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Solutran, Inc. v. U.S. Bancorp

United States District Court, D. Minnesota

February 26, 2018

Solutran, Inc., Plaintiff,
v.
U.S. Bancorp and Elavon, Inc., Defendants. U.S. Bancorp and Elavon, Inc., Counter-claimants,
v.
Solutran, Inc., Counter-defendant.

          Robert J. Gilbertson, David J. Wallace-Jackson, and Sybil Dunlop, Greene Espel PLLP, for Plaintiff and Counter-defendant.

          Peter M. Lancaster, Ben D. Kappelman, and Kenneth E. Levitt, Dorsey & Whitney LLP and J. Thomas Vitt, Jones Day, for Defendants and Counter-claimants.

          MEMORANDUM OPINION AND ORDER

          SUSAN RICHARD NELSON, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         The Court now rules upon Defendant U.S. Bank's Motion in Limine to Preclude Calling Defendants' Legal Assistant Providing Bank Litigation Support as a Witness or Eliciting Similar Evidence [Doc. No. 231] and Motion in Limine to Exclude Argument that Defendants' Infringement was Willful [Doc. No. 235]. For the reasons stated below, the Court grants the latter motion and denies the former as moot.

         II. BACKGROUND

         On September 25, 2013, Plaintiff filed a Complaint against Defendants, alleging infringement of its United States Patent No. 8, 311, 945 (“'945 patent”). (Compl. [Doc. No. 1].) The deadline to submit motions to amend the pleadings was initially set for September 1, 2014, but it was moved to April 1, 2016 after the case was stayed for a time. (See Pretrial Scheduling Order [Doc. No. 28]; Order dated Sept. 18, 2014 [Doc. No. 50]; Am. Pretrial Scheduling Order [Doc. No. 69].) On November 11, 2016, more than seven months after the deadline for such motions had expired, Plaintiff moved for leave to amend its Complaint. (Solutran's Mot. for Leave to Amend its Compl. [Doc. No. 133].) Plaintiff sought leave to amend its Complaint “to assert a claim of willful infringement” based on discovery indicating that Defendant U.S. Bank had been aware of Plaintiff's patent before Plaintiff filed suit. (Solutran's Mem. in Supp. of its Mot. for Leave to Amend its Compl. [Doc. No. 135], at 1.) Plaintiff's Proposed Amended Complaint would have included new allegations that “Defendants' infringement has been and continues to be willful and showing a reckless disregard for Solutran's intellectual-property rights within the meaning of 35 U.S.C. § 284.” (Aff. of Eric Ernstene [Doc. No. 136], Ex. B [Doc. No. 136-1] (Redline Proposed Am. Compl. ¶ 13).)

         After a hearing, Magistrate Judge Thorson denied Plaintiff's Motion. (See Nov. 29, 2016 Minute Entry [Doc. No. 144]; Text Only Entry [Doc. No. 145].) Plaintiff objected, and the Court affirmed the Magistrate Judge's decision. (Order dated Jan. 10, 2017 [Doc. No. 162].) The Court found that Plaintiff had not shown good cause to amend under Federal Rule of Civil Procedure 16(b)(4). (Id. at 7-10.) Though Plaintiff argued that it did not receive discovery supporting a claim of willful infringement until after the deadline for motions to amend had passed, the Court agreed with the Magistrate Judge that Plaintiff at that time had access to adequate information to know that it could make a claim of willful infringement, or, at least, that it should “make some effort to compel production of relevant discovery, or seek to extend the deadline to amend pleadings.” (Id. at 9.) The parties proceeded to summary judgment, and the Court issued an Order granting summary judgment to Plaintiff on the issue of infringement. (See Order dated Nov. 27, 2017 [Doc. No. 216].)

         Defendant U.S. Bank has filed a Motion in Limine to Exclude Argument that Defendants' Infringement was Willful [Doc. No. 235], claiming that such argument violates the Court's prior Order denying leave to amend, and that willfulness is irrelevant in this case, where the Court has already ruled that Defendants infringed upon Plaintiff's ‘945 patent. Plaintiff responds that it seeks only to offer evidence of post-suit willfulness, which it argues was adequately plead and not foreclosed by the prior order. (Solutran's Resp. to Defs.' Mot. in Lim. to Exclude Evid. and Arg. on Willfulness [Doc. No. 258] (“Pl.'s Willfulness Resp.”), at 2-6.)

         Defendant U.S. Bank has also filed a Motion in Limine to Preclude Calling Defendants' Legal Assistant Providing Bank Litigation Support as a Witness or Eliciting Similar Evidence [Doc. No. 231]. Plaintiff states that it plans to call this legal assistant, Ms. Dayna Munsch, to provide testimony supporting its post-suit willfulness argument. (Tr. of Final Pretrial Conference [Doc. No. 284] (“Tr.”), at 109.) Plaintiff asserts that U.S. Bank's document-retention policy is so lax as to be willfully destructive, and that Ms. Munsch will testify that it resulted in the destruction of discoverable emails. (Solutran's Resp. to Defs.' Mot. in Lim. to Preclude Calling Defs.' Legal Assistant as a Witness or Eliciting Similar Evid. [Doc. No. 259] (“Pl.'s Witness Resp.”, at 2-4).) Plaintiff concedes that, if it is not permitted to argue willfulness to the jury, then it will not seek to call Ms. Munsch and Defendants' Motion to exclude her testimony will be moot. (Tr., at 109.)

         III. DISCUSSION

         Upon a finding of infringement, the law permits the holder of the patent to seek enhanced damages for egregious infringement behavior. 35 U.S.C. § 284; see Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1923, 1932 (2016). The district court has discretion to decide whether willful infringement justifies enhanced damages. Halo, 136 S.Ct. at 1932. The Federal Circuit has held that the Supreme Court's decision in Halo did not change “the established law that the factual components of the willfulness question should be resolved by the jury.” WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016).

         Plaintiff claims that it should be permitted to argue post-suit willfulness because it was adequately plead in Complaint. The Complaint seeks “all damages that are available pursuant to 35 U.S.C. § 284, ” which Plaintiff argues includes enhanced damages for willful conduct after the filing of the suit. (Compl. ¶ 17.d.) The Complaint was filed, of course, at the beginning of the suit, and thus does not include any allegations of willfulness after the initiation of the suit. But when Plaintiff moved to amend the complaint, it sought to add the allegation that Defendants' infringement was and continues to be willful. (See Aff. of Eric Ernstene, Ex. B (Redline Proposed Am. Compl.).) Further, Defendants point out that Plaintiff was aware of U.S. Bank's document-retention policy, which it relied upon to assert post-suit willfulness, before it filed the Motion for Leave to Amend. (Tr., at 98.) The post-suit willfulness argument that Plaintiff makes in opposition to Defendants' Motion in Limine was available when it sought leave to amend its Complaint, but Plaintiff did not make it then. Plaintiff's Motion for Leave to Amend its Complaint was denied, and Plaintiff cannot now seek to change that result. Plaintiff has made no other motion to amend its Complaint to add allegations of post-suit willfulness. For this reason, Defendant U.S. Bank's Motion to exclude evidence of willfulness will be granted.

         Further, even if the post-suit willfulness claim were properly plead, the Court finds that the factual evidence of discovery misconduct that Plaintiff seeks to admit is inadmissible for several reasons. First, the evidence does not seem to support the conclusion that Plaintiff argues that it should be admitted to prove. Plaintiff argues that U.S. Bank's document-retention policy, which instructs employees to forward emails relevant to a litigation hold into a separate mailbox, permitted the destruction of discoverable documents related to the infringement of Plaintiff's patent. (Pl.'s Witness Resp., at 2-5.) Because attempting to cover up infringement is one factor that can be considered to evaluate a claim of willfulness, Plaintiff asserts that Ms. Munsch's testimony supports its argument of post-suit willfulness. (Id. at 5 (citing Fed. Circuit Bar Ass'n, Model Patent Jury Instructions, No. 3.10 (2016)).) But Plaintiff admits that this was U.S. Bank's “standard document-retention policy, ” and it provides no evidence to show that the document-retention policy was ...


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