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Bon-Aire Industries, Inc. v. Viatek Consumer Products Group, Inc.

United States District Court, D. Idaho

May 13, 2014

BON-AIRE INDUSTRIES, INC., Plaintiff,
v.
VIATEK CONSUMER PRODUCTS GROUP, INC., a Florida Corporation, and JOHN DOES 1-X, Defendant.

MEMORANDUM DECISION AND ORDER

EDWARD J. LODGE, District Judge.

Pending before the Court in the above-entitled matter is Plaintiff's Motion to Dismiss and/or Strike Defendant's Counterclaims and Affirmative Defenses for Lack of Subject Matter Jurisdiction. (Dkt. 13.) The Motion is made pursuant to Federal Rule of Civil Procedure 12(b)(1). The Defendants have responded to the Motion and the time for the filing of any reply brief has passed. The matter is now ripe for the Court's consideration. Having fully reviewed the record herein, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, this Motion shall be decided on the record before this Court without oral argument.

STANDARD OF LAW

Federal courts are courts of limited jurisdiction and, until proven otherwise, cases lie outside the jurisdiction of the court. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377-78 (1994). A motion to dismiss made pursuant to Federal Rule of Civil Procedure 12(b)(1) challenges the subject matter jurisdiction of the Court. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039-40 (9th Cir. 2003). A Rule 12(b)(1) jurisdictional attack may be either facial or factual. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000).

A "facial" attack is one where the defendant attacks the sufficiency of the allegations supporting subject matter jurisdiction. See Thornhill Publ'g Co., Inc. v. General Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979). In a facial attack, the complaint is challenged as failing to establish federal jurisdiction, even assuming all the allegations are true and construing the complaint in the light most favorable to plaintiff. See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004); see also Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1988) (When considering a "facial" attack made pursuant to Rule 12(b)(1), courts consider the allegations of the complaint to be true and construe them in the light most favorable to the plaintiff.). In a facial attack, the challenge is as to the sufficiency of the allegations of subject matter jurisdiction in the Counterclaims. Love, 915 F.2d at 1245. The review of such a motion is similar to that of a Rule 12(b)(6) motion - the allegations of the complaint are taken as true and all reasonable inferences are drawn in favor of the movant. Id.

By contrast, in a factual attack, the challenger provides evidence that an alleged fact is false resulting in a lack of subject matter jurisdiction. Safe Air for Everyone, 373 F.3d at 1039. A "factual" attack challenges "the existence of subject matter jurisdiction in fact." Thornhill, 594 at 733. For a factual challenge, the allegations are not presumed to be true and "the district court is not restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction." McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988). "Once the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction." Savage, 343 F.3d at 1039 n. 2. When considering a factual attack on subject matter jurisdiction, "the district court is ordinarily free to hear evidence regarding jurisdiction and to rule on that issue prior to trial, resolving factual disputes where necessary." Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983) (citing Thornhill, 594 F.2d at 733). "[N]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Thornhill, 594 F.2d at 733 (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)).

DISCUSSION

In this Motion, Plaintiff, Bon-Aire Industries, Inc. ("Bon-Aire"), challenges the subject matter jurisdiction as to eight of the Defendant's, Viatek Consumer Products Group, Inc. ("Viatek"), Counterclaims. (Dkt. 13-1 at 3.) Specifically, Bon-Aire argues the First, Second, Third, Fourth, Fifth, Sixth, Ninth, and Tenth Counterclaims for declaratory relief should be dismissed because none of the facts plead by Viatek, individually or together, establish a case or controversy over the patents in those eight Counterclaims since Bon-Aire has not alleged any infringement of those eight patents in its own claims. (Dkt. 13-1 at 2.) Viatek counters arguing that a case or controversy does exist as to the eight Counterclaims because even if Bon-Aire has not asserted infringement of those patents in its own claims, Bon-Aire has undertaken sufficient actions as to the eight other patents to create a definite and concrete dispute of an adverse legal interest between the patents. (Dkt. 17.) As evidence of the actions taken by Bon-Aire showing its intention to assert and enforce its patent rights, Viatek points to Bon-Aire's filing of this infringement action and Bon-Aire's comments made during discussions between the parties' counsels in this matter. (Dkt. 17.)

The Declaratory Judgment Act, in relevant part, provides:

In a case of actual controversy within its jurisdiction... any court in the United States... may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.

28 U.S.C. ยง 2201(a) (2000). "The phrase a case of actual controversy' refers to the types of cases' and controversies' that are justiciable under Article III of the Constitution." 3M Co. v. Avery Dennison Corp., 673 F.3d 1372, 1376 (Fed. Cir. 2012) (citation omitted).[1]

Article III's case or controversy clause requires

that the dispute be definite and concrete, touching the legal relations of parties having adverse legal interests; and that it be real and substantial and admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.

MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (quoting Aetna Life Ins. v. Haworth, 300 U.S. 227, 240-41 (1937))); see Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1339 (Fed. Cir. 2008) (The claim "must be based on a real and immediate injury or threat of future injury that is caused by the defendants-an objective standard that cannot be met by a purely subjective or speculative fear of future harm."). Stated differently, "the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." 3M, 673 F.3d at 1376 (quoting MedImmune, 549 U.S. at 127 (citation omitted)). In patent cases, declaratory judgment jurisdiction exists "where a patentee asserts rights under a patent based on certain ...


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