Court Opinion

ID: 4557746
Source: CourtListenerOpinion
Date Created: 2020-08-21 16:00:34.71791+00
Date Added: 2024-06-11T09:27:23.963295
License: Public Domain

Case: 19-1558   Document: 51     Page: 1   Filed: 08/21/2020

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                 RICHARD SOWINSKI,
                   Plaintiff-Appellant

                            v.

       CALIFORNIA AIR RESOURCES BOARD,
                Defendant-Appellee
              ______________________

                       2019-1558
                 ______________________

    Appeal from the United States District Court for the
 Northern District of California in No. 5:18-cv-03979-LHK,
 Judge Lucy H. Koh.
                  ______________________

                Decided: August 21, 2020
                 ______________________

    ANTHONY GRAHAM, Graham & Martin LLP, Newport
 Beach, CA, for plaintiff-appellant.

     JONATHAN WIENER, Office of the Attorney General, Cal-
 ifornia Department of Justice, San Francisco, CA, for de-
 fendant-appellee. Also represented by XAVIER BECERRA;
 DAVID A. ZONANA, Oakland, CA; ROBERT DONALD
 SWANSON, Sacramento, CA.
                   ______________________

   Before NEWMAN, LOURIE, and SCHALL, Circuit Judges.
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 2               SOWINSKI v. CALIFORNIA AIR RESOURCES BOARD

 NEWMAN, Circuit Judge.
     Dr. Richard Sowinski appeals the dismissal, on the
 ground of res judicata, of his patent infringement suit
 against the California Air Resources Board. 1 He raises two
 principal arguments: (1) that res judicata does not apply
 because his present complaint seeks damages only for in-
 fringement that occurred after conclusion of his prior suits
 and (2) that res judicata does not apply because the prior
 suit was resolved on procedural grounds, without reaching
 the merits of infringement. We conclude that the district
 court’s decision is in accordance with law and precedent
 and is within the court’s discretionary authority, and is af-
 firmed.
                        BACKGROUND
 The first set of State and Federal lawsuits
     On November 24, 2015, Dr. Sowinski filed suit in the
 California Superior Court in Orange County, against the
 California Air Resources Board (“CARB”) and several indi-
 vidual and corporate defendants associated with CARB.
 The three counts of the complaint were (1) infringement of
 United States Patent No. 6,601,033 (“the ’033 patent”), (2)
 violation of California Welfare & Institutions Code elder
 abuse laws, and (3) violation of California Business & Pro-
 fessions Code § 17200 et seq. All three counts are associ-
 ated with infringement of the ’033 patent, entitled
 “Pollution Credit Method Using Electronic Networks,”
 which describes and claims an electronic method and ap-
 paratus for validating and trading consumer pollution-

     1  Sowinski v. Cal. Air Res. Bd., No. 18-CV-3979-
 LHK, 2018 WL 9841114 (N.D. Cal. Sept. 25, 2018) (“Dist.
 Ct. Op.”); id., (N.D. Cal. Jan. 18, 2019) (Dkt. No. 29)
 (“Recon. Op.”).
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 SOWINSKI v. CALIFORNIA AIR RESOURCES BOARD                   3

 control tax credits. Dr. Sowinski stated that the ’033 pa-
 tent is infringed by California’s Cap-and-Trade Program
 auctions.
     On the motion of a defendant, the suit was removed to
 the United States District Court for the Central District of
 California. Pre-trial proceedings included the filing of sev-
 eral motions to dismiss. After Dr. Sowinski moved to file
 an amended complaint, the parties filed a joint stipulation
 to withdraw the amended complaint and postpone the
 hearing on the motions to dismiss. The joint stipulation
 included the statement that the motions to dismiss were
 “potentially case dispositive.” CARB Br. 8.
     Dr. Sowinski did not file a response to the motions to
 dismiss. After the period set in the local rules for such re-
 sponse, the district court dismissed the complaint “pursu-
 ant to Central District of California Local Rule 7-12, which
 provides that the failure to file a document within a dead-
 line ‘may be deemed consent to the granting or denial of
 the motion.'” Dist. Ct. Op. at *2. The dismissal was with
 prejudice and without leave to amend.
      Dr. Sowinski appealed to the Federal Circuit. We rec-
 ognized Ninth Circuit precedent that failure to oppose a
 motion to dismiss may lead to dismissal with prejudice.
 See, e.g., Owens v. Kaiser Foundation Health Plan, Inc.,
 244 F.3d 708, 711, 714 (9th Cir. 2001). We affirmed the
 dismissal, concluding that the district court had considered
 all of the relevant factors as well as the applicable case law,
 and that there was no clear error of judgment. We con-
 cluded that the dismissal was properly with prejudice be-
 cause Dr. Sowinski “stipulated that ‘the Motions to Dismiss
 are potentially case dispositive,’ but nevertheless conceded
 and reaffirmed that [he] failed to oppose.” Sowinski v. Cal.
 Air Res. Bd., 720 F. Appx 615 (Fed. Cir. 2017) (“Sowinski
 I”), at 619. Our mandate issued on December 18, 2017.
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 4               SOWINSKI v. CALIFORNIA AIR RESOURCES BOARD

 The second set of State and Federal lawsuits
     On January 31, 2018 Dr. Sowinski filed a complaint in
 the Superior Court of California in Orange County. The
 complaint was substantially identical to his prior com-
 plaint, except that he sought damages only for infringe-
 ment after the decision in Sowinski I. He soon voluntarily
 dismissed the Superior Court action, and on July 2, 2018
 he filed the same complaint in the United States District
 Court for the Northern District of California. The com-
 plaint stated the same three counts as in Sowinski I: in-
 fringement of the ’033 patent, violation of California elder
 abuse laws, and violation of the California Business & Pro-
 fessions Code. CARB was the only named defendant.
      Dr. Sowinski filed an application in the district court to
 proceed in forma pauperis. CARB moved for dismissal on
 several grounds: res judicata, Eleventh Amendment im-
 munity from suit, and patent invalidity. The district court
 dismissed the complaint on the ground of res judicata, ob-
 serving that the dismissal of the same claims in the prior
 litigation against the same defendant “was an adjudication
 on the merits.” Dist. Ct. Op. at *2. The court “[found] that
 the Complaint is frivolous and fails to state a claim upon
 which relief can be granted.” Id. at *3.
     This appeal followed.
                          DISCUSSION
     In reviewing a ruling of dismissal, “[t]he trial court’s
 dismissal should not be disturbed unless there is a definite
 and firm conviction that the court below committed a clear
 error of judgment in the conclusion it reached upon a
 weighing of the relevant factors.” Ferdik v. Bonzelet, 963
F.2d 1258, 1260 (9th Cir. 1992) (citations and quotation
 marks omitted). For review of the district court’s dismissal
 on the ground of res judicata, we apply the procedural law
 of the regional circuit, and any aspects unique to patent
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 SOWINSKI v. CALIFORNIA AIR RESOURCES BOARD                 5

 law are reviewed under Federal Circuit law. Acumed LLC
 v. Stryker Corp., 525 F.3d 1319, 1323 (Fed. Cir. 2008).
 Res judicata, or claim preclusion, may be based on
 failure to prosecute
      Res judicata arises when the prior case or claim was
 previously tried and the merits were adjudicated. “In civil
 cases, a claim generally may not be tried if it arises out of
 the same transaction or common nucleus of operative facts
 as another already tried.” Currier v. Virginia, 138 S. Ct.
2144, 2154 (2018). The Ninth Circuit applies the general
 rule that preclusion applies when the prior suit: “(1) in-
 volved the same ‘claim’ or cause of action as the later suit,
 (2) reached a final judgment on the merits, and (3) involved
 identical parties or privies.” Mpoyo v. Litton Electro-Opti-
 cal Sys., 430 F.3d 985, 987 (9th Cir. 2005) (quoting Sidhu
 v. Flecto Co., 279 F.3d 896, 900 (9th Cir. 2002)). See, e.g.,
 Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002)
 (same).
     Dr. Sowinski argues that the merits of patent infringe-
 ment were not adjudicated in Sowinski I, for the action was
 dismissed because he did not comply with the district
 court’s local rule for responding to a motion to dismiss. He
 argues that this was not a final judgment on the merits,
 because the dismissal was based on the technicality of a
 local deadline. He states that the imposition of res judicata
 on this basis is “manifestly unjust” because there was no
 trial of the question of infringement, and that if an in-
 fringement suit is now barred his patent is essentially in-
 validated because the CARB Cap-and-Trade Program is
 the only known infringing activity.
     The district court cited Johnson v. U.S. Department of
 the Treasury, 939 F.2d 820, 825 (9th Cir. 1991) for the hold-
 ing that “dismissal for failure to prosecute should be
 ‘treated as an adjudication on the merits for purposes of
 preclusion.’” Dist. Ct. Op. at *2. On Dr. Sowinski’s request
 for reconsideration, the district court cited the Federal
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 6               SOWINSKI v. CALIFORNIA AIR RESOURCES BOARD

 Circuit’s statement in Senju Pharmaceutical Co. v. Apotex
 Inc., 746 F.3d 1344, 1349 (Fed. Cir. 2014) that: “Claim pre-
 clusion will generally apply when a patentee seeks to as-
 sert the same patent against the same party and the same
 subject matter.” Recon. Op. at 2.
     Federal Rule of Civil Procedure 41(b) provides that a
 dismissal for failure to prosecute “operates as an adjudica-
 tion on the merits,” with exceptions not here applicable:
     41(b) Involuntary Dismissal; Effect. If the plain-
     tiff fails to prosecute or to comply with these rules
     or a court order, a defendant may move to dismiss
     the action or any claim against it. Unless the dis-
     missal order states otherwise, a dismissal under
     this subdivision (b) and any dismissal not under
     this rule—except one for lack of jurisdiction, im-
     proper venue, or failure to join a party under Rule
     19—operates as an adjudication on the merits. . . .
 The Federal Circuit has applied these principles. See, e.g.,
 Nystrom v. Trex Co., 580 F.3d 1281, 1284-85 (Fed. Cir.
 2009) (“In its simplest construct, [claim preclusion bars]
 the relitigation of a claim, or cause of action, or any possible
 defense to the cause of action which is ended by a judgment
 of the court.”); Senju, supra.
     We conclude that the district court properly applied
 preclusion on this ground.
 Preclusion may apply to claims that arise after the
 prior judgment
     Dr. Sowinski argues that preclusion cannot apply, as a
 matter of law, because he is seeking damages only for the
 period after conclusion of the Sowinski I litigation. He cites
 the principle that: “While the [prior] judgment precludes
 recovery on claims arising prior to its entry, it cannot be
 given the effect of extinguishing claims which did not even
 then exist and which could not possibly have been sued
 upon in the previous case.” Sowinski Br. 3-4. (quoting
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 SOWINSKI v. CALIFORNIA AIR RESOURCES BOARD                    7

 Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 328
 (1955)). He also cites Ninth Circuit precedent that
 “[f]ailure to gain relief for one period of time does not mean
 that the plaintiffs will necessarily fail for a different period
 of time.” Sowinski Br. 4 (quoting Harkins Amusement En-
 ters., Inc. v. Harry Nace Co., 890 F.2d 181, 183 (9th Cir.
 1989)). However, in those cases the second litigation re-
 lated to different conduct and different alleged violations
 or litigants, Lawlor, 349 U.S. at 328, or “facts which by the
 defendants’ own concession are at least 10 percent different
 from the facts alleged” in the previous litigation and that
 occurred after the previous litigation, Harkins, 890 F.2d at
 183.
     Dr. Sowinski alleges no different conduct or acts, and
 the defendant is the same. However, he argues that a
 claim “arising subsequent to a prior action . . . [is] not
 barred by res judicata” even if the new claim is “premised
 on facts representing a continuance of the same course of
 conduct.” Reply Br. 3 (internal quotation marks omitted).
 He cites Storey v. Cello Holdings, LLC, 347 F.3d 370 (2d
 Cir. 2003), for the position that “[c]laims arising subse-
 quent to a prior action need not, and often perhaps could
 not, have been brought in that prior action; accordingly,
 they are not barred by res judicata regardless of whether
 they are premised on facts representing a continuance of
 the same course of conduct.” Id. at 383 (internal quotation
 marks omitted).
      It is correct that when an act has been adjudged wrong-
 ful, a subsequent suit may be brought if the violation is re-
 peated. However, when the act has been adjudged not
 wrongful, its repetition cannot be challenged in a subse-
 quent suit. In Brain Life, LLC v. Elekta Inc., 746 F.3d 1045
 (Fed. Cir. 2014), the court considered the effect of a prior
 judgment of non-infringement; the court explained that
 preclusion does not apply to new or changed products or
 methods, but does apply when the accused products or
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 8               SOWINSKI v. CALIFORNIA AIR RESOURCES BOARD

 methods are essentially the same. Id. at 1054. The court
 summarized:
     The principle that, when an alleged infringer pre-
     vails in demonstrating noninfringement, the spe-
     cific accused device(s) acquires the “status” of a
     noninfringing device vis-à-vis the asserted patent
     claims is “[a]n essential fact of a patent infringe-
     ment claim” .… And, when the devices in the first
     and second suits are “essentially the same,” the
     “new” product(s) also acquires the status of a non-
     infringing device vis-à-vis the same accusing party
     or its privies.
Id. at 1057 (quoting Foster v. Hallco Mfg. Co., 947 F.2d 469,
 479-80 (Fed. Cir. 1991)). See Lawlor, 349 U.S. at 383 (a
 claim based on new and different facts is not precluded,
 whereas a claim based on the same facts is precluded).
      Here the accused CARB activity had been held not to
 be infringing, for Dr. Sowinski’s failure to respond to the
 motions to dismiss was treated as a judgment on the mer-
 its. He does not allege any different facts; to the contrary,
 his complaint states that CARB’s on-going activities are
 the same as existed for Sowinski I.
     The district court properly held that the dismissal in
 Sowinski I is res judicata, for CARB is charged with the
 same acts of infringement of the same patent. Although
 Dr. Sowinski stresses the inequity that he did not obtain
 resolution of the question of infringement, CARB points out
 that he had the opportunity to do so. The application of
 preclusion “encourages reliance on judicial decisions, bars
 vexatious litigation, and frees the courts to resolve other
 disputes,” Brown v. Felsen, 442 U.S. 127, 131 (1979). The
 district court acted within its discretion and in accordance
 with law, in applying res judicata. The dismissal is af-
 firmed.
                        AFFIRMED