Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00581/USCOURTS-casd-3_10-cv-00581-1/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 1 - 10cv581

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

GEOFFREY L. MCCABE,

Plaintiff,

CASE NO. 10CV581 JLS (JMA)

ORDER DENYING PLAINTIFF’S

MOTION FOR RULE 11

SANCTIONS

(ECF No. 77)

vs.

FLOYD ROSE GUITARS, FLOYD ROSE

MARKETING INC., FLOYD D. ROSE,

DAVITT & HANSER MUSIC CO., PING

WELL INDUSTRIAL CO., AP GLOBAL

ENTERPRISES INC., SCHALLER

ELECTRONIC GMBH, DOES 3–10,

INCLUSIVE,

Defendants.

Presently before the Court is Plaintiff Geoffrey L. McCabe’s (“McCabe”) motion for Rule

11 sanctions against defendant Ping Well Industrial Co., Ltd., and its counsel. (Mot. Sanctions,

ECF No. 77) Also before the Court is Defendant Ping Well Industrial Co., Ltd. and Parker

Shumaker Mills LLP’s (collectively, “Defendants”) response in opposition, (Resp. in Opp’n, ECF

No. 81), and McCabe’s reply in support, (Reply in Supp., ECF No. 85). The hearing set for the

motion on December 1, 2011, was vacated, and the matter taken under submission on the papers. 

Having considered the parties’ arguments and the law, the Court DENIES Plaintiff’s motion for

sanctions. 

The factual and procedural background as summarized in this Court’s October 17, 2011,

Order is incorporated by reference here. (Order, Oct. 17, 2011 at 2–3, ECF No. 87) The parties’

arguments on the instant motion for sanctions really boil down to a disagreement over the legal

Case 3:10-cv-00581-JLS-JMA Document 100 Filed 12/05/11 Page 1 of 3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 A “drop shipment” is when a company sells its products to a customer, which directs delivery

to a third-party located elsewhere. See Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 877 (9th Cir.

1982). Here, Ping Well sold its products to a Canadian corporation, which directed delivery to a thirdparty business located in California. 

2

 McCabe also seeks sanctions for Defendants’ “deliberately [sitting] on material evidence for

over nine months that confirms the falsity of such statements.” (Not. of Mot. Sanctions 1, ECF No.

77) This grounds for sanctions was not asserted in the draft Rule 11 motion served upon Defendants,

however. (Denlinger Decl., Ex. B at 3, ECF No. 81-4) As such, the Court declines to consider it as

a basis for issuing sanctions. See, e.g., Ideal Instruments, Inc. v. Rivard Instruments, Inc., 243 F.R.D.

322, 338–40 (N.D. Iowa 2007).

- 2 - 10cv581

relevancy of “drop shipments”1 for purposes of establishing personal jurisdiction over Ping Well. 

Combined with Ping Well’s other contacts with California, this Court previously held that the drop

shipments were sufficient to confer personal jurisdiction over Ping Well. (Id. at 10–11) This

conclusion was based on Ping Well’s awareness that its products were being shipped to California,

not on any finding that drop shipments to California businesses constitutes making sales or

engaging in business within the forum state. (See id. at 10)

McCabe’s Rule 11 motion for sanctions argues, however, that Defendants made

“knowingly false” statements regarding Ping Well’s contacts with California for purposes of

establishing personal jurisdiction.2 (Mot. Sanctions 1, ECF No. 77); (see also id. at 6–7) 

Specifically, McCabe takes issue with several declarations that state that Ping Well does not make

any sales in California or solicit or engage in any business in California, contending that these

statements are contrary to evidence indicating that Ping Well shipped its products to California on

numerous occasions, (id. at 2), and are contrary to admissions in later declarations that Ping Well

has made drop shipments of its products to California businesses, (id. at 4–5). 

This Court has not held and does not now hold that Ping Well’s drop shipments constitute

making sales or soliciting or engaging in business in California, however. Thus, it does not follow

from the shipping records and declarations regarding drop shipments that Defendants’ statements

denying that Ping Well makes sales or otherwise solicits and engages in business in California

were “demonstrably false.” (Mot. Sanctions 7, ECF No. 77) Moreover, even assuming drop

shipments are legally equivalent to “making sales,” the Court doubts that Defendants’ statements

to the contrary rise to the level of sanctionable conduct as Defendants’ contention is at least a

plausible view of the law. Fed. R. Civ. P. 11 advisory committee’s note (noting that the Court

Case 3:10-cv-00581-JLS-JMA Document 100 Filed 12/05/11 Page 2 of 3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 - 10cv581

should consider, inter alia, whether the party’s contention “was based on a plausible view of the

law” in deciding whether to issue Rule 11 sanctions).

Having found that Defendants’ allegedly knowingly false statements were not in fact false,

the Court DENIES McCabe’s motion for sanctions on this basis.

IT IS SO ORDERED. 

DATED: December 5, 2011

Honorable Janis L. Sammartino

United States District Judge

Case 3:10-cv-00581-JLS-JMA Document 100 Filed 12/05/11 Page 3 of 3