant's thermostat products with United States Patent Number 4,911,358 even though that patent had expired. (R. 1, Complaint, ¶¶ 1-2.) Plaintiff further alleges that Defendant marked the thermostats with the "intent to deceive the public and to gain a competitive advantage in the market." (R. 1, Complaint, ¶ 2.) Pursuant to § 292, Plaintiff seeks, inter alia, an award of monetary damages against Defendant in the amount of $500 per false marking offense, one half of which is to be paid to the United States. (R. 1, Complaint, ¶ 3, p. 6.)

Defendant has moved to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). (R. 19, Def.'s Mot. at 3.) In support of its motion to dismiss, Defendant contends that approximately four hours before Plaintiff filed the present suit, a different plaintiff filed a separate false patent marking qui tam action against Defendant based on the same material allegations.*fn1 (R. 19, Def.'s Mot. at 2.) Defendant claims that a provision of the False Claims Act, 31 U.S.C. § 3730(b)(5), creates a first-to-file limitation that jurisdictionally bars Plaintiff's action by preventing any person other than the Government from bringing a subsequent related action.

(R. 19, Def.'s Mot. at 3.)

In response, Plaintiff contends that the first-to-file limitation of the False Claims Act, 31 U.S.C. § 3730(b)(5), is inapplicable to this case as that statute applies to false claims cases and not false patent markings cases. (R. 23, Pl.'s Resp. at 7). In its reply, Defendant argues that a dismissal under Rule 12(b)(1) is nonetheless warranted on the alternative ground that the plain language of 35 U.S.C. § 292 bars a second action. (R. 24, Def.'s Reply at 2-4.) Defendant also argued in its reply that the reasoning behind the first-to-file limitation of 31 U.S.C. § 3730(b)(5) is equally applicable to false patent marking qui tam actions and thus requests the Court to apply a similar first-to-file limitation in this case. (R. 24, Def.'s Reply at 4.)

LEGAL STANDARD

"Federal courts are courts of limited jurisdiction and may only exercise jurisdiction where it is specifically authorized by federal statute." Evers v. Astrue, 536 F.3d 651, 657 (7th Cir. 2008) (citation and quotation marks omitted). As such, "[e]nsuring the existence of subject-matter jurisdiction is the court's first duty in every lawsuit." McCready v. White, 417 F.3d 700, 702 (7th Cir. 2005). As the Seventh Circuit explains, "[s]ubject-matter jurisdiction is so central to the district court's power to issue any orders whatsoever that it may be inquired into at any time, with or without a motion, by any party or by the court itself." Craig v. Ontario Corp., 543 F.3d 872, 875 (7th Cir. 2008). Furthermore, the proponent of federal jurisdiction bears the burden of establishing subject matter jurisdiction. Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540 (7th Cir. 2006) ("[The] party that chooses federal court [must] set out the basis of federal jurisdiction and prove any contested factual allegation."); see also Glaser v. Wound Care Consultants, Inc., 570 F.3d 907, 913 (7th Cir. 2009) ("The burden of proof on a 12(b)(1) issue is on the party asserting jurisdiction.").

ANALYSIS

In its motion, Defendant requests the Court to apply the first-to-file limitation of 31 U.S.C. § 3730(b)(5), a provision of the False Claims Act, to the present false patent marking case. When determining the applicability of a statutory provision, the Court must "assume[] that the purpose of the statute is communicated by the ordinary meaning of the words Congress used; therefore, absent any clear indication of a contrary purpose, the plain language is conclusive." U.S. v. Ye, 588 F.3d 411, 414-415 (7th Cir. 2009); Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980) ("[T]he starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intent to the contrary, that language must ordinarily be regarded as conclusive."); Pittway Corp. v. U.S., 102 F.3d 932, 934 (7th Cir. 1996) ("All statutory interpretation begins with the language of the statute itself, and where the statute's language is plain, ...


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