CSU, L.L.C. v. Xerox Corp.

202 F.R.D. 275, 2001 U.S. Dist. LEXIS 10580, 2001 WL 950020
CourtDistrict Court, D. Kansas
DecidedJuly 13, 2001
DocketNo. CIV. A. 94-2102-KHV
StatusPublished
Cited by2 cases

This text of 202 F.R.D. 275 (CSU, L.L.C. v. Xerox Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CSU, L.L.C. v. Xerox Corp., 202 F.R.D. 275, 2001 U.S. Dist. LEXIS 10580, 2001 WL 950020 (D. Kan. 2001).

Opinion

MEMORANDUM AND ORDER AND ORDER TO SHOW CAUSE

VRATIL, District Judge.

After nearly ten year’s of litigation, millions of dollars in attorneys’ fees and numerous court orders including a final order of dismissal earlier this year, this case now boils down to the choice between (1) a settlement which requires CSU to pay $1.4 million over five year's at 8.5% interest and (2) a settlement which requires CSU to pay $1.4 million over two years at 8.5% interest. Xerox — a Fortune 500 corporation with numerous worldwide affiliates — has decided to re-load its litigation weapons to force CSU — a company which annually purchases more than $5 million in Xerox copier parts and pays $1 million in Xerox license fees — to accept the latter choice or file for bankruptcy. Basic finance and business principles, as well as common sense, would appear to dictate against such a strategy. This dispute apparently must proceed, however, because it involves Xerox’s arch-enemy in the copier service industry — CSU. In its latest maneuver, Xerox asks the Court to vacate its final judgment and allow the battle to go forward. See Xerox’s Motion For Relief From Judgment Or Order (Doc. #36) filed June 15, [277]*2772001. For reasons stated below, the Court overrules in part and defers in part Xerox’s motion.1

Factual Background

On March 24, 1992, independent service organizations (“ISOs”), i.e. businesses who serviced Xerox high volume copiers and planters, filed a class action against Xerox. See R & D Bus. Sys., et al. v. Xerox Corp., No. 2-92-CV-042 (E.D.Tex.). On March 10, 1994, as the parties sought court approval for a settlement in that ease, CSU filed a request for exclusion. It also filed the instant action, alleging that Xerox had violated the federal antitrust laws by refusing to sell copier parts and license diagnostic software to ISOs. Xerox filed counterclaims which alleged that CSU had infringed Xerox patents for various copier parts, Xerox copyrights for diagnostic software and service manuals, and Xerox trademarks associated with copying machines.

In March 1997, the parties settled the Xerox trademark infringement claims. See Order (Doc. # 521 in MDL No. 1021) filed March 6, 1997. In a series of rulings, the Court granted summary judgment in favor of Xerox on the CSU antitrust claims and in favor of Xerox on the issue of CSU liability on the patent and copyright infringement counterclaims. See In re Independent Service Organizations Antitrust Litigation, 989 F.Supp. 1131 (D.Kan.1997); 1997 WL 450028 (July 17, 1997); 964 F.Supp. 1479 (D.Kan. 1997); 964 F.Supp. 1469 (D.Kan.1997); 964 F.Supp. 1454 (D.Kan.1997). The parties agreed to defer trial of the claims for patent damages until after appeal of the rulings as to patent infringement liability. After a trial to the Court on copyright infringement damages, the Court awarded Xerox copyright infringement damages totaling $1,039,282.00. 23 F.Supp.2d 1242, 1253 (D.Kan.1998). The Court also found that “an award of attorney’s fees in this case would serve to make Xerox whole, to deter infringement, to dissuade CSU’s disdain for the copyright laws, and to encourage the assertion of colorable copyright claims.” Id. at 1254 (internal quotations and citations omitted). Because of the overlap between attorneys’ fees on its copyright and patent claims, Xerox and CSU agreed to defer resolution of the copyright attorneys’ fee issue until after trial of the Xerox claim for patent damages.

On January 8, 1999, the Court entered an order which directed the clerk to enter judgment in favor of Xerox on the CSU antitrust claims and the Xerox copyright infringement counterclaims. See Order (Doc. # 722 in MDL No. 1021). The Court noted that its liability ruling on the patent infringement claims, including its rejection of the CSU patent misuse defense, was immediately appealable as of right under 28 U.S.C. § 1292(c)(2). Pursuant to Rule 54(b), Fed.R.Civ.P., the Court certified that there was no reason to delay entry of final judgment on the patent claims until an appeal of the antitrust and copyright claims. On January 11, 1999, the clerk entered judgment in accordance with the Court’s order dated January 8, 1999. See Judgment (Doc. #34 in Case No. 94-2102).

CSU appealed the Court’s rulings on the antitrust, patent infringement and copyright infringement claims. On February 17, 2000, the Court of Appeals for the Federal Circuit affirmed. 203 F.3d 1322 (Fed.Cir.2000). On February 20, 2001, the United States Supreme Court denied the CSU petition for a writ of certiorari. -U.S. -, 121 S.Ct. 1077, 148 L.Ed.2d 954 (2001).

In March 2001, the parties reached an agreement in principle to settle the remaining claims. Court staff consulted with counsel and, after the 25-day period for filing a petition for rehearing with the Supreme Court had expired, the Court entered the following order:

Counsel for the parties listed above have orally confirmed they have settled and compromised the claims in this lawsuit.

IT IS THEREFORE ORDERED that the clerk administratively terminate this action [278]*278without prejudice to the rights of the parties to reopen the proceedings for good cause shown, for the entry of any stipulation or order, or for any other purpose required to obtain a final determination of the litigation. On or before April 16, 2001, the parties shall file a stipulation of dismissal signed by the parties above who have appeared in the action, under Rule 41(a)(1) of the Federal Rules of Civil Procedure. If no such stipulation is received within the specified time and the parties have not reopened for the purpose of obtaining a final determination, this order shall constitute, for purposes of Rule 58 of the Federal Rules of Civil Procedure, the Court’s entry of final judgment of dismissal with prejudice under Rule 41(a)(2).

Order (Doc. #35) filed March 26, 2001. On March 26, the clerk entered the order on the docket as follows:

ORDER ENTERED: by Judge Kathryn H. Vratil administratively terminating this action without prejudice; On or before 4/16/01, the parties shall file a stipulation of dismissal; if no such stipulation is received within the specified time and the parties have not reopened for the purpose of obtaining a final determination, this order shall be considered the court’s entry of final judgment of dismissal terminating case (cc: all counsel) (ck) [Entry date 03/26/01] [Edit date 03/26/01] [2:94cv2102],

The docket entry reflects that the clerk mailed copies of the order to all counsel of record, including four attorneys for CSU and eight attorneys for Xerox. Attorneys of record for Xerox included three law firms and in-house counsel. Xerox claims that two individual attorneys, each associated with Arnold & Porter, did not receive a copy of the order.2

Although the parties had not agreed on a final written settlement agreement as of March 26, 2001, neither party asked the Court to reopen the case then, or by the April 16, 2001 deadline. The parties continued to negotiate throughout April and May.

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Cite This Page — Counsel Stack

Bluebook (online)
202 F.R.D. 275, 2001 U.S. Dist. LEXIS 10580, 2001 WL 950020, Counsel Stack Legal Research, https://law.counselstack.com/opinion/csu-llc-v-xerox-corp-ksd-2001.