United States District Court, D. Minnesota
Solutran, Inc. Plaintiff,
U.S. Bancorp and Elavon, Inc., Defendants. U.S. Bancorp and Elavon, Inc. Counter-claimants,
Solutran, Inc. Counter-defendant.
J. Wallace-Jackson, Robert J. Gilbertson, and Sybil L.
Dunlop, Greene Espel PLLP, for Plaintiff and
Kappelman, J. Thomas Vitt, Kenneth E. Levitt, and Peter M.
Lancaster, Dorsey & Whitney LLP, for Defendants and
MEMORANDUM OPINION AND ORDER
RICHARD NELSON, United States District Judge
matter comes before the Court on Plaintiff's Objections
[Doc. No. 148] to an order of the magistrate
judge denying its motion for leave to amend its
complaint. (See Nov. 30, 2016 Text Only Order [Doc.
No. 145].) For the reasons stated below, Plaintiff's
objections are overruled, and the order is affirmed.
purposes of this Order, the Court will recite only such facts
as are necessary to resolve the present matter. Stated
briefly, this patent infringement action arises out of
allegations that Defendants have infringed various method
claims of U.S. Patent 8, 311, 945 (the “'945
patent”), which was issued to Plaintiff Solutran, Inc.
(“Solutran”) on November 13, 2012. (Compl. [Doc.
No. 1] ¶¶ 10, 16.) Solutran filed suit on September
25, 2013. (See generally id.) Although the Complaint
alleges that Defendants have had actual knowledge of the
'945 patent since at least the date the Complaint was
served upon them, Solutran did not at that time assert a
claim for willful infringement. (See Id. at ¶
15.) Defendants duly filed their Answer on November 12, 2013,
denying infringement of the '945 patent and seeking
declaratory judgments of noninfringement and invalidity.
(See generally Answer [Doc. No. 9].) With the
parties' input, Magistrate Judge Steven E. Rau entered an
initial scheduling order on May 30, 2014. (See
generally Pretrial Scheduling Order [Doc. No. 28].)
Among other deadlines, Judge Rau stated that any motions to
amend the pleadings must be filed no later than September 1,
2014. (Id. at 6.)
weeks later, on July 10, 2014, Solutran filed a motion to
compel discovery. (See generally Pl.'s Mot. to
Compel. [Doc. No. 29].) In particular, Solutran sought
responses to a number of interrogatories and document
requests intended to determine when Defendants first became
aware of the '945 patent. (See Ernstene Aff.
[Doc. No. 136], Ex. C.) Importantly however, Solutran did not
at that time (or at any time) seek written discovery
concerning the date Defendants became aware of Solutran's
patent application. In any event, before a hearing
could be held on Solutran's motion to compel, Defendants
filed a motion to stay the case pending resolution of a
Covered Business Method (“CBM”) proceeding before
the United States Patent and Trademark Office's Patent
Trial and Appeal Board (“PTAB”). (See
generally Defs.' Mot. to Stay [Doc. No. 37].) In
light of Defendants' motion, Judge Rau denied
Solutran's motion to compel without prejudice, and stayed
the case. (See generally Sept. 15, 2014
Text Only Order [Doc. No. 49]; Sept. 18, 2014 Order [Doc. No.
patent ultimately survived CBM review, and, after some back
and forth between the parties regarding the propriety of
lifting the stay,  Judge Thorson ordered proceedings to
resume on January 12, 2016. (See Jan. 12, 2016 Text
Only Order [Doc. No. 62].) From that point on, the parties
were free to pursue past discovery requests and to serve new
discovery requests immediately. Further, although the
deadline to amend the pleadings had technically expired on
September 1, 2014-before the stay took effect-the magistrate
judge adopted the parties' joint proposal that the
deadline be reset for April 1, 2016. (See Am.
Pretrial Scheduling Order [Doc. No. 69] at 8.) Over the
following months, the parties submitted numerous statements
and other filings to the Court regarding discovery. Although
at times the parties requested extensions of various
deadlines relating to discovery, at no point did either party
request further adjustment of the deadline for amended
pleadings. (See, e.g., Stipulation and Joint Mot. to
Modify Scheduling Order [Doc. No. 74].)
September 19, 2016, Defendants sought leave to amend their
invalidity charts in light of their discovery of documents
allegedly demonstrating that the '945 patent had been
anticipated and rendered obvious by various prior art
systems. (See generally Defs.' Mem. in Supp. of
Mot. to Amend [Doc. No. 101].) Solutran opposed this motion,
noting that the request came more than four months after the
deadline to amend invalidity contentions had passed, and that
Defendants had not shown good cause to justify the late
amendment. (Pl.'s Mem. in Opp. [Doc. No. 104] at 10-11.)
In particular, Solutran argued that Defendants had not shown
diligence in either discovering the basis for the requested
amendment, or in promptly seeking to amend once that basis
had been uncovered. (Id.) The magistrate judge
agreed with Solutran, and on appeal of that order this Court
affirmed. See Solutran, Inc. v. U.S. Bancorp, No.
13-cv-2637 (SRN/BRT), 2016 WL 7377099 (D. Minn. Dec. 20,
more than a month later, however, Solutran in turn filed the
present motion to amend its complaint. (See
generally Pl.'s Mot. to Amend [Doc. No. 133].)
Although the filing came more than seven months after the
deadline to amend pleadings had passed, Solutran argued that
Defendants had failed to produce relevant documents until
August and September 2016, and that these documents were the
first to demonstrate a plausible inference of Defendants'
pre-suit knowledge of the '945 patent. (See
Pl.'s Mem. in Supp. of Mot. to Amend [Doc. No. 135] at
2.) Specifically, Solutran identified evidence showing that
Defendants had been aware of its patent application since at
least 2007, that they had hired legal counsel to assess the
patent application, and that they may have continued to track
the progress of the application. (Id. at 4-9.)
Solutran argued that because they could not have amended
their complaint without first uncovering these facts, they
had demonstrated good cause for the late motion to amend.
(Id. at 11-14.)
Thorson heard oral argument on Solutran's motion on
November 29, 2016, and ruled on the matter the same day.
(See Nov. 29, 2016 Minute Entry [Doc. No. 144].)
Noting that leave to amend should only be granted where the
movant has shown diligence in attempting to comply with the
deadlines set forth by the Court's scheduling order, the
magistrate judge concluded that the new information cited by
Solutran was not so materially different from information
previously in its possession so as to justify a delay in
moving either to amend or to extend the deadline to amend.
(Hr'g Tr. [Doc. No. 147] at 42:12-25; 49:12-21.) Because
Judge Thorson found it clear that good cause to amend was not
present, she declined to consider the issues of futility or
prejudice to Defendants. (Id. at 50:21-23.)
timely filed objections to the magistrate judge's ruling
on December 13, 2016, triggering this review of the matter.
(See generally Pl.'s Obj.)