Benger Laboratories Ltd. v. R. K. Laros Co.

24 F.R.D. 450, 124 U.S.P.Q. (BNA) 368, 2 Fed. R. Serv. 2d 123, 1959 U.S. Dist. LEXIS 4242
CourtDistrict Court, E.D. Pennsylvania
DecidedDecember 3, 1959
DocketCiv. A. Nos. 24540, 26387
StatusPublished
Cited by19 cases

This text of 24 F.R.D. 450 (Benger Laboratories Ltd. v. R. K. Laros Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Benger Laboratories Ltd. v. R. K. Laros Co., 24 F.R.D. 450, 124 U.S.P.Q. (BNA) 368, 2 Fed. R. Serv. 2d 123, 1959 U.S. Dist. LEXIS 4242 (E.D. Pa. 1959).

Opinions

VAN DUSEN, District Judge.

This suit was initially instituted on January 22, 1958, in the United States District Court for the Northern District of Iowa by Benger Laboratories, Limited (hereinafter “Benger”) against Fort Dodge Laboratories, Inc. (hereinafter “Fort Dodge”), alleging patent infringement and requesting damages and an injunction. On May 31, 1958, R. K. Laros Company (hereinafter “Laros”) was allowed to intervene as a defendant, and on May 1, 1959, Fort Dodge was dismissed from the case. In the meantime, a similar action was commenced in this District by Benger against Laros. On May 15, 1959, Judge Graven signed an order transferring the Iowa suit to this District and the two cases were consolidated for purposes of these proceedings.

On August 21, 1959, the defendant, Laros, filed the motion currently under consideration. It requests that Armour and Company (hereinafter “Armour”) and Lakeside Laboratories, Inc. (hereinafter “Lakeside”) be joined as plaintiffs under F.R.Civ.P. rules 19 and 21, 28 U.S.C., or that the action be dismissed under F.R.Civ.P. rule 12(b) (7). In support of its motion, Laros asserts that the rights under the patent in issue which each of these firms has received from Benger qualifies each of them as an assignee entitled to bring a suit in its own name under the test laid down in Waterman v. Mackenzie, 1891, 138 U.S. 252, 11 S.Ct. 334, 34 L.Ed. 923. This right to sue, the argument continues, carries with it a corresponding obligation to become a party in any action involving their interests under the patent in order to protect the defendant against further suits based on the same patent and claims of infringement, even though it successfully defends the first suit. Therefore, Laros concludes, “Waterman assignees” should be considered indispensable parties to this action and if they are not, or cannot be joined as parties, the suit should be dismissed.

Assuming that Armour and Lakeside qualify as assignees under the Waterman test, and that assignees of this sort are indispensable parties, the mo[452]*452tion still cannot be granted. At the oral argument on this motion on October 26, 1959, counsel for the defendant stated that he had received the agreements between Benger and Armour and Benger and Lakeside, transferring certain rights under the patent in issue, sometime in August 1958. These agreements were .ordered to be produced for the use of the defendant Laros by Judge Graven on August 12, 1958 (Document No. 42 in C. A. 26387), when acting on a motion of defendant Laros filed on August 6, 1958 (Document No. 38 in C. A. 26387). The motion to join Armour and Lakeside was not made until a year later, on August 21, 1959 (Document No. 14 in C. A. 24540). In the meantime, several depositions were taken in various parts of the country,1 Fort Dodge was dismissed as a defendant, the action was transferred from Iowa to Pennsylvania; also a motion of Cutter Laboratories to intervene as a defendant has been considered, and the action is about ready for a final series of pre-trial conferences.

If either Armour or Lakeside are joined now, the depositions of these people may have to be taken again, they may present motions concerning the presence of Fort Dodge and Cutter Laboratories in this action, or they may seek a transfer of the suit since they are not bound ' by the prior proceedings on these matters. In addition, it would be necessary for them to institute a discovery program in order to prepare for trial. All this would postpone the trial and delay final adjudication of this matter. It must be noted that joinder of Lakeside and Armour is not necessary in order to protect their interests as they are not bound by this litigation. Laros requests their joinder for this very reason in order to protect itself against future suits.2 As stated above, Laros had the information on which this motion is based for a full year. Under the circumstances, it is not in the interests of justice and sound judicial administration to grant the motion made at this late date.

In my opinion, dismissal is not automatic under the Federal Rules upon a showing that an indispensable party has not been joined. This is so in spite of the fact that this defense is based upon a defect considered to be on a par with lack of jurisdiction over subject matter and failure to state a claim or legal defense to the extent that it can be raised by the parties at any time during the proceedings. F.R.Civ.P. rule 12 (h) cannot be interpreted to mean that a party with the necessary information to make a motion for joinder of an indispensable party at his disposal can sit back and raise it at any point in the proceedings, when the only effect of the motion under the circumstances would be to protect himself and not the person alleged to be indispensable. Such an interpretation would violate the direction of F.R.Civ.P. rule 1 that the rules “shall be construed to secure the just, speedy, and inexpensive determination of every action.”

In Parker Rust-Proof Co. v. Western Union Telegraph Co., 2 Cir., 1939, 105

[453]*453F.2d 976, the court reversed a lower court decree dismissing a bill for issuance of a patent because of the lack of an indispensable party defendant. The court stated in its opinion at page 979, of 105 F.2d:

“Hence, in the absence of special circumstances making it inequitable to require Curtin to be joined, we should regard him as an indispensable party, as did the district court.
“The doctrine that one whose interests will be affected by a decree must be made a party to the suit is an equitable doctrine, and a court, of equity should not apply it, we think, where special circumstances would make its application inequitable. Such special circumstances exist in the case at bar.”

One of these circumstances stated at page 979 of, 105 F.2d was as follows:

“The only purpose of such an objection was to protect Curtin’s equitable rights and prevent his being concluded without a hearing; the Curtin-Howe Corporation had no recognizable interest of its own in balking the suit because of Curtin’s absence; nor had Western Union. Under these circumstances, we hold that the conduct of Curtin and his company was so inequitable that a court of equity should not sustain the objection.”

In conclusion, the court stated at page 980, of 105 F.2d:

“While no authority has been found dealing with facts at all similar, the general principle has long been recognized that, as the object of the rule respecting indispensable parties is to accomplish justice between all the parties in interest, courts of equity will not suffer it to be so applied as to defeat the very purposes of justice.”

While the Parker case did not involve the Federal Rules of Civil Procedure, since it was tried before these rules became effective, the principles enunciated in that opinion are sound and should be just as applicable under the present rules, which contain no definition of “indispensable party.”3

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24 F.R.D. 450, 124 U.S.P.Q. (BNA) 368, 2 Fed. R. Serv. 2d 123, 1959 U.S. Dist. LEXIS 4242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/benger-laboratories-ltd-v-r-k-laros-co-paed-1959.