Court Opinion

ID: 9487912
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:29:53.579743+00
Date Added: 2024-06-11T17:52:33.538826
License: Public Domain

Opinion for the court filed by Circuit Judge RADER. Concurring in part and dissenting in part opinion filed by Circuit Judge SCHALL.
*1529RADER, Circuit Judge.
The United States District Court for the Middle District of Florida dismissed without prejudice Edward F. Allina and Meter Treat-er, Inc.’s (collectively Meter Treater) infringement suit against L.E.A. Dynatech, Inc. (LEA). L.E.A. Dynatech, Inc. v. Allina, No. 91-CV-219, Order (M.D.Fla. Apr. 30, 1993) (April 1993 Order). The district court also awarded attorney fees and costs to LEA. Id. The district court assessed the fee award at $537,541.60. L.E.A. Dynatech, Inc. v. Allina, No. 91-CV-219, Order (M.D.Fla. Feb. 4, 1994) (February 1994 Order). The district court then entered final judgment. L.E.A Dynatech, Inc. v. Allina, No. 91-CV-219, Order (M.D.Fla. Apr. 14, 1994) April 1994 Order). Meter Treater appeals the dismissal and award of attorney fees and costs, as well as the amount of the fee award. Because the district court did not abuse its discretion in dismissing without prejudice and awarding attorney fees and costs, and because Meter Treater untimely objected to the award, this court affirms.
BACKGROUND
In February 1991, LEA filed suit against Meter Treater seeking a declaratory judgment of noninfringement and unenforeeability of five patents owned by Meter Treater. Meter Treater counterclaimed for infringement of United States Patent No. 4,931,895 (the ’895 patent). In November 1991, Meter Treater filed a reissue application on the ’895 patent, adding claims to initiate an interference with a third party. Meter Treater did not inform the district court or LEA of its application for reissue.
When LEA learned of the reissue application in February 1992, it moved to stay the district court case. LEA sought the stay to avoid unnecessary and duplicative discovery and to minimize trial preparation. Meter Treater vigorously opposed the motion. The district court denied LEA’s motion to stay in March 1992. Discovery proceeded.
In June 1992, the examiner at the United States Patent and Trademark Office rejected all the claims in the reissue application, including the claims as originally filed. • In September 1992, seven months after Meter Treater opposed LEA’s motion for a stay, and just before the pre-trial conference, Meter Treater moved to stay pending completion of the reissue proceeding. LEA opposed the motion and urged that the case proceed to trial. In the alternative, LEA asked for dismissal without prejudice, as well as attorney fees and costs. The district court did not rule on Meter Treater’s motion.
In April 1993, after learning that the examiner had issued a Final Office Action rejecting all the claims of the ’895 patent,' LEA again moved to dismiss without prejudice and for attorney fees and costs. Meter Treater opposed LEA’s motion to dismiss, but did not respond to the request for fees.
The district court dismissed all claims and counterclaims in the litigation without prejudice.1 April 1993 Order. The district court also awarded attorney fees and costs accruing from March 6, 1992, the date the district court denied LEA’s motion to stay. Id. Meter Treater appealed to this court in May 1993. In August 1993, this court stayed the appeal pending the district court’s calculation of the fee award.
In February 1994, the district court directed Meter Treater to pay LEA $537,541.60 in fees and costs. February 1994 Order. LEA then moved for entry of final judgment. Meter Treater responded by moving to amend or vacate the April 1993 Order. Meter Treater also opposed entry of final judgment. Meter Treater raised, for the first time, objections to the district court’s fee award in its supporting memorandum, asserting, inter alia, that the fee award would bankrupt it.
On April 14,1994, the district court denied Meter Treater’s motion to amend and entered final judgment. April 1994 Order. Meter Treater then appealed. Aso before this court is Meter Treater’s May 1993 appeal, because the district court’s entry of final judgment lifted this court’s earlier stay.
*1530DISCUSSION
This court reviews a dismissal without prejudice only for an abuse of discretion. See Link v. Wabash R.R., 370 U.S. 626, 633, 82 S.Ct. 1386, 1390, 8 L.Ed.2d 734 (1962). This court applies the law of the pertinent regional circuit, here the Eleventh Circuit, on this procedural question. See Biodex Corp. v. Loredan Biomedical, Inc., 946 F.2d 850, 856, 20 USPQ2d 1252, 1258 (Fed.Cir.1991), cert. denied, — U.S. -, 112 S.Ct. 2957, 119 L.Ed.2d 579 (1992). This court also reviews an award of attorney fees and costs under the highly deferential abuse of discretion standard. See Chambers v. NASCO, Inc., 501 U.S. 32, 50, 111 S.Ct. 2123, 2135, 115 L.Ed.2d 27 (1991); Hughes v. Novi Am., Inc., 724 F.2d 122, 124, 220 USPQ 707, 709 (Fed.Cir.1984). A district court abuses its discretion when it makes an error of law, or a clear error of judgment, or exercises its discretion on findings which are clearly erroneous. J.P. Stevens Co. v. Lex Tex, Ltd., 822 F.2d 1047, 1050 (Fed.Cir.1987).
I.
A district court has the inherent power to “control the disposition of the causes on its docket with economy of time and effort for itself, for counsel and for litigants.” Landis v. North Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163, 166, 81 L.Ed. 153 (1936). Incident to this power is the court’s ability to dismiss a lawsuit. See Dynes v. Army Air Force Exchange Serv., 720 F.2d 1495, 1499 (11th Cir.1983) (citing Jones v. Graham, 709 F.2d 1457, 1458 (11th Cir.1983)).
When LEA moved to dismiss in April 1993, Meter Treater’s reissue application had been pending for seventeen months. The examiner had rejected all claims of the ’895 patent in a Final Office Action. The duration of an appeal of the final rejection was indefinite, and the outcome of such an appeal unclear. Meter Treater itself had switched its position to favor a stay in the district court proceedings.
In this factual setting, several policies supported the district court’s dismissal without prejudice. The dismissal removed the case from the district court’s docket pending the agency appeal. The dismissal also preserved the resources of the court and the parties by preventing further discovery and litigation on claims which might not survive the reissue. In addition, the dismissal eliminated any prejudice to LEA from the bare existence of the infringement suit. Finally, the dismissal without prejudice left undisturbed Meter Treater’s opportunity to enforce any patent claims surviving the reissue process.
Moreover, dismissal without prejudice may operate as an alternative to a stay of proceedings. Hill v. Victoria County Drainage Dist., 441 F.2d 416, 417 (5th Cir.1971) (court dismissed without prejudice rather than staying case because “to prematurely resolve the alleged federal constitutional problems might well be a waste of time”)2; see Intermedics Infusaid, Inc. v. Regents of the Univ. of Minn., 804 F.2d 129, 132 n. 5, 231 USPQ 653, 655 n. 5 (Fed.Cir.1986). In September 1992, Meter Treater itself moved to stay the district court proceedings pending conclusion of the reissue examination. Dismissal without prejudice in effect stayed the proceedings, just as Meter Treater desired. In fact, Meter Treater today would accept dismissal without prejudice, absent the fee award, as an alternative to the April 1992 Order. Given these considerations, and the wide berth that district courts must have in controlling their dockets, this court cannot conclude that the district court abused its discretion by dismissing without prejudice.
II.
District courts possess inherent power to assess attorney fees as a sanction when a party acts in bad faith, vexatiously, want only, or for oppressive reasons. Chambers, 501 U.S. at 45-46, 111 S.Ct. at 2133-34. In addition to dismissing the lawsuit, the district court here ordered Meter Treater to “pay to [LEA] all costs, including attorneys fees, incurred by [LEA] from the time that *1531this Court denied [LEA’s] MOTION TO STAY on March 6, 1992.” April 1993 Order. Although the district court did not state the specific basis for its fee award, sufficient record evidence supports the award. See Goodwall Constr. Co. v. Beers Constr. Co., 991 F.2d 751, 759, 26 USPQ2d 1420, 1426-27 (Fed.Cir.1993) (this court need not remand for explicit fact findings if sufficient record evidence supports an award of attorney fees).
In March 1992, Meter Treater opposed LEA’s motion to stay pending completion of the reissue proceedings. Based on Meter Treater’s arguments, the district court denied the motion. Discovery proceeded. LEA incurred substantial expense on depositions and other discovery after March 1992. Following the reissue examiner’s June 1992 rejection of the original claims of the ’895 patent, Meter Treater reversed its position and moved to stay pending completion of the reissue proceedings. Meter Treater filed this motion virtually on the eve of trial.
The record shows that Meter Treater manipulated the timing of court proceedings to suit its own interests. When confident of the force of its original patent claims, Meter Treater urged swift trial proceedings. Then, after the reissue examiner’s rejection of the original claims, Meter Treater did an about-face. Uncertain of the strength of its patent, Meter Treater moved to stay the litigation. Meantime, LEA had to incur substantial expenses in preparation for trial.
The district court tailored the award to Meter Treater’s period of manipulation. The fees span the period from March 6, 1992— the date that the district court denied LEA’s motion to stay — through the date of the April 1993 Order. Based on the record facts, the district court could have reasonably found that Meter Treater used the litigation to impose expenses on a competitor and to gain an advantage in the marketplace. The district court did not abuse its discretion in awarding fees for Meter Treater’s misconduct.
Meter Treater asserts, however, that the fee award would cause bankruptcy, effectively precluding it from ever receiving a hearing on the merits. Thus, says Meter Treater, the fee award “converts” the dismissal without prejudice into one with prejudice, subject to a stricter standard of review. The sanction of dismissal with prejudice requires significant misconduct and lack of appropriate lesser sanctions. See Mingo v. Sugar Cane Growers Co-op, 864 F.2d 101, 102 (11th Cir.1989).
Even if accurate (the record does not conclusively show that bankruptcy will foreclose enforcement of legitimate intellectual property rights by Meter Treater’s successor in interest), Meter Treater’s arguments come too late. An appellate court generally will consider only issues presented to the district court. Kendrick v. Jefferson County Bd. of Educ., 932 F.2d 910, 914 (11th Cir.1991); McGinnis v. Ingram Equip. Co., 918 F.2d 1491, 1495 (11th Cir.1990); see Formby v. Farmers & Merchants Bank, 904 F.2d 627, 634 (11th Cir.1990). Meter Treater did not timely protest the fee award to the district court. Instead, Meter Treater appealed the dismissal without ever raising the fee question to the district court. The appeal divested the district court of jurisdiction over the fee award. See Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58, 103 S.Ct. 400, 402, 74 L.Ed.2d 225 (1982) (per curiam) (filing of a notice of appeal divests the district court of jurisdiction over those aspects of the ease involved in the appeal). Thus, unless Meter Treater meets an exception to the general rule against raising issues for the first time on appeal, this court will not entertain Meter Treater’s objections.
An appellate court will consider an issue not presented below only if: (i) the issue involves' a pure question of law and refusal to consider it would result in a miscarriage of justice; (ii) the proper resolution is beyond any doubt; (iii) the appellant had no opportunity to raise the objection at the district court level; (iv) the issue presents “significant questions of general impact or of great public eoncern[;]” or (v) the interest of substantial justice is at stake. Dean Witter Reynolds, Inc. v. Fernandez, 741 F.2d 355, 360-61 (11th Cir.1984); see also Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1575 (Fed.Cir.1992). Meter *1532Treater’s untimely fee protest does not qualify for any of these exceptions.
The district court did not abuse its discretion by awarding fees to LEA. Accordingly, the first and second exceptions do not apply. Nor does the third, because Meter Treater could have raised the fee award to the district court on several occasions. LEA sought attorney fees and costs in its April 1993 motion to dismiss. Yet, Meter Treater did not object to the award in its response to LEA’s motion or in subsequent communications with the district court. In fact, Meter Treater did not object until March 1994 — nearly a full year after the April 1993 Order. Admittedly, Meter Treat-er did not know of the extent of the award before the February 1994, Order. However, Meter Treater had adequate opportunities to object to the basis for the award itself or to move the district court to reconsider its April 1993 Order before appealing. As to the fourth exception, Meter Treater’s untimely appeal does not raise a significant question of general impact or great public concern. Finally, this appeal does not call into question some interest of substantial justice. Meter Treater chose not to protest the fee award until after the district court lost jurisdiction over the issue, depriving the district court of the opportunity to recognize Meter Treater’s straitened financial condition. Under these circumstances, for this court to consider the issue would allow Meter Treater to evade district court consideration. This court does not choose to encourage such evasions.
Therefore, the district court did not abuse its discretion in dismissing without prejudice and awarding fees and costs.
COSTS
Each party shall bear its own costs.
AFFIRMED.

. It is unclear from the record on appeal whether the district court dismissed LEA's patent declaratory judgment action in the April 1993 Order or in an earlier order of the court.

. The Eleventh Circuit adopted as binding precedent all decisions rendered before October 1, 1981, by the former Fifth Circuit. Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir.1981) (in banc).