MyMail, Ltd. v. America Online, Inc.
MyMail, Ltd. v. America Online, Inc.
Opinion of the Court
MEMORANDUM OPINION AND ORDER
Before the Court is Defendants’ Netzero, Inc., Juno Online Services, Inc., and Net-brands, Inc. (collectively “the UOL Defendants”) Motion to Sever and Transfer Venue and Brief in Support (Docket No. 58). The UOL Defendants ask the Court to sever the claims against them under Federal Rule of Civil Procedure 21 and transfer those claims to the Central District of California under 28 U.S.C. § 1404(a). Having considered the parties’ written submissions, the Court finds that the motion should be DENIED.
BACKGROUND
MyMail, Ltd. (“MyMail”) is the assignee of all rights, title, and interest in United States Patent No. 6,527,290 (the “’290 patent”), which describes a method and apparatus for accessing a computer network by a roaming user. MyMail has sued America Online, Inc., AT & T Corp., Netzero, Inc., Juno Online Services, Inc., Netbrands, Inc., Earthlink, Inc., and SBC Communications, Inc. claiming they infringe this patent. Verizon Communications Inc. was also sued, but has been voluntarily dismissed without prejudice (Docket No. 75).
The UOL Defendants are all subsidiaries of United Online, Inc. with headquarters in Los Angeles, California. The UOL Defendants responded to MyMail’s claims by denying infringement, asserting various affirmative defenses, and bringing their own counterclaims alleging that the ’290 patent is invalid. In the instant motion, the UOL Defendants ask the Court to sever the claims against them from the claims against the other defendants and transfer the severed claims to the Central District of California.
MOTION TO SEVER
Rule 20(a)
A plaintiff may join defendants in one action if there is asserted against them “any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all defendants will arise in the action.” Fed. R. Civ. P. 20(a). The Federal Rules of Civil Procedure give courts authority to sever parties during any stage of the proceeding and on such terms as are just. Fed. R. Civ. P. 21. A court may use Rule 21 to sever properly joined parties or to cure improperly joined parties.
The UOL Defendants argue that they have been improperly joined because the claims against them do not arise out of the same transaction or occurrence or series of transactions or occurrences as the other defendants. The UOL Defendants urge the Court to follow a handful of district court cases that purportedly hold acts of infringement by separate defendants do not satisfy the same transaction requirement.
Transactions or occurrences satisfy the series of transactions or occurrences requirement of Rule 20(a) if there is some connection or logical relationship between the various transactions or occurrences. Hanley v. First Investors Corp., 151 F.R.D. 76, 79 (E.D.Tex. 1993). A logical relationship exists if there is some nucleus of operative facts or law. Id. Neither side disputes that questions of law or fact common to all defendants will arise in this case. The legal question as to the ’290 patent’s scope is common to all the defendants. MyMail alleges that all defendants have infringed the ’290 patent.
The UOL Defendants urge the Court to adopt the rule that infringement by different defendants does not satisfy Rule 20’s same transaction requirement, but the Court finds‘that this interpretation of Rule 20 is a hypertechnical one that perhaps fails to recognize the realities of complex, and particularly patent, litigation. In essence, the UOL Defendants advocate a rule that requires separate proceedings simply because unrelated defendants are alleged to have infringed the same patent. The Court disagrees with such a per se rule that elevates form over substance. Such an interpretation does not further the goals of Rule 20, especially for discovery and motion purposes. It is possible that severance could be appropriate if the defendants’ methods or products were dramatically different. Here, the record before the Court does not show that the products or methods at issue are so different that determining infringement in one case is less proper or efficient than determining infringement in multiple cases.
Four of the cases cited by the UOL Defendants are not incompatible with the Court’s holding.
For the reasons given above, at this point, the Court finds that there is a nucleus of operative facts or law in the claims against all the defendants and, therefore, the claims against the UOL Defendants do arise out of the same series of transactions or occurrences as the claims against the other defendants. As such, the UOL Defendants are properly joined parties under Rule 20. When discovery is complete, the Court, upon motion of a party, will determine whether the state of the evidence compels severance of some type under Rule 21.
Rule 21
Even though the Court has found that severance is not required here to correct misjoinder, the Court may still sever the UOL Defendants under Rule 21. A court may sever properly joined parties on such terms as are just. Fed. R. Civ. P. 21. The joinder rules were created to increase judicial efficiency by allowing related claims against different parties to be tried together. “Under the [Federal Rules of Civil Procedure], the impulse is toward entertaining the
CONCLUSION
As stated, the Court finds that the UOL Defendants have been properly joined under Rule 20 and DENIES the motion to sever. Because the Court DENIES the motion to sever, it also DENIES the UOL Defendants’ transfer motion.
. The UOL Defendants cite Philips Elecs. N. Am. Corp. v. Contec Corp., 220 F.R.D. 415 (D.Del. 2004); Pergo, Inc. v. Alloc, Inc., 262 F.Supp.2d 122 (S.D.N.Y. 2003); Androphy v. Smith & Nephew, Inc., 31 F.Supp.2d 620 (N.D.Ill. 1998); N.J. Machine Inc. v. Alford Indus. Inc., No. Civ. A. 89-1879(JCL), 1991 WL 340196 (D.N.J. Oct. 7, 1991); Paine, Webber, Jackson & Curtis, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 564 F.Supp. 1358 (D.Del. 1983).
. The court in Pergo does seem to adopt the per se rule that this Court disagrees with for the reasons given above. See Pergo, Inc., 262 F.Supp.2d at 127-28.
. Philips can be further distinguished because that court also held that severance was necessary to prevent unfair prejudice to a defendant because its co-defendant had chosen not to put on its own defense. Philips Elecs., 220 F.R.D. at 418.
Reference
- Full Case Name
- MYMAIL, LTD. v. AMERICA ONLINE, INC., AT & T Corp., Netzero, Inc., Juno Online Services, Inc., Netbrands, Inc., Earthlink, Inc., and SBC Communications, Inc.
- Cited By
- 32 cases
- Status
- Published