Court Opinion

ID: 196103
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:56:26+00
Date Added: 2024-06-11T17:26:40.597673
License: Public Domain

NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit

                                        2007-1083

                              MICHELLE D. CONNELL
                    and HI-TECH BEDS SYSTEMS, CORPORATION,

                                                        Plaintiffs-Appellants,

                                             v.

                       KLN STEEL PRODUCTS COMPANY, LTD.
                   (doing business as KLN Steel Products Company),
                       and CLARK/BLINDERMAN/KNIGHT, LLC,

                                                        Defendants-Appellees.

       Philip A. Nicholas, Anthony, Nicholas, & Tangeman, LLC, of Laramie, Wyoming,
argued for plaintiffs-appellants. With him on the brief was Mitchell H. Edwards. Of
counsel on the brief was James K. Borcia, Tressler Soderstrom Maloney & Priess, LLP,
of Chicago, Illinois.

        Kevin M. O’Hagan, O’Hagan Spencer LLC, of Chicago, Illinois, argued for
defendants-appellees. With him on the brief were James J. O’Hagan, Elizabeth M.
Dillon, and Leena Soni. Of counsel on the brief was Robert A. Auchter, Robins, Kaplan,
Miller & Ciresi, LLP, of Washington, DC.

       Eric Fleisig-Greene, Attorney, Appellate Staff, Civil Division, United States
Department of Justice, of Washington, DC, argued for amicus curiae. With him on the
brief were Peter D. Keisler, Acting Attorney General, and Scott R. McIntosh, Attorney.

Appealed from: United States District Court for the Northern District of Illinois

Judge Virginia M. Kendall
                          Note: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit

                                           2007-1083

                             MICHELLE D. CONNELL
                   and HI-TECH BEDS SYSTEMS, CORPORATION,
                                                  Plaintiffs-Appellants,

                                               v.

                      KLN STEEL PRODUCTS COMPANY, LTD.
                   (doing business as KLN Steel Products Company)
                       and CLARK/BLINDERMAN/KNIGHT, LLC,

                                                               Defendants-Appellees.

                                   _______________________

                                   DECIDED: November 15, 2007
                                   _______________________

Before MICHEL, Chief Judge, RADER and MOORE, Circuit Judges.

MOORE, Circuit Judge.

      Michelle D. Connell and Hi-Tech Bed Systems, Corporation (collectively

“Connell”) appeal from an order by the United States District Court for the Northern

District of Illinois transferring appellee’s affirmative defense under 28 U.S.C. § 1498(a)

to the Court of Federal Claims. Connell v. KLN Steel Prods. Co., No. 04-CV-0194, 2006

WL 2661011 (N.D. Ill. Sept. 13, 2006). We vacate the transfer order and remand for

proceedings consistent with this opinion.

                                        BACKGROUND

      Connell     filed     suit     against   KLN     Steel   Products   Company      and

Clark/Blinderman/Knight, LLC (collectively “KLN”) in the Northern District of Illinois,
alleging KLN committed various tortious acts under Illinois state law and that military

bunk beds provided by KLN to the government under certain contracts infringe claims of

United States Patent No. 6,611,973.       KLN contended that the United States had

authorized and consented to the alleged infringement, exculpating KLN from any

liability. See 28 U.S.C. § 1498(a). KLN moved for summary judgment on this defense,

and the district court denied that motion. Connell, 2006 WL 2661011, at *1.

       After concluding that summary judgment was inappropriate, the district court

ordered that the case be transferred to the Court of Federal Claims, purportedly under

28 U.S.C. § 1404(a), for resolution of the question of whether the government had

authorized and consented to the allegedly infringing activities. Id. at *7. The district

court’s order was based on its conclusion that “it lack[ed] jurisdiction over the Navy in a

suit for patent infringement pursuant to 28 U.S.C. § 1498.” Id. The district court also

concluded that the government was an indispensable party to the litigation. Id.

       Connell moved for reconsideration of the district court’s sua sponte order on

September 29, 2006. That motion was denied on October 23, 2006. Connell filed a

notice of appeal in the district court on November 20, 2006.

                                      DISCUSSION

       A.     Jurisdiction

       As a preliminary matter, KLN questions both the timeliness of Connell’s appeal

and whether we have jurisdiction under 28 U.S.C. § 1292(d)(4)(A), reasoning that the

district court only expressly relied on 28 U.S.C. § 1404(a) as the authority for

transferring the case to the Court of Federal Claims and § 1292(d)(4)(A) only permits

2007-1083                                   2
jurisdiction over transfers made pursuant to 28 U.S.C. § 1631. We conclude that we

have jurisdiction.

       KLN argues that § 1292(d)(4)(B)’s 60-day stay of proceedings in the district court

following issuance of an order transferring a case to the Court of Federal Claims under

28 U.S.C. § 1631 inherently includes a 60-day deadline for filing a notice of appeal. We

disagree. Section 1292(d)(4)(B) does not, by its terms, provide a time period for filing

an appeal. In this case, the applicable requirements for appealing the district court’s

transfer order, including the time for filing a notice of appeal, are governed by the

Federal Rules of Civil and Appellate Procedure. We conclude that Connell complied

with the applicable rules by filing its notice of appeal within 30 days of the district court’s

denial of its motion for reconsideration. See FED. R. APP. P. 4(a)(1)(A) (notice of appeal

must be filed within 30 days of the order); see also Maxus Energy Corp. v. United

States, 31 F.3d 1135, 1139 (Fed. Cir. 1994) (noting that a motion for reconsideration

stays the time for filing an appeal). Thus, this appeal was timely. 1

       We also reject KLN’s argument that we lack jurisdiction under 28 U.S.C.

§ 1292(d)(4)(A), based on our recent decision in Fisherman’s Harvest, Inc. v. PBS & J,

490 F.3d 1371 (Fed. Cir. 2007). In that case, the district court cited only 28 U.S.C.

§ 1404(a) as providing the basis to transfer the case to the Court of Federal Claims.

See Fisherman’s Harvest, Inc. v. PBS & J, 401 F. Supp. 2d 745 (S.D. Tex. 2005). The

same is true here. In this case, the district court expressly concluded that it lacked

jurisdiction over KLN’s § 1498(a) affirmative defense and transferred it to the Court of

Federal Claims, citing only § 1404(a). See Connell, 2006 WL 2661011, at *7. Like we

       1
              We deny KLN’s pending motion to dismiss the appeal as untimely.

2007-1083                                     3
concluded in Fisherman’s Harvest, we conclude that the district court was, in fact,

transferring the case under 28 U.S.C. § 1631 to cure what it perceived to be its “want of

jurisdiction.” See Fisherman’s Harvest, 490 F.3d at 1374; 28 U.S.C. § 1631. Therefore,

we reject KLN’s challenge to our appellate jurisdiction.

       B.       Transfer Under 28 U.S.C. § 1404(a)

       The district court did not have the benefit of our recent decision in Fisherman’s

Harvest in which we concluded that the Court of Federal Claims is not a “district or

division” under 28 U.S.C. § 1404(a).       That decision—issued while this appeal was

pending—renders transfers to the Court of Federal Claims under § 1404(a) improper.

In light of Fisherman’s Harvest, § 1404(a) cannot provide a basis for the transfer order

in this case.

       C.       Transfer Under 28 U.S.C. § 1631 to Cure “Want of Jurisdiction”

       For transfer pursuant to § 1631, the transferor court must determine that it lacks

jurisdiction over the action and that the transferee court possesses jurisdiction over the

action. Fisherman’s Harvest, 490 F.3d at 1374. The district court, however clearly had

jurisdiction over Connell’s various claims under 28 U.S.C. §§ 1331, 1332, and 1338.

Section 1498(a) merely provides an affirmative defense to a patent infringement suit

brought against private party contractors; it is not a bar to a district court’s jurisdiction

over disputes between private parties. See, e.g., Sperry Gyroscope Co. v. Arma Eng’g

Co., 271 U.S. 232, 235-36 (1926) (“It became the duty of the court below to consider

and determine whether, in the circumstances stated, appellee was relieved of liability

and permitted by statute to do what otherwise would have constituted a violation of

appellant’s rights.”); Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 554

2007-1083                                    4
(Fed. Cir. 1990) (“The Supreme Court has established that section 1498(a) is to be

applied, at least with respect to suits to which the United States is not a party, as a

codification of a defense and not as a jurisdictional statute.”). Therefore, we conclude

that § 1631 cannot form the basis for the district court’s transfer to the Court of Federal

Claims because it did not lack jurisdiction over KLN’s § 1498(a) defense.               Cf.

Fisherman’s Harvest, 490 F.3d at 1375 (“Because there is no ‘want of jurisdiction’ over

the oyster growers’ claims against the private contractors, a transfer under section 1631

is not proper.”).

       D.      The United States as an Indispensable Party

       The district court concluded that the United States was indispensable to the

resolution of Connell’s various state law and patent claims. Although we conclude the

United States may be in possession of information relevant to Connell’s claims and

KLN’s defenses, and certain witnesses may be government employees, the United

States is not an indispensable party to this dispute between private parties. Cf. Salton,

Inc. v. Phillips Domestic Appliances & Personal Care B.V., 391 F.3d 871, 880 (7th Cir.

2004) (“When a plaintiff is harmed by the acts of several persons, all may be essential

sources of evidence in a suit against any. But if this possibility automatically requires

that all be joined, the rule that joint tortfeasors are not by virtue of their jointness

indispensable parties . . . would be overthrown.”).

       We conclude that neither § 1404(a) nor § 1631 provides a proper basis for the

district court’s transfer to the Court of Federal Claims. We also conclude that the United

States is not an indispensable party to Connell’s suit against KLN.         Therefore, we

2007-1083                                   5
vacate the district court’s order transferring this case to the Court of Federal Claims and

remand for further proceedings consistent with this opinion.

2007-1083                                   6