United States District Court, D. Idaho
J.R. SIMPLOT COMPANY, Plaintiff,
McCAIN FOODS USA, INC., Defendant. McCAIN FOODS LIMITED, Plaintiff,
J.R. SIMPLOT COMPANY, Defendant.
MEMORANDUM DECISION AND ORDER
C. Nye Chief U.S. District Court Judge.
before the Court is Plaintiff J.R. Simplot Company's
(“Simplot”) Motion for Leave to File Third-Party
Complaint (Dkt. 88), Defendant McCain Foods Limited's
(“McCain”) Motion to Compel (Dkt. 93) and
Simplot's Motion to Amend/Correct Protective Order (Dkt.
98). Having reviewed the record and briefs, the Court finds
that the facts and legal arguments are adequately presented.
Accordingly, in the interest of avoiding further delay, and
because the Court finds that the decisional process would not
be significantly aided by oral argument, the Court will
decide the Motions without oral argument. Dist. Idaho Loc.
Civ. R. 7.1(d)(1)(B). For the reasons set forth below, the
Court finds good cause to GRANT Simplot's Motion for
Leave to File Third-Party Complaint, GRANT in PART and DENY
in PART McCain's Motion to Compel, and GRANT
Simplot's Motion to Amend/Correct Protective Order.
January 11, 2019, the Court issued its Memorandum Decision
and Order (Dkt. 86) granting McCain's Motion for Partial
Reconsideration. In its Motion to Reconsider, McCain
petitioned the Court to revisit its Markman
definition of the term “high electric field.”
Dkt. 70. Ultimately, the Court did redefine the term to more
fully align with the purpose of the patent rather than
relying on examples, or a preferred embodiment, to restrict
the construction of the term-as it had originally.
January 24, 2019, Simplot Filed a Motion for Leave to File a
Third-Party Complaint. Dkt. 88. In its Motion, Simplot seeks
to file a Third-Party Complaint against Elea
(“Elea”) and Food Physics, LLC (Food
February 21, 2019, McCain notified the Court that the parties
had reached an impasse regarding certain discovery
matters-namely the disclosure and/or protection of certain
financial information. Pursuant to the Court's standard
practice regarding discovery disputes, the parties submitted
position papers outlining their respective concerns and a
telephonic mediation was held in an effort to informally
resolve the matters. Ultimately, both parties elected-as was
their prerogative-to move forward with formal motions after
the informal mediation proved unsuccessful. McCain filed a
Motion to Compel, asking the Court to require that Simplot
turn over the sought-after information, and Simplot filed a
Motion to Amend/Correct the Protective Order asserting that
it would only turn over the requested information if there
were substantial protections in place.
Court will address each Motion in turn.
Simplot's Motion for Leave to File a Third-Party
Complaint (Dkt. 88)
February 21, 2017, McCain filed its Complaint for Patent
Infringement against Simplot in the Northern District of
Illinois. On August 9, 2017, the Northern District of
Illinois transferred McCain's lawsuit to this District,
and on November 9, 2017, the Court granted McCain's
Motion to Consolidate its lawsuit with a pending action for
design patent infringement and trade dress infringement that
Simplot had previously filed against McCain. Dkt. 40.
patent infringement portion of this case, McCain alleges that
Simplot directly infringed U.S. Patent No. 6, 821, 540
(“the ‘540 Patent”) by using Elea PEF
Systems in the United States to treat fruits and vegetables.
however, does not design or manufacture any of the Elea PEF
Systems accused of infringement. In fact, Simplot purchased
four of the accused Elea PEF Systems directly from Elea and
one accused Elea PEF System from Elea's exclusive North
American Distributor, Food Physics. Simplot asserts that it
purchased the accused Elea PEF Systems based on: (1) Elea and
Food Physics' express warranty that the ELEA PEF Systems
do not infringe any third party's patent, including the
‘540 Patent; and (2) Elea and Food Physics'
agreement to defend, indemnify, and hold Simplot harmless
from any claim of infringement, including claims for
infringement of the ‘540 Patent, based on Simplot's
use of the Accused Elea PEF Systems.
alleges that it notified Elea and Food Physics of the McCain
Complaint and the allegations therein, and further, that it
demanded indemnity and defense pursuant to the terms of the
Equipment Furnish Only Purchase Contracts signed between
Simplot, Elea, and Food Physics. According to Simplot, Elea
and Food Physics have not agreed to assume their indemnity
obligations and have not agreed to defend Simplot against
McCain's infringement claims.
January 23, 2019, Simplot filed a separate lawsuit against
Elea and Food Physics to pursue these indemnity claims. That
suit, No. 1:19-cv-00024, is currently pending before United
States Magistrate Judge Candy W. Dale. Judge Dale has stayed
her case in light of Simplot's Motion for Leave to File
Third-Party Complaint in this case-which Simplot filed the
day following the filing of the independent case against Elea
and Food Physics. Simplot reasons that allowing a third-party
Complaint in this case makes the most sense, but states that
in the event the Court denies its request, it will
nonetheless pursue its claims independent of this litigation.
Similarly, if the Court grants the instant request, Simplot
asserts that it will voluntarily dismiss its companion suit
pending before Judge Dale.
impleader provision of Federal Rule of Civil Procedure 14
allows a defendant to “serve a summons and complaint on
a nonparty who is or may be liable to it for all or part of
the claim against it.” Fed.R.Civ.P. 14(a)(1). The
purpose of impleader is to “promote judicial efficiency
by avoiding separate actions against third parties who may be
liable to defendant for part or all of a plaintiff's
original claim.” Whitt v. Papa Murphy's
Int'l, LLC, No. 1:18-CV-00231-BLW, 2018 WL 6310265,
at *1 (D. Idaho Dec. 3, 2018) (internal citation omitted);
see also Huntsman Advanced Materials LLC v. OneBeacon Am.
Ins. Co., No. 1:08-CV- 00229-BLW, 2012 WL 5285901, at *2
(D. Idaho Oct. 25, 2012). Impleader is appropriate where
“a defendant is attempting to transfer to the
third-party defendant the liability asserted against him by
the original plaintiff.” Whitt, 2018 WL
6310265, at *1 (quoting Stewart v. Am. Int'l Oil 7
Gas Co., 845 F.2d 196, 200 (9th Cir. 1988)).
decision to implead a third-party defendant is addressed to
the sound discretion of the trial court.” Sw.
Administrators, Inc. v. Rozay's Transfer, 791 F.2d
769, 777 (9th Cir. 1986); Huntsman, 2012 WL 5285901,
at *2-3. In exercising discretion whether to grant leave to
file a third-party complaint, courts have considered a number
of factors, including: (1) timeliness of the motion; (2)
whether impleader would delay or unduly complicate the trial;
(3) prejudice to the third party; and (4) prejudice to the
“original plaintiff.” Id., see also
Zero Tolerance Entm't, Inc. v. Ferguson, 254 F.R.D.
123, 127 (C.D. Cal. 2008); 6 Fed. Prac. & Proc. Civ
§ 1443 (3d ed.).
turning to specific factors, the Court will address
Simplot's overarching argument that judicial economy
favors granting its Motion for Leave to File Third-Party
Complaint. As this Court noted previously in this case,
“avoiding duplicative work, unnecessary expense to
clients, inconsistent results, and excessive use of judicial
resources” is of paramount importance. The Court made
that determination in relation to the issue of consolidation,
but the reasoning rings true here as well-and to some degree,
interpleader is consolidation. Here, Elea and Food Physics
are already involved in this case. While their degree of
involvement is not as significant as it will undoubtedly be
if joined as third-party Defendants, allowing Simplot to
litigate these related issues in this lawsuit would conserve
current case and underlying design and utility patent
infringement claims, as well as the trade dress infringement
claim, are complicated issues. This Court is deeply invested
in those issues and while the new allegations against Elea
and Food Physics are not identical claims per se-they are,
after all, essentially just contract claims about
patent infringement indemnity-this Court is in a good
position to take those issues up with limited additional work
Court is keenly aware of the parties, facts, legal issues,
and rulings applicable in this case. While Judge Dale is
undoubtedly qualified to hear such a case, a separate lawsuit
is unnecessary as this Court could quite easily address an
ancillary issue related to indemnification. Finally, the
whole issue of indemnification is interwoven with the issue
of infringement itself and may or may not even become
relevant. This Court will be at the forefront of those
determinations and is best suited to address the issue-again,
should it even arise.
Court will briefly address some of the guiding factors
Timeliness of the Motion
argues that Simplot's Motion is untimely because 1) it
could have filed such a motion sooner, and 2) allowing
amendment at this stage will inevitably delay trial.
the issues up in reverse order, the Court finds McCain's
“trial date” argument meritless as no trial date
is set in this matter. Discovery is ongoing at this point and the
dispositive motion deadline is many months away. With the
relatively simply issues at play between Simplot and Elea, it
is unlikely that further extensions of any deadlines will be
necessary-at least for those reasons.
sure, Simplot's actions should not unduly, or unfairly,
prejudice McCain, but Simplot is within its right to bring in
a potentially liable party to defend itself against
McCain's claims of infringement. Further, it will be up
to Simplot to timely and efficiently undertake preparation
for its claims against Elea. Simplot asserts that the
discovery related to its Third-Party claims is
“minimal” and can likely be completed within the
already set timeframe. The Court is not sure if this is
possible or not, but again, a 4-8 week delay (for example) in
this case is still a far cry from the resources that would be
necessary to conduct separate litigation and
aside trial dates, stays, and calendaring, the Court finds
that Simplot filed this Motion as soon as it became
reasonably necessary. Simplot has been diligently litigating
this matter. Early on in this case-and particularly following
the Court's original Markman decision-Simplot
was operating under the impression that its use of the PEF
technology did not even qualify as a protected use
under the ‘540 patent. While that position-or a
variation of that position-might yet prevail in one form or
another, following the Court's reversal of its definition
of the disputed claim term “high electric field,
” Simplot determined that now was the appropriate time
to bring Elea and Food Physics into this suit. In fact, it
was a mere 13 days after the Court's Decision on
McCain's Motion to Reconsider when Simplot filed its
Motion for Leave to Filed a Third-Party Complaint.
things considered, the Court finds that Simplot's Motion
was timely filed.
Complication of issues/trial
the Court turns to the issue of confusion. Simplot asserts
that its third-party complaint will not result in confusion
because the additional issues-unlike complex patent
matters-are simple contractual disputes. Simplot further
claims that interpleader will actually simplify trial as it
will illicit answers to inevitable jury questions regarding
Elea's liability or defense. The Court is not entirely
sure that a jury would understand third-party indemnification
in patent cases as a matter of course, but can appreciate
Simplot's position that with overlapping witnesses and
testimony, it would be expedient to try the issues together.
part, McCain asserts that including these issues with the
underlying patent claims will complicate the structure of the
trial and confuse the jury. McCain's main concern seems
to be that Simplot's third-party claims may mislead a
jury into thinking that Elea and Food Physics' products
are what directly infringed on the ‘540 patent rather
than Simplot's use of those products and its process
(wherein potential infringement actually lies).
counters that it fully understands the difference between
products and processes and notes that its agreement with Elea
and Food Physics warrantied that Simplot's use
would not infringe any patent-i.e. it is Simplot's
position that the patented process is what Elea and Food
Physics must indemnify it from in the first place. Whether a
jury would conflate products and processes is ultimately
irrelevant because, as Simplot notes, the Court can clear up
“any confusion that could otherwise occur as a result
of impleading Elea and Food Physics.” Dkt. 91, at 11.
That said, the parties are likewise responsible for ensuring
that misunderstanding and error do not occur during trial.
McCain may have concerns regarding potential confusion at
trial, it will have a full and fair opportunity to explain
and clarify anything it fears may be unclear. As the Court
noted previously, “juries frequently hear cases is
which various claims require different evidence, testimony,
and even standards of proof. With appropriate preparation,
the Court can adequately instruct a jury to avoid any
confusion.” Dkt. 40, at 5.
sure, this final concern-jury confusion-is the subject of
McCain's request that, in the event the Court allows
Simplot to file its third-party complaint, it should
nonetheless sever, or bifurcate, these claims and try them
such a course of action would (at least to some small degree)
defeat the purpose of interpleader. While the Court would be
the same, holding two trials would still result in added time
importantly, however, there are ways to alleviate
McCain's concerns short of severing Simplot's
third-party claims. McCain is concerned about infringement,
liability, and indemnification. As McCain correctly points
out, Simplot's claims against Elea and Food Physics do
not relate to the underlying liability claims per se and are,
in fact, contingent upon the resolution of those claims.
While the Court agrees with this idea-that the jury may not
even need to address Elea and Food Physics depending on its
findings of infringement-the solution is not necessarily to
hold a separate trial, but to hold off on the
indemnification portion of the trial until the
infringement portion is dealt with. In fact, as the
Court has already noted, it might already have to do
something along these lines. See Dkt. 40, at 6
(noting that while consolidation of the design patent claims,
the utility patent claims, and the trade dress infringement
claims was appropriate, severing the issues for trial may be
necessary depending on how the case played out).
short, McCain has expressed valid concerns; however, the
Court will not make a determination at this time regarding
bifurcation or severance of the third-party claims- or any of
the claims at issue in this case. For the reasons outlined
above, the Court finds it unlikely that it would hold
completely separate trials in these matters, however, it
might structure the trial in ...