Opinion
Civil Action No. 99-482 (AMW).
Dated: September 30, 1999
OPINION
Before the Court is defendant's motion for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure against the plaintiff, Garry L. Caputo, and his attorney, David H. E. Bursik. The Court heard oral argument on September 13, 1999. For the reasons set forth below, defendant's motion is denied without prejudice.
Background
This is a motion by defendant for the imposition of sanctions under Rule 11 of the Federal Rules of Civil Procedure ("Rule 11"). It stems from a claim by plaintiff Garry Caputo for infringement of his patent relating to a forming roller used to manufacture air cushioning material — or "bubble wrap," as it is commonly called.
The dispute between these two parties had its beginnings over eight years ago. Sealed Air Corporation ("Sealed Air") is a manufacturer of bubble wrap. Mr. Caputo is the inventor of the forming roller embodied in U.S. Patent 4,579,516 (the "'516 patent") and owner of the patent. On June 4, 1991, Mr. Caputo's attorney, David H.E. Bursik, wrote to Sealed Air Corporation alleging that Sealed Air was infringing on the '516 patent. Counsel for Sealed Air responded to Mr. Bursik on July 9, 1991, and denied that there was any infringement. No legal action was taken at that time, and no basis for plaintiff's allegation was ever set forth.
Seven and a half years later, on January 26, 1999, Mr. Bursik again wrote to Sealed Air on behalf of Mr. Caputo alleging infringement of the '516 patent. A week later, on February 2, 1999, plaintiff filed the complaint in the present action. As set forth in the certifications of Mr. Caputo and Mr. Bursik, the basis for plaintiff's latest allegation of infringement is Mr. Caputo's analysis of the characteristics of various samples of bubble wrap produced by Sealed Air in several different years.
Discussion
Rule 11 states in the relevant part:
By presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, —
(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.
The purpose of Rule 11 is to deter groundless filings and streamline the administration and procedure of the courts. Cooter Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990). Under the rule, an attorney has a duty to certify that he or she has conducted a reasonable inquiry and that any filing with the court is "well grounded in fact, legally tenable, and `not interposed for any improper purpose.'" Id.
Defendant contends that, prior to filing the complaint, neither plaintiff nor his attorney conducted a proper inquiry, as required by the Rule, to determine whether the allegations in the complaint had a sufficient basis in fact. With respect to plaintiff's attorney, Sealed Air charges that Mr. Bursik failed to discharge his Rule 11 duty of reasonable inquiry because he relied on "his client's lay opinion of infringement" as a basis for filing the complaint. See S. Bravo Sys. v. Containment Tech. Corp., 96 F.3d 1372, 1375 (Fed. Cir. 1996) (sanctions are appropriate where attorney conducted no investigation of the factual and legal merits of the case other than to rely on his client's lay opinion). Prior to commencing this lawsuit, Mr. Bursik reviewed with Mr. Caputo the claims of the '516 patent and relied primarily upon Mr. Caputo's assessment of the features of defendant's forming rolling as a basis for maintaining the claim of infringement. See Bursik Cert. ¶ 4.
Mr. Caputo asserts that he is an expert in the production of bubble wrap and the machinery used to produce it. He sets forth in his certification over thirty-six years of experience in the development of packaging products and thirty years of hands-on experience with machinery design and engineering and thermo-plastic film engineering. Sealed Air does not dispute Mr. Caputo's qualifications. Therefore, this Court cannot conclude, merely based on the evidence before it at this time, that it was unreasonable for Mr. Bursik to consider Mr. Caputo an expert and, in evaluating the merits of an infringement claim, give significant consideration to Mr. Caputo's opinion.
Defendant also argues that plaintiff's pre-filing investigation was deficient because neither plaintiff nor his attorney directly examined Sealed Air's machinery to compare the actual device to the claims of the '516 patent. In support of its charge, defendant cites Judin v. United States, 110 F.3d 780 (Fed. Cir. 1997). In Judin, the court found that where the plaintiff simply observed the allegedly infringing product's external characteristics and took no steps to examine the device more closely, a proper inquiry had not been conducted and Rule 11 sanctions were appropriate.
In the present case, although plaintiff has not directly examined Sealed Air's allegedly infringing machinery, plaintiff has examined and compared the features of various samples of Sealed Air's bubble wrap produced by such machinery over the past several years. Plaintiff claims that because features of the bubble wrap product reveal the nature of the forming roller used to manufacture the product, the examination of the bubble wrap product provides a sufficient basis to allege infringement. Defendant, on the other hand, argues that it is impossible to determine the composition of a forming roller by merely examining the characteristics of the product produced by it. Defendant may very well be correct, but it is not possible for the Court to make that determination without additional facts.
As stated in the Advisory Committee Notes to Rule 11, "[t]he time when sanctions are to be imposed rests in the discretion of the trial judge." However, these Advisory Committee Notes contemplate "that in the case of pleadings the sanctions issue under Rule 11 normally will be determined at the end of the litigation." This is to ensure that all relevant facts are before the court. See Bannon v. Joyce Bev. Inc., 113 F.R.D. 669, 671 (N.D.Ill. 1987). All facts relevant to whether plaintiff's pre-filing inquiry was reasonable and sufficient are not yet before this Court. Without further evidence it cannot be determined whether an examination of the bubble wrap product instead the device that produced it is adequate to reveal the nature of the forming roller in such a device. In order to make such a factual determination at this early stage of the case, the Court would need to conduct an evidentiary hearing. The Court concludes that such a course would deny the parties' rights to discovery and would supplant defendant's ability to file a motion for summary judgment, should the facts unfold as its counsel suggests.
No discovery has been had in this case to date. "Whether a case is well grounded in fact will often not be evident until a plaintiff has been given a chance to conduct discovery." Runfola Assoc. v. Spectrum Reporting II, Inc., 88 F.3d 368, 372 (6th Cir. 1996). Defendant may renew its motion when the parties, through discovery, have had a chance to develop the record so that the Court may have the necessary facts before it to determine if sanctions are warranted.
Conclusion
For the reason's stated above, plaintiff's motions for sanctions pursuant to Federal Rule of Civil Procedure is denied without prejudice. An appropriate order follows.
ORDER
Before the Court is defendant's motion for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure against the plaintiff, Garry L. Caputo, and his attorney, David H. E. Bursik. The Court heard oral argument on September 13, 1999. For the reasons set forth in the attached opinion,
IT IS on this 30 day of September, 1999
ORDERED that defendant's motion for sanctions is DENIED WITHOUT PREJUDICE.