In the

United States Court of Appeals

For the Seventh Circuit

No. 00-2049

Ole K. Nilssen,

Plaintiff-Appellant,

v.

Motorola, Inc., and Motorola

Lighting, Inc.,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 93 C 6333--Milton I. Shadur, Judge.

Argued November 3, 2000--Decided June 25, 2001

 Before Flaum, Chief Judge and Easterbrook

and Williams, Circuit Judges.

 Easterbrook, Circuit Judge. When this case

accusing Motorola of violating patent,

contract, and trade secret rights became

one of the oldest on its docket, the

district court decided to expedite

matters by splitting the case in two: the

court required Ole Nilssen, the

plaintiff, to file a new patent action

(No. 96 C 5571) and retained the statelaw theories under the original docket

number (No. 93 C 6333), thinking that

these could be handled quickly.

Unfortunately this move backfired,

extending rather than abbreviating the

litigation. The patent action lingers on

the district court’s docket, though it

looks to the statisticians at the

Administrative Office of the United

States Courts like a new and independent

case. Meanwhile the contract and trade

secret theories of relief, dismissed by

the district court at the end of 1998,

have wandered among appellate courts,

looking for a home--a process complicated

not only by the division between the

regional circuits and the Federal

Circuit, but also by the fact that the

issues separated for appeal do not meet

the criteria for dispatch under Fed. R.

Civ. P. 54(b).
 Final decisions in all cases originally

based on federal patent law must be

appealed to the Federal Circuit. 28

U.S.C. sec. 1295(a)(1). Jurisdiction of

Nilssen’s suit was based on 28 U.S.C.

sec. 1338, so it looked like

sec. 1295(a)(1) directed appeals to that

court. Yet the district court had not

resolved the patent issues, and the

mitosis of this case produced one

offspring relying entirely on state law.

After concluding that jurisdiction in

this judicially created case fragment did

not arise under sec. 1338, a divided panel

of the Federal Circuit concluded that the

appeal should be transferred to the

Seventh Circuit. Nilssen v. Motorola,

Inc., 203 F.3d 782 (Fed. Cir. 2000).

After filing lengthy briefs in this

court, the parties discovered at oral

argument that we too were restive about

jurisdiction--both the district court’s

and ours. If one case really has become

two, that ensures appellate jurisdiction,

for the district judge entered a final

decision in the state-law fragment. But

if the proceedings now on appeal are a

distinct case arising under state law,

what is the basis of subject-matter

jurisdiction in the district court?

Motorola has its principal place of

business in Illinois, and the complaint

alleges that Nilssen is a "resident" of

Illinois. He sought to pursue the statelaw theories under the supplemental

jurisdiction--all well and good, as long

as the patent theory is in the case. But

if the patent issues are gone--not just

dismissed, after which the district court

could have retained supplemental

jurisdiction under 28 U.S.C. sec. 1367(c),

but missing in the sense that sec. 1338

never supplied jurisdiction to begin

with--then with no diversity of

citizenship the case does not belong in

federal court. And it looks like the

Federal Circuit’s decision establishes

that sec. 1338 just is not in the picture,

that the state-law fragment should be

treated as a free-standing case that had

never depended on sec. 1338 for federal

jurisdiction. Whether or not that is

right (Judge Rader’s dissenting opinion

in the Federal Circuit questioned it), it

is the law of the case. See Christianson

v. Colt Industries Operating Corp., 486

U.S. 800 (1988). If on the other hand

Judge Rader’s views were to prevail, then

the appeal is in the wrong circuit--and

probably should not be in any circuit,
for "the case" (viewed as the original,

pre-division unit invoking sec. 1338)

would still be live in the district

court.

 Responding to our request at oral

argument, the parties filed supplemental

memoranda concerning jurisdiction. The

first and most important revelation is

that the allegations of the complaint are

misleading: Nilssen may have been a

"resident" of Illinois when the complaint

was filed, but he was a domiciliary (and

hence a "citizen") of Florida. It is cit

izenship that counts for purposes of the

diversity jurisdiction. Steigleder v.

McQuesten, 198 U.S. 141 (1905); Denny v.

Pironi, 141 U.S. 121 (1891); Robertson v.

Cease, 97 U.S. 646 (1878). Nilssen has

tendered papers under 28 U.S.C. sec. 1653

to show the correct jurisdictional facts.

See Newman-Green, Inc. v. AlfonzoLarrain, 490 U.S. 826 (1989). Motorola

agrees that the new allegation of

"citizenship" is correct. We have no

reason to think that the parties are

collusively asserting jurisdiction, so we

grant Nilssen permission to amend his

complaint, as he proposes. That resolves

the question of subject-matter

jurisdiction--and incidentally resolves

appellate jurisdiction too, for even if

the district court should not have

divided the cases, the division is a fait

accompli and Nilssen had to appeal

immediately. It does not follow, however,

that we should allow the division to

continue. For reasons that will become

apparent, this case must be re-integrated

in the district court.

 Nilssen is an inventor--a litigious

inventor, as a check of Lexis or Westlaw

will reveal. He has been unsuccessful in

all published decisions and has been

threatened with sanctions for making

frivolous claims, see In re Nilssen, 851

F.2d 1401, 1402 n.1 (Fed. Cir. 1988); In

re Nilssen, 1991 U.S. App. Lexis 9796 at

*4 n.2 (Fed. Cir. May 8, 1991), but in

this case he hopes for a brighter day.

Formerly an employee of Motorola, Nilssen

was fired in 1972. That, plus his

penchant for litigation, might have led

Motorola to send him packing when, in

1982, Nilssen wrote to Robert Galvin,

Motorola’s ceo, with a proposal. Actually

Motorola did turn him away, several

times, but in 1987 it decided to

entertain Nilssen’s ideas for electronic
ballasts. (A ballast stabilizes

electrical current. Ballasts are vital to

the operation of fluorescent lamps,

providing the high voltage necessary to

ionize the gas and get the lamp going,

then limiting the current’s flow once the

lamp is lit. Standard ballasts use

electrical components such as

transformers, resistors, and capacitors;

an electronic ballast relies instead on

transistors.)

 Galvin’s decision to open negotiations

and receive information from Nilssen

under a promise of confidentiality,

coupled with Motorola’s later decision to

make and sell electronic ballasts without

paying Nilssen, led to this lawsuit--now

two lawsuits, plus at least one related

suit against another firm. See Nilssen v.

MagneTek, Inc., 130 F. Supp. 2d 985 (N.D.

Ill. 2000). Nilssen contends that when

Motorola entered the electronic-ballast

business in 1989 it either stole his

ideas (reflected in patents plus trade

secrets revealed during the negotiations)

or, by making ballasts without using his

ideas, broke a promise to share with him

a substantial portion of any profits.

Nilssen contends that his technology was

worth at least $50 million to Motorola,

and he demands that sum in damages.

 Since the 1970s Galvin had been

evaluating electronic ballasts as a line

of business that Motorola might want to

enter. Until 1989, however, Motorola

thought its chances of success dim.

Nilssen believes that the technology he

disclosed to Motorola during negotiations

in the late 1980s made the difference;

Motorola, by contrast, contends that

Nilssen’s ideas did not pan out and that

it is now using technology developed by

Carlile Stevens without any reliance on

Nilssen’s patents or trade secrets. After

diverting the patents into a separate

suit, the district judge turned to

Nilssen’s state-law theories. In April

1997 the court concluded that several of

Nilssen’s theories are preempted by the

Illinois Trade Secrets Act, 765 ILCS

1065/1 to 1065/9, but that theories under

this statute were viable. 963 F. Supp.

664 (N.D. Ill. 1997). In August 1997 the

judge removed several varieties of trade

secret theories from the case. 1997 U.S.

Dist. Lexis 12899 (N.D. Ill. Aug. 22,

1997). A year later the court carved off

still more elements of Nilssen’s trade-
secret theories. 1998 U.S. Dist. Lexis

12882 (N.D. Ill. Aug. 12, 1998). Next it

entered an order barring testimony by

Horace DePodwin, Nilssen’s principal

damages expert. 1998 U.S. Dist. Lexis

19161 (N.D. Ill. Nov. 30, 1998).

DePodwin’s testimony would be useless,

the court concluded, because he did not

try to identify those portions of

Nilssen’s loss that flowed from the

theories of liability remaining in the

case. Instead, the judge observed,

DePodwin tried to estimate Motorola’s

gains (and thus areasonable royalty) from

using all of Nilssen’s intellectual

property to which Motorola had access,

including the patented inventions that

had been carved off for the separate suit

and the trade secrets that had been dealt

with in the August 1998 opinion (which

had been filed after DePodwin prepared

his report). Because this ruling left

Nilssen with no practical way to recover

damages, the district court concluded

that he was no longer entitled to a jury

trial; the only remaining theories were

equitable. At a status conference on

December 29, 1998, Nilssen withdrew his

request for injunctive relief. The next

day, reading an opinion from the bench,

the judge explained that this left

Nilssen with no case and entered judgment

for Motorola.

 Two features of this history show why

the separation of the patent from the

state-law theories has led to trouble.

One is the effect of the split on the

damages calculation. The district judge

demanded that DePodwin calculate tradesecret damages independently of patent

damages. That task was necessitated by

the segregation of legal theories into

separate lawsuits, yet the district judge

concluded that DePodwin had been unable

to accomplish it (though DePodwin tried).

The district judge never explained how it

would have been possible (or practical)

to calculate trade-secret damages on the

assumption that Motorola did not infringe

any of Nilssen’s patents, or patent

damages on the assumption that Motorola

did not use any of Nilssen’s trade

secrets. In the parties’ negotiations--

and, Nilssen insists, in Motorola’s

creation of its electronic ballasts--the

trade secrets and patents were tied

together, if only because the trade

secrets concern the use of ideas

reflected in the patents.
 Second was the effect on the merits of

the district court’s rejection of

DePodwin’s damages report. This left

Nilssen without a claim for legal relief

and scuttled his request for a jury,

which in turn sank the suit. But if the

patent and trade secret theories were

united in a single suit, damages claims

would have remained, and Nilssen would

have been entitled to a jury--at least on

whatever elements survived summary

judgment. When legal and equitable

theories are joined in one suit, the

jury’s resolution of questions common to

the two branches controls. Beacon

Theatres, Inc. v. Westover, 359 U.S. 500

(1959); Dairy Queen, Inc. v. Wood, 369

U.S. 469 (1962). The district judge’s

order cleaving the case in two had the

practical consequence of nullifying

Nilssen’s entitlement to a jury trial on

issues common to its legal and the

equitable aspects.

 There is a third consideration--one

apparent from the opening paragraphs of

this opinion. By splitting the patent and

trade-secret theories into two suits, the

district court also directed the eventual

appeals to two different courts. If

things remain as they are, we will hear

the state-law theories, and the Federal

Circuit the patent theories. This would

be bad enough if it required two

appellate courts to master the

intricacies of electronic ballasts, the

Nilssen-Motorola negotiations, and the

differences between the Nilssen and

Stevens proposals for ballast design. The

joint appendix in this appeal exceeds

4,000 pages, the record is very much

longer, and we do not doubt that the

patent appeal to the Federal Circuit will

sacrifice additional reams of paper.

Squandering judicial resources by

requiring six appellate judges (at least

two panels of two circuits) to master

this material should be avoided.

Moreover, as the district judge himself

recognized when dismissing the suit (at

least, the state-law fragment that the

judge had created), Nilssen has only one

"claim for relief." He does not have a

patent claim based on one set of events

and a trade secret claim based on

different events. There is only one

series of negotiations, disclosures, and

product-design decisions. Nilssen

contends that what Motorola did violates

several statutes and common-law
doctrines, but there is only one nucleus

of operative facts, and thus only one

"claim." See NAACP v. American Family

Mutual Insurance Co., 978 F.2d 287, 291-

92 (7th Cir. 1992). That is why the

state-law theories came within the

supplemental jurisdiction, which depends

on such a tight link among state and

federal theories that they form part of a

single controversy. 28 U.S.C.

sec. 1367(a). It makes no sense to send

patent-law theories to the Federal

Circuit and state-law theories to the

regional circuit, when only one "claim"

is involved, and one circuit’s decision

may have preclusive effect on issues

within the scope of the other’s

jurisdiction. Avoiding claim-splitting

(with the waste of judicial resources and

the potential for inconsistent appellate

decisions) is why sec. 1295(a)(1) provides

that, if jurisdiction is based on

sec. 1338 even in part, then the Federal

Circuit resolves all issues on appeal.

The Federal Circuit concluded that the

district court had all but defeated this

aspect of sec. 1295 by turning one case

into two; but it is within our power to

pull victory from the jaws of defeat by

turning the two cases back into one. See

28 U.S.C. sec. 2106.

 Because sensible handling of this case

includes only one appeal, to only one

circuit--which means, to the Federal

Circuit--we resist all temptation to

comment on the issues covered in the

current round of appellate briefs.

Everything will be open to consideration

on a new appeal after the patent issues

have been wrapped up. But we do think

that it would be prudent for the district

court to take a fresh look at the

admissibility of DePodwin’s testimony

once patent and trade-secret theories are

reunited. In other words, Judge Darrah,

who took over the patent-law fragment of

the suit on his appointment to the bench

last year, should not block DePodwin’s

testimony solely by invoking the law of

the case. Moreover, it might make sense

for thedistrict court to allow DePodwin

to submit a new damages report in light

of Judge Shadur’s rulings in August 1998

and any later developments with respect

to the patent theories.

 The judgment of the district court is

vacated, and the case is remanded with

instructions to consolidate this
proceeding with the patent-law proceeding

that had been spun off as No. 96 C 5571.

The cases must be rejoined for all

purposes, including any appeal from the

final judgment. The district court should

endeavor to consolidate all of Nilssen’s

actions concerning electronic ballasts

before a single judge; Judge Darrah can

and should initiate that process under

local rules.