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Cleversafe, Inc v. Amplidata

November 29, 2012


The opinion of the court was delivered by: Judge John Lee

Magistrate Judge Jeffrey Cole



Pursuant to rules 26 and 37, Federal Rules of Civil Procedure, the defendant moved to strike what it called the plaintiff's "last minute assertion of brand new claims for the '771 Patent in its Local Patent Rule 3.1 Final Infringement Contentions, or, in the alternative, require Cleversafe to pay all of Amplidata's fees and costs associated with researching and preparing Local Patent Rule 3.1 Final Unenforceability and Invalidity Contentions for the newly-asserted claims of the '771 Patent." (Defendant's Motion to Strike Plaintiff's Final Infringement Contentions at 1) [#84]. It is the defendant's contention that the plaintiff waited until the day the final infringement and invalidity contentions were due to notify it that plaintiff was dropping all its claims under the '570 Patent as well as the claims that had previously been asserted under the '771 Patent. In their place the plaintiff substituted new contentions under the '771 Patent that "differ[ed] significantly in scope from the previously asserted claims." (Motion at 2).

In addition to citing Rule 37 as the basis for the motion, the defendant contended that a monetary sanction would serve as a deterrent against future behavior that injects unpredictability in patent infringement cases in this district. See Motion at 11; Reply at 6. [#115]. Deterrence, of course, is precisely the goal of Rule 37. Rickels v. City of South Bend, Indiana, 33 F.3d 785, 786-87 (7th Cir. 1994); United States Freight Co. v. Penn Cent. Transp. Co., 716 F.2d 954, 955 (2nd Cir.1983). In addition, the motion was based on this court's inherent power to enforce its scheduling orders and impose sanctions. (Motion at 6). However, magistrate judges have no inherent Article III powers; they are creatures of statute and have only those powers vested in them by Congress. Reddick v. White, 456 Fed.Appx. 191, 193 (4th Cir. 2011).*fn1

In any event, following discussions with the parties, the defendant, "in the spirit of good will," dropped the component of its motion that sought to strike the supposedly new infringement contentions and agreed only to continue that portion of its motion that sought monetary relief for the amounts expended or to be incurred in responding to the newly asserted claims under the '771 Patent. The parties, at my instigation, "agree[d] that the motions as now amended do not seek dispositive relief and involve only matters that may be "decided" / "determined" by this court under Rule 72(a), Federal Rules of Civil Procedure, and 28 USC §636 (b)(1)(A). [#108]. Further reflection has persuaded me that my assessment was in error, and that the monetary sanction sought is a "dispositive matter" under Rule 72(b) and thus outside my authority to enter an order having immediate effect, reviewable under the clearly erroneous or contrary to law standard. Rather, Seventh Circuit precedent would appear to limit my action to issuing a recommended disposition to Judge Lee reviewable by him de novo. See Rule 72(b).


The History of the Federal Magistrates Act As Applied to

Pretrial Sanctions Issued by Magistrate Judges

The reaction of the courts to the Federal Magistrates Act of 1968, 28 U.S.C. § 636, was mixed, with a number of cases narrowly interpreting the Act. These restrictive decisions prompted Congress to pass extensive amendments to the Act in 1976 which were designed to "'clarify and further define the additional duties which may be assigned to a United States Magistrate...." Gomez v. United States, 490 U.S.858, 867 (1989). The amendments greatly expanded the powers of magistrates "to hear and determine any pretrial matter" except motions for injunctive relief, for judgment on the pleadings, for summary judgment, to dismiss or quash an indictment or information made by the defendant, to suppress evidence in a criminal case, to dismiss or to permit maintenance of a class action, to dismiss for failure to state a claim upon which relief can be granted, and to involuntarily dismiss an action. 28 U.S.C. § 636 (b)(1)(A). This list is not exhaustive. Williams v. Beemiller, Inc., 527 F.3d 259, 265 (2nd Cir. 2008).*fn2

Rule 72, which was designed to implement § 636, introduced the terminology "dispositive" and "not dispositive" to differentiate those pretrial motions that a magistrate judge can decide by an order having independent effect, subject to reconsideration by the district court on a showing that the order is clearly erroneous or contrary to law, 28 U.S.C. § 636 (b)(1)(A); Rule 72(a), *fn3 from those that only allow for a recommended disposition through a report and recommendation having no independent effect, with review being de novo. 28 U.S.C. §636(b)(1)(B) and (C); Rule 72(b).*fn4 The enumerated motions in §636(b)(1)(A) are deemed "dispositive." United States v. Raddatz, 447 U.S. 667, 673 (1980).*fn5 They inform the classification of non-enumerated motions as either dispositive or nondispositive. Phrased differently, for a motion not listed in §636(b)(1)(A) to be deemed "dispositive of a party's claim or defense" under Rule 72, it should be analogous to the eight motions enumerated in 28 USC §(b)(1)(A). See Phinney v. Wentworth Douglas Hosp., 199 F.3d 1, 5 (1st Cir. 1999); Bennett v. General Caster Service of N. Gordon Co., Inc. 976 F.2d 995, 997 (6th Cir.1992). 12 Wright & Miller, Federal Practice and Procedure, §3068 (1997). See, e.g., Williams, 527 F.3d at 265 (a motion to remand is the functional equivalent of an order of dismissal and thus dispositive); Woods v. Dahlberg, 894 F.2d 187, 187 (6th Cir.1990)(per curiam) (denial of motion to proceed in forma pauperis is the functional equivalent of involuntary dismissal and, therefore, dispositive of the plaintiff's claim); Bowers v. University of Virginia, 2008 WL 2346033, 3 (W.D.Va. 2008)("In general, a matter is nondispositive if it does not resolve the substantive claims for relief alleged in the pleadings."). Compare, Gomez, 490 U.S. at 873--74(jury selection in a felony trial is dispositive for purposes of § 636(b)(1) (B) because it is "more akin to those precisely defined, 'dispositive' matters enumerated therein than the 'nondispositive,' pretrial matter[s] governed by §636(b)(1)(A)").

It is not immediately apparent why a pretrial motion for attorney's fees under Rule 37 that seeks to "redress injuries done to put-upon adversaries" in discovery, Sambrano v. Mabus, 663 F.3d 879, 881-882 (7th Cir. 2011), should be classified as dispositive and thus outside the authority of a magistrate judge to "hear and decide."*fn6 Such a motion is not included in the list of dispositive matters in §636(b)(1)(A). If Congress wanted to prohibit magistrate judges from being able to impose monetary sanctions under Rule 37, it could have included that prohibition in the catalog of prohibited matters. That it did not do, it can be argued, is a persuasive datum that it did not intend to take away that power. Cf., Jordan Bldg. Corp. v. Doyle, O'Connor & Co., 401 F.2d 47, 50 (7th Cir. 1968)("Had Congress intended to limit this authority to regulations proscribing common-law fraud, it would probably have said so. We see no reason to go beyond the plain meaning of the word 'any'....").

Moreover, resolution of a pretrial motion for sanctions under Rule 37 would not seem dispositive of a party's claim or defense, at least as those terms are used elsewhere in the Federal Rules of Civil Procedure. For example, Rule 8 refers to a "claim" and a "defense" as a component of a "pleading," which Rule 7 defines as a complaint or answer (or a counterclaim or answer thereto). It is certainly arguable that the drafters of Rule 72 did not, in general, intend the word claim to have a meaning different from that in Rule 8. Cf., Brown v. Gardner, 513 U.S. 115, 118 (1994)(the presumption is that a given term is used to mean the same thing throughout a statute). Cf., Bowers, supra, ("In general, a matter is nondispositive if it does not resolve the substantive claims for relief alleged in the pleadings."). A pretrial motion for attorneys' fees as a discovery sanction under Rule 37 does not seem to fall within that usage. Not surprisingly, Professor Moore was of the view that an issue of sanctions under Rule 37 for discovery disobedience is ...

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