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Bradley v. L'Oreal USA

August 30, 2010

KATHY BRADLEY, PLAINTIFF,
v.
L'OREAL USA, INC., DEFENDANT.



The opinion of the court was delivered by: Herndon, Chief Judge

MEMORANDUM & ORDER

I. Introduction

Before the Court is defendant L'Oreal USA, Inc.'s ("L'Oreal") Alternative Motion to Stay Pending the Appellate Decision in a Dispositive Case (Doc. 23). Defendant asks that this case be stayed pending the resolution in the United States Court of Appeals for the Federal Circuit of Stauffer v. Brooks Brothers, Inc., 2009-1428, -1430, -1454 ("Stauffer"). Defendant sets forth its legal arguments in a supporting memorandum (Doc. 24). Relator Kathy Bradley ("Bradley") has timely opposed the Motion (Doc. 27) and thus, it is ripe for determination.

Bradley brings this qui tam suit against L'Oreal pursuant to 35 U.S.C. § 292, for false patent marking of its products: specifically, that several of its mascara make-up products allegedly bore expired patent numbers (Doc. 2). Among other pending motions, L'Oreal has filed a Motion to Dismiss, wherein one of the issues is whether Bradley has actual Article III standing to bring such an action (Doc. 19). L'Oreal states that the Stauffer case, currently on appeal with the Federal Circuit, centers on this same issue and therefore, a stay of this case to await the Stauffer appellate opinion will serve to simplify the issues before the Court and will not prejudice Bradley (Doc. 24). In response, Bradley argues that a stay will be prejudicial, as it will be for an indeterminate amount of time, will not simplify the issues before the Court nor reduce the burden of litigation on the Parties (Doc. 27). Based on the Court's analysis of the matter herein, it finds that a stay is warranted.

II. Discussion

A. Legal Standard

A movant does not have an absolute right to a stay. Instead, the movant bears the burden of proof to show that the Court should exercise its discretion in staying the case. Indiana State Police Pension Trust v. Chrysler, LLC, - U.S.-, 129 S.Ct. 2275, 2277 (2009). "The power to stay a case is 'incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.' " Walker v. Merck & Co., Inc., No. 05-cv-360-DRH, 2005 WL 1565839 at *2 (S.D. Ill. June 22, 2005) (Herndon, J.) (citing Landis v. North American Co., 299 U.S. 248, 254 (1936)). "In considering a motion for stay, courts consider both the interest of judicial economy and the potential prejudice or hardship to the parties." Id. (citation omitted). "A district court may stay proceedings even where subject matter is uncertain." Id. However, the stay should not be for one of "indefinite duration" absent a pressing need. Landis, 299 U.S. at 255.

B. Analysis

1. Interest of Judicial Economy

L'Oreal argues that because the same standing issue is to likely be addressed on appeal in Stauffer, the Federal Circuit's opinion will serve to simplify the issues in this case. Further, L'Oreal notes that because oral argument in Stauffer already took place several weeks ago, on August 3, 2010, a decision can be expected to issue in the next few months. Therefore, L'Oreal claims that this brief stay will only serve to prevent considerable waste of both the Court's and the Parties' resources in briefing, arguing, and determining pending and future motions. Bradley contends that any imposed stay will not be of a short duration, claiming that a decision by the Federal Circuit in Stauffer will almost certainly lead to a petition for rehearing en banc or else a petition for a writ of certiorari, thus a final decision on Stauffer could take years. Such an indefinite stay, Bradley argues, will only increase the likelihood that evidence will be lost, including the ability of witnesses to recall facts and the preservation of relevant documents.

At issue in this case is whether Bradley, as a qui tam relator, has standing to bring suit under 35 U.S.C. § 292 when her allegations fail to allege a cognizable injury in fact to either the United States or to the public that has been assigned to her by the government. In other words, L'Oreal argues that Bradley's claim is too "conjectural or hypothetical" in nature to suffice for Article III standing (see Doc. 20 - Memorandum in Support of L'Oreal's Motion to Dismiss, p. 8).

If a party does not have standing to bring a suit, the Court will thus lack subject matter jurisdiction over said suit and the case must be dismissed. "Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause." Ex parte McCardle, 7 Wall. 506, 514 19 L.Ed. 264 (1868); Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 94 (1998). In fact, federal courts are "obliged to police the constitutional and statutory limitations on their jurisdiction" and should raise and consider jurisdictional issues regardless of whether the matter is ever addressed by the parties to the suit. See Kreuger v. Cartwright, 996 F.2d 928, 930-31 (7th Cir. 1993); Kanzelberger v. Kanzelberger, 782 F.2d 774, 777 (7th Cir. 1986). Further, the Court of Appeals for the Federal Circuit has exclusive jurisdiction on all appeals involving patents and therefore the decision in Stauffer will serve as binding precedent on this Court regarding the instant suit. See 28 U.S.C. § 1295(a); see also Midwest Industries, Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1359 (Fed. Cir. 1999) ("We apply Federal Circuit law to patent issues in order to serve one of the principal purposes for the creation of this court: to promote uniformity in the law with regard to subject matter within our exclusive appellate jurisdiction.").

As such, the Court finds that because it is likely that the Federal Circuit will issue its opinion regarding the appeal in Stauffer in the near future, the Court finds the anticipated duration of the stay will not be indefinite. The Court will not, however, elect to stay this case past the issuance of the opinion from the Federal Circuit, such as waiting for a constitutional resolution by the United States Supreme Court. Therefore, because the Court will not stay the case for an indefinite duration, Bradley's arguments regarding the possibility that evidence will become lost bear little weight at the moment. Because the ...


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