Opinion
No. C 00-3633 CRB
December, 18 2000
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
Now before the Court is the defendants' motion to dismiss, or, in the alternative, to transfer the action and consolidate it with another pending suit. Having carefully considered the parties' papers and with the benefit of oral argument on December 15, 2000, the defendants' motion to dismiss is hereby GRANTED.
BACKGROUND
This is a patent infringement suit brought by the plaintiff VISX, Inc. ("VISX") against the defendants Dr. Antoine Garabet and his corporation Antoine L. Garabet, M.D., Inc. doing business as the Laser Eye Center (collectively, "Garabet" or "the defendants"). It is not, however, an isolated infringement suit. Instead, there are several other pending actions involving the same (and other) parties and nearly identical claims.
In December 1998, Nidek, Inc. ("Nidek") obtained approval from the U.S. Food and Drug Administration to sell the Nidek EC-5000 excimer laser system in the United States. VISX, who was already selling a similar system in this country at the time, subsequently sued four of Nidek's customers for patent infringement in separate actions filed in the Central District of California ("the First Garabet Action"), the Southern District of California ("the Kawesch Action"), the Eastern District of Michigan ("the Fiander Action"), and the Northern District of Ohio ("the Wiley Action") (collectively, the "customer suits"). The Judicial Panel on Multidistrict Litigation transferred the actions to this Court for coordinated pre-trial proceedings.
Shortly after the actions were coordinated and transferred, VISX entered into a stipulation with Nidek and its four customers to limit the patents VISX would assert in the suits. VISX agreed to withdraw all claims of infringement of the `762, `418, `148, and `913 patents and to file amended complaints asserting infringement only of the `843 patent. VISX reserved the right to amend the complaints further to add the `388 patent after the U.S. Patent and Trademark Office ("PTO") issued a certificate of reexamination for that patent. Once the PTO issued the certificate of reexamination, VISX obtained the consent of Nidek and its customers to amend VISX's complaints to add the `388 patent. On September 27, 2000, this
VISX then served amended complaints in three of the four actions to add the `388 patent. VISX chose not to amend the complaint in the First Garabet Action, leaving only the `843 patent at issue in that suit. Instead, on October 2, 2000, VISX filed the present complaint ("the Second Garabet Action") in this district, alleging infringement of both the `843 patent and the `388 patent. VISX asserts that it filed the Second Garabet Action here upon discovering that Garabet had opened clinics in San Francisco and San Jose in which he uses Nidek devices. In filing the complaint in the Second Garabet Action, VISX also filed a Notice of Pendency of Other Actions and Proceedings in which it recognized that the Second Garabet Action "involves substantially all of the same parties and involves a material part of the same subject matter" as the First Garabet Action. See Frahn Decl., Nov. 13, 2000, Ex. K, at 1.
After a status conference with the Court on October 27, 2000, the parties conferred regarding the pending motion to dismiss. VISX indicated that it wanted to withdraw the First Garabet Action without prejudice. See Tringali Decl., Dec. 1, 2000, § 3. The defendants declined that offer on the basis that the pleadings in that case are closed, so the defendants would be entitled to a dismissal with prejudice under Federal Rule of Civil Procedure 41. See id. § 4. Instead, the defendants offered (and still offer) to allow VISX to amend us complaint in the First Garabet Action to add the `388 patent to its infringement claims, even though the pleadings are closed. See id. § 5.
Although the parties are somewhat oblique about the matter in their papers, it seems that the parties' disagreement centers on the indictment of Garabet on Medicare fraud charges on September 27, 2000 in the Central District of California. In the defendants' view, Garabet's indictment — which they claim involved surgery performed prior to the alleged infringement at issue here and without the use of the Nidek system — is completely irrelevant to the First Garabet Action. VISX, on the other hand, asserts that the defendants and Nidek merely want to avoid a trial with a defendant customer who might be subject to cross-examination about the Medicare fraud charges.
DISCUSSION
The defendants have now moved to dismiss the Second Garabet Action, or, in the alternative, to transfer and consolidate it with the First Garabet Action pending in the Southern District of California.
I. THE MOTION TO DISMISS
Under the "first to file" rule, also known as the federal comity doctrine, a district court has the discretion to transfer, stay, or dismiss an action when a complaint involving substantially similar parties and issues has already been filed in another federal court. See Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765, 769 (9th Cir. 1997);Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622, 623 (9th Cir. 1991); Nakash v. Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989); see also Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976) (noting that "the general principle is to avoid duplicative litigation"). The rule was developed to promote judicial economy and "should not be disregarded lightly." Alltrade, 946 F.2d at 625 (quotingChurch of Scientology v. United States Dep't of the Army, 611 F.2d 738, 750 (9th Cir. 1979)). Appellate courts review a district court's decision to accept or decline jurisdiction based on the first to file rule for abuse of discretion. See Alltrade, 946 F.2d at 625.
Here, there is little question that the parties and issues involved in the First Garabet Action and the Second Garabet Action are at least substantially similar and are in fact practically identical. Both cases involve the alleged infringement of the `843 patent by the defendants. There are only two differences. First, the First Garabet Action names Dr. Randa M.R. Garrana as a defendant; for reasons that remain unclear, Dr. Garrana is not a party in the Second Garabet Action. See VISX's Opposition to Defendants' Motion, Nov. 22, 2000, at 2 n. 1. Second, the Second Garabet Action involves the alleged infringement of the `388 patent, which is not part of VISX's complaint in the First Garabet Action. However, the defendants have expressed a willingness to permit VISX to amend its complaint in the First Garabet Action to include the `388 patent as VISX did in the other three customer suits. Those differences are not enough to compel this Court to exercise its jurisdiction over the Second Garabet Action.
VISX makes two arguments in opposition to the defendants' motion. First, VISX contends that the Northern District is the more convenient forum for this litigation, and it notes that the defendants previously offered to consent to venue in this district. Second, VISX argues that it would be more convenient for this Court to preside over both the Nidek action and the Second Garabet Action together rather than this Court presiding over the Nidek action and the Central District presiding over the Second Garabet Action. VISX believes that having the Court exercise jurisdiction over both the manufacturer action and (at least) one of the customer actions will be more efficient since the Court will become more familiar with the technology through the course of Markman and other pre-trial proceedings.
Neither of VISX's arguments are persuasive. If it were truly more convenient to litigate in this district, VISX should have filed its complaint against the defendants here in the first place (or accepted the defendants' offer to litigate here) rather than filing in the Central District. Moreover, because the First Garabet Action has been proceeding in the Central District for over a year, there is no reason to move it now.
As for VISX's second argument regarding the consolidation of the Nidek and Second Garabet Action trials, such a determination is not properly before the Court at this time. No party has moved to consolidate the cases (a motion that would undoubtedly be premature). Instead, VISX merely asks the Court to keep its option to consolidate open, since dismissing the Second Garabet Action or transferring it to the Central District would mean that the infringement trial would have to occur there after the MDL pre-trial proceedings are complete here.
While the Court appreciates the complexity of patent litigation, the MDL coordination is sufficient to produce judicial economies for the customer suits. There is no reason to treat the Central District suit any different than the other three customer suits simply because venue might be appropriate here for the First Garabet Action but not the remaining customer suits. It seems to the Court that VISX may have filed the Second Garabet Action merely so that it could consolidate that suit with the suit against Nidek for patent infringement, thereby enabling VISX to present evidence regarding Garabet's indictment against Nidek.
Thus, because the defendants are willing to VISX to amend its in the permit complaint First Garabet Action to include the `388 patent (a representation that was repeated at oral argument), the Court finds that the parties and issues in this Second Garabet Action are substantially similar to the parties and issues in the First Garabet Action. As such, the Court shall exercise its discretion under the first to file rule and GRANT the defendants' motion to dismiss the present complaint without prejudice.
II. THE MOTION TO TRANSFER AND CONSOLIDATE
Because the Court has decided to grant the defendants' motion to dismiss, it need not consider the defendants' alternative motion to transfer and consolidate the action.
CONCLUSION
The defendants' motion to dismiss is GRANTED because the defendants have agreed to allow VISX to amend its complaint in the First Garabet Action to assert the `388 patent. VISX's complaint in the Second Garabet Action is therefore DISMISSED without prejudice. As a result, the Court need not consider the defendants' motion to transfer and consolidate the action.
IT IS SO ORDERED.