Court Opinion

ID: 210079
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:03:26+00
Date Added: 2024-06-11T17:27:59.678082
License: Public Domain

NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit

                                       2007-1473

        ROCKY MOUNTAIN TECHNOLOGY ENGINEERING COMPANY, LLC,

                                                       Plaintiff-Appellant,

                                           v.

                           HUTCHENS INDUSTRIES, INC.,

                                                       Defendant-Appellee.

        Steven R. Schumacher, Godfrey & Lapuyade, P.C., of Englewood, Colorado, for
plaintiff-appellant.

      Randall E. Hendricks, Rouse Hendricks German May, PC, of Kansas City,
Missouri, for defendant-appellee. With him on the brief was Bryan T. White.

Appealed from: United States District Court for the District of Colorado

Judge Marcia S. Krieger
                             NOTE: This disposition is nonprecedential.

 United States Court of Appeals for the Federal Circuit
                                          2007-1473

            ROCKY MOUNTAIN TECHNOLOGY ENGINEERING COMPANY, LLC,

                                                                          Plaintiff-Appellant,

                                               v.

                              HUTCHENS INDUSTRIES, INC.,

                                                                          Defendant-Appellee.

Appeal from the United States District Court for the District of Colorado in case no. 05-
CV-01153, Judge Marcia S. Krieger.
                          ___________________________

                            DECIDED: February 8, 2008
                            ___________________________

Before GAJARSA, LINN, and DYK, Circuit Judges.

DYK, Circuit Judge.

       Plaintiff-Appellant Rocky Mountain Technology Engineering Company (“RMTEC”)

appeals from a decision of the United States District Court for the District of Colorado

dismissing its patent infringement suit for failure to prosecute. We conclude that the

district court did not abuse its discretion in dismissing the action, and we affirm.

                                      BACKGROUND

       On June 21, 2005, RMTEC filed this case against defendant-appellee Hutchens

Industries, Inc. (“Hutchens”), claiming infringement of U.S. Patent No. 5,620,195 (“’195

patent”).   The ‘195 patent concerns a locking system for the sliding undercarriage of a

semitrailer. On October 26, 2005, Hutchens filed its answer, as well as a counterclaim

alleging that the ‘195 patent is invalid and unenforceable. On April 19, 2006, as a result

of a scheduling conference, an order was issued setting various deadlines for filing
motions and reports and concluding discovery. The district court issued an order the

same day scheduling a final pretrial conference for May 22, 2007, with trial scheduled to

begin on August 20, 2007. RMTEC did not object to any of these deadlines.

      RMTEC learned on April 28, 2006, that its patent counsel had decided to

withdraw from the case due to “a disagreement between RMTEC and [patent counsel]

as to the appropriate course of action that should be taken in this case.” However, a

motion to withdraw was not filed until June 30, 2006. The district court granted the

motion on August 23, 2006. RMTEC was still represented by its local counsel, Barry A.

Schwartz. In the parties’ joint status report and request for a Markman hearing, filed on

July 3, 2006, RMTEC indicated that it might need additional time to prepare for such a

hearing in order to locate substitute patent counsel, but did not request an extension of

any deadlines previously set by the court.

      There is no claim that RMTEC failed to comply with the established deadlines

before September 2006. However, after patent counsel withdrew, RMTEC failed to file

any expert disclosures on September 1, 2006, and subsequently failed to serve a

rebuttal expert report by the October 1, 2006, deadline, deadlines set by the April 2006

scheduling order. Hutchens filed a motion for summary judgment on October 17, 2006.

      On October 25, 2006, RMTEC for the first time filed a motion requesting

extensions of time on the dates set by the scheduling order. It requested that: (1) the

October 1, 2006, deadline to serve rebuttal expert reports, be extended to November

15, 2006; 1 (2) the November 1, 2006, deadline to respond to Hutchens’s discovery

requests, be extended to December 1, 2006; and (3) the November 9, 2006, deadline to

      1
             No extension of the missed September 1, 2006, deadline was requested.

2007-1473                               2
respond to Hutchens’s motion for summary judgment, be extended to December 11,

2006. RMTEC stated that it had “found new counsel to prosecute this case, but those

attorneys are reluctant to enter appearances with certain deadlines looming so soon.”

Plaintiff’s Motion To Extend Certain Deadlines at 2, Rocky Mountain Tech. Eng’g Co. v.

Hutchens Indus., Inc., No. 05-cv-01153 (D. Colo. Oct. 25, 2006). On November 2,

2006, the district court granted all three requested extensions, subject to the condition

that “new patent counsel enters an appearance on the Plaintiff’s behalf no later than

November 13, 2006.” J.A. at 77. The court’s order stated, “No further extension of any

discovery deadline or of the deadline for responding to the summary judgment motion

will be granted.” Id.

       Nonetheless, on November 9, 2006, RMTEC filed a second motion to extend the

same three deadlines, and to extend the deadline for new patent counsel to enter an

appearance from November 13, 2006, to December 13, 2006. The district court denied

RMTEC’s motion on the same day it was filed. New patent counsel did not enter an

appearance for RMTEC by November 13, and therefore the original deadlines were

reinstated.   As a result, RMTEC failed to meet the October 1, November 1, and

November 9 deadlines.     RMTEC also failed to comply with a November 17, 2006,

deadline to file a designation of claims, claim terms to be construed, and witnesses to

be called at a Markman hearing.

       On December 6, 2006, RMTEC’s remaining counsel filed a motion to withdraw,

citing “[a]n irreconcilable conflict” with RMTEC. 2 RMTEC also filed a motion to stay the

       2
             This motion was never acted on, because the district court dismissed the
case before addressing it.

2007-1473                               3
case for seventy-five days in order to retain new patent counsel. The court scheduled a

hearing for April 20, 2007, to address all pending motions.

       At that hearing, the district court reviewed the history of the case, noting that “as

of this date there has been no substitution of counsel, no new counsel has entered an

appearance, and apparently the entire 75-day period that was requested has been

wasted. . . . The requested extensions of time, although not formally granted by the

Court, have long since passed, and the plaintiff has done nothing.” J.A. at 9. The judge

stated that under these circumstances she was inclined to dismiss RMTEC’s claim with

prejudice for failure to prosecute. After conferring together, the parties stated to the

court that they were close to reaching a settlement agreement, and requested three

weeks to work out the details. The district judge granted this request, stating that she

would “go ahead and enter a dismissal order today and stay its effectiveness for 30

days.” J.A. at 13. The parties ultimately were unable to reach a settlement agreement,

and the district court’s order dismissing the case became effective on May 21, 2007.

RMTEC timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

                                      DISCUSSION

       A dismissal for failure to prosecute under Federal Rule of Civil Procedure 41(b) 3

is a procedural issue not unique to patent law, which we review under regional circuit

law. Mitutoyo Corp. v. Cent. Purchasing, LLC, 499 F.3d 1284, 1290 (Fed. Cir. 2007).

The Tenth Circuit reviews a dismissal with prejudice under Rule 41(b) for abuse of

       3
              Although the district court referred, both in the hearing and in the dismissal
order, to Rule 41(a)(2), which governs voluntary dismissal by court order, the record is
clear and the parties agree that the dismissal was based on RMTEC’s failure to
prosecute this case, and was therefore a dismissal under Rule 41(b).

2007-1473                                4
discretion. Rogers v. Andrus Transp. Servs., 502 F.3d 1147, 1152 (10th Cir. 2007).

“An abuse of discretion occurs when a district court makes ‘a clear error of judgment or

exceed(s) the bounds of permissible choice in the circumstances,’” by relying upon “an

erroneous conclusion of law or upon clearly erroneous findings of fact.” Ecclesiastes

9:10-11-12, Inc. v. LMC Holding Co., 497 F.3d 1135, 1143 (10th Cir. 2007).

       A district court is permitted, as the court in this case did, to dismiss an action sua

sponte for failure to prosecute. Olsen v. Mapes, 333 F.3d 1199, 1204 n.3 (10th Cir.

2003). Before dismissing an action with prejudice under Rule 41(b), in the Tenth Circuit

a district court “ordinarily should consider” a nonexhaustive list of five factors: “(1) the

degree of actual prejudice to the other party; (2) the amount of interference with the

judicial process; (3) the litigant’s culpability; (4) whether the court warned the party in

advance that dismissal would be a likely sanction for noncompliance; and (5) the

efficacy of lesser sanctions.”    Ecclesiastes, 497 F.3d at 1143.        The court should

ordinarily evaluate these factors on the record, and should dismiss only “when ‘the

aggravating factors outweigh the judicial system’s strong predisposition to resolve cases

on their merits.’” Id. at 1144 (citation omitted); see also Ehrenhaus v. Reynolds, 965

F.2d 916, 921 (10th Cir. 1992).

       RMTEC argues that the district court abused its discretion because it did not

explicitly consider each of the five factors listed above. We disagree. Although the

district court did not explicitly recite the factors, the Tenth Circuit does not require such

a recitation. It has reversed dismissals with prejudice when a district court’s failure to

consider the factors supporting such a dismissal “does not permit [the court] to make an

informed decision of whether the trial court adequately considered the criteria relevant

2007-1473                                 5
to deciding the appropriate sanction.” Mobley v. McCormick, 40 F.3d 337, 341 (10th

Cir. 1994) (reversing Rule 41 dismissal when district court’s three-paragraph order did

not consider any criteria at all); see also Procter & Gamble Co. v. Haugen, 427 F.3d

727, 738 (10th Cir. 2005) (reversing Rule 37 dismissal when record did not permit “any

meaningful review of the trial court’s decision”). However, in the closely related area of

sanctions for discovery noncompliance, the Tenth Circuit applies the same five-factor

test to determine whether dismissal with prejudice is appropriate, 4 and has made clear

that even when the factors are not recited, reversal is not required. In Archibeque v.

Atchison, Topeka, & Sante Fe Railway Co., 70 F.3d 1172 (10th Cir. 1995), the district

court dismissed the case with prejudice for discovery violations, noting in its order that

the failures were not mere oversight; that the defendant was irreparably prejudiced; and

that the plaintiff’s conduct seriously interfered with the judicial process. Id. at 1174. The

Tenth Circuit affirmed, noting that although “the court did not evaluate the [five] factors

on the record,” it “made clear the reasons for its dismissal of the action in its Order, and

its decision [was] fully supported by the record.” Id. at 1175. In this case, the district

court did consider most if not all of the five relevant five factors at the April 20, 2007,

hearing. With respect to each of the five factors, the record supports the district court’s

decision to dismiss.

       With regard to the first factor, the district court extensively discussed the delay

caused by RMTEC’s failure to retain new patent counsel and to meet the deadlines of

October 1, November 1, November 9, and November 17. While the district court did not

       4
              See Mobley, 40 F.3d at 340 (finding “no principled distinction” between
dismissals with prejudice based on Rule 37 and Rule 41).

2007-1473                                 6
explicitly discuss prejudice, the Tenth Circuit has recognized that such delays are

inherently prejudicial to a defendant, who “has a legitimate interest in bringing the

matter to closure within a reasonable time.” Rogers, 502 F.3d at 1152; see also Jones

v. Thompson, 996 F.2d 261, 264 (10th Cir. 1993) (finding that “the Plaintiffs have

prejudiced the Defendants by causing delay and mounting attorney’s fees”).

      The second factor, interference with the judicial process, is satisfied when a

plaintiff “ignore[s] court orders and . . . hinder[s] the court’s management of its docket

and its efforts to avoid unnecessary burdens on the court and the opposing party.”

Jones, 996 F.2d at 265.      Here, RMTEC allowed several deadlines to pass without

requesting extensions of time.      Even when extensions were granted, these new

deadlines were not met. The district court noted that, despite the court’s statement in its

November 2 order that no further extension of deadlines would be granted, RMTEC one

week later filed a second motion seeking further extensions; that “[i]t has been almost a

year since the plaintiff recognized [it] needed new patent counsel, and [it has] not gotten

new patent counsel,” J.A. at 9; and that the case was not ready to proceed to final

pretrial conference or trial as scheduled. Consistent with Jones, these findings support

the conclusion that RMTEC’s actions in this case interfered with the judicial process.

      The third factor, the litigant’s culpability, was addressed by the district court’s

findings. The district court clearly found that RMTEC was responsible for its failure to

prosecute the case, noting that the party had allowed nearly a year to pass, from the

time that RMTEC learned in April 2006 that patent counsel planned to withdraw to the

date of the April 2007 hearing, without finding substitute patent counsel, and that it had

“wasted” the 75-day period it requested in order to retain new counsel and assist that

2007-1473                                7
counsel in “getting up to speed” in the case. J.A. at 8-9. RMTEC argues that the district

court itself is to blame for the delay, because the court did not provide sufficient time for

any new counsel to prepare and prosecute the case. But here there were missed

deadlines long before RMTEC requested an extension to secure new counsel.

       Even in a case where an extension request was properly filed, the Tenth Circuit

rejected a similar argument. In Jones, the plaintiffs argued that they were not at fault for

failing to retain replacement counsel, because the district court had denied a motion to

extend discovery deadlines by sixty days. 996 F.2d at 265. The Tenth Circuit found

that this did not mitigate their culpability because they “ha[d] not shown that any law firm

would represent them had the sixty-day extension been granted,” and had only offered

an unsigned agreement specifying that a particular lawyer would represent them if

certain other conditions were met. Id. Here, RMTEC offered only a general statement

in its January 23, 2007, motion that “a local law firm has expressed an interest in

stepping in on behalf of RMTEC in the event this Court agrees to extend the pending

deadlines.” J.A. at 104-05. Furthermore, although this prospective counsel attended

the April 20, 2007, hearing and was invited by the court to comment, he offered no

indication that he would be willing, even conditionally, to represent RMTEC in this

action. In light of these facts, we cannot say that the district court’s finding of culpability

was clearly erroneous.

       As to the fourth factor, we note that notice is not required in all cases. See Link

v. Wabash R.R. Co., 370 U.S. 626, 632 (1962) (“Nor does the absence of notice as to

the possibility of dismissal . . . necessarily render such a dismissal void.”); Ecclesiastes,

497 F.3d at 1149 (stating that “notice is not a prerequisite for dismissal”). In any event,

2007-1473                                  8
even if the warning of potential dismissal in the April 19, 2006, scheduling order is read

as not encompassing the previously scheduled deadlines, the district court here did

provide notice. After notifying the parties that it was inclined to dismiss under Rule 41,

the court provided RMTEC an opportunity to present argument with regard to such

dismissal. Also, the court stayed the dismissal order for thirty days to provide RMTEC

an opportunity to request “further relief or modification of [the] order.” J.A. at 17. No

such request was made.

       Finally, the fifth factor directs courts to consider whether lesser sanctions, such

as dismissal without prejudice, would be effective. Here the district court did not simply

grant dismissal because of the missed deadlines. First the court conditionally extended

three deadlines, one of which RMTEC had already missed, to permit RMTEC time to

secure new counsel. See Meade v. Grubbs, 841 F.2d 1512, 1520-21 (10th Cir. 1988)

(court should have considered pending motion to extend before dismissing when no

previous extensions had been granted).        Additionally, the court imposed the lesser

sanction of staying the dismissal order for thirty days to allow the parties to reach a

settlement agreement or request “further relief or modification of [the] order.” J.A. at 17.

The district court was aware of the possibility of dismissing the action without prejudice,

and concluded that such a sanction would not be appropriate. See Nasious v. Two

Unknown B.I.C.E. Agents, 492 F.3d 1158, 1163 (10th Cir. 2007) (dismissal without

prejudice or partial dismissal are possible alternative sanctions).

       Because the district court explicitly considered most of the relevant factors and

the record as to each of the five factors supports dismissal, we conclude that the court

did not abuse its discretion in dismissing the case with prejudice.

2007-1473                                9
                                    CONCLUSION

     For the foregoing reasons, the district court’s decision is affirmed.

                                        COSTS

     No costs.

2007-1473                              10