Khalid v. Microsoft Corporation

Opinion

UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8

9 ATM SHAFIQUL KHALID, an individual CASE NO. C19-0130 RSM and on behalf of similarly situated, 10 XENCARE SOFTWARE, INC., ORDER DENYING PLAINTIFF’S MOTION FOR 11 Plaintiff, RECONSIDERATION AND PARTIALLY GRANTING 12 v. EXTENSION OF TIME TO FILE AMENDED COMPLAINT 13 MICROSOFT CORP., a Washington Corporation, and JOHN DOE n, 14 Defendants. 15 I. INTRODUCTION 16 This matter comes before the Court on pro se Plaintiff ATM Shafiqul Khalid’s Motion for 17 Reconsideration. Dkt. #27. On September 4, 2019, this Court granted Defendant Microsoft 18 Corporation (“Microsoft”)’s Motion to Dismiss, which dismissed Plaintiff’s claims with leave to 19 file an amended complaint. Dkt. #20. On October 2, 2019, Plaintiff filed an appeal to the Ninth 20 Circuit, which was dismissed for lack of jurisdiction on October 25, 2019. Dkt. #23. Plaintiff 21 now moves this Court to reconsider its order and requests certification for interlocutory appeal. 22 Dkt. #27. The Court has determined that response briefing from Microsoft is unnecessary. See 23 Local Rules W.D. Wash. LCR 7(h)(3). 24 1 II. BACKGROUND A full background of this case is not necessary given this Court’s previous order on 2 Plaintiff’s claims against Microsoft. Dkt. #20. This action arises out of Plaintiff’s dispute with 3 his former employer, Microsoft, regarding an employment agreement he signed when he accepted 4 a position as Senior Program Manager in Microsoft’s Bing division (“the Employee Agreement”). 5 The Employee Agreement assigned certain intellectual property rights to Microsoft for inventions 6 Plaintiff developed during his employment at Microsoft starting January 2012 until his 7 termination in February 2015. Dkt. #7 at ¶¶ 17, 21. Plaintiff claims that he provided Microsoft 8 with an invention exclusion list (the “Exclusion List”) denoting nine patentable items that should 9 have been excluded from the Employee Agreement. Id. at ¶¶ 13, 16, 18. 10 On January 28, 2019, Plaintiff filed this action against Microsoft alleging eleven claims. 11 Dkt. #1. The Court dismissed six of Plaintiff’s claims with prejudice, including: forced labor 12 under the Thirteenth Amendment (Count 4), a RICO claim for forced labor (Count 5), civil rights 13 claims under 42 U.S.C. § 1983 and § 1985 (Counts 6, 12) fraud (Count 8), and a claim for 14 declaratory relief for a Fourteenth Amendment violation (Count 10). Dkt. #20 at 22. The Court 15 granted Plaintiff leave to file an amended complaint for his Sherman Act claims (Counts 1 and 16 2), his RICO claim for extortion (Count 3), and claims for declaratory relief for violation of RCW 17 49.44.140 and inequitable conduct (Counts 9 and 11). 18 Plaintiff filed an earlier motion for reconsideration on October 28, 2019 requesting the 19 Court to reconsider its order dismissing his claims. Dkt. #24. The instant motion is nearly 20 identical to Plaintiff’s original motion but adds a request for certification for interlocutory appeal. 21 See Dkt. #27 at 2. Plaintiff clarifies that the November 18, 2019 motion, Dkt. #27, “replaces the 22 premature earlier motion” filed on October 28. Id. Because the filings are almost 23 24 1 indistinguishable, the Court will limit its consideration to the instant motion and hereby STRIKES Plaintiff’s first motion for reconsideration, Dkt. #24, as moot. 2 III. DISCUSSION 3 A. Plaintiff’s Leave to Amend 4 As an initial matter, the Court finds it necessary to clarify for Plaintiff the scope of this 5 Order. This Order only reconsiders the Court’s previous decision to dismiss certain claims as 6 they were presented in Plaintiff’s first amended complaint, Dkt. #7, and considers his request for 7 certification for interlocutory appeal. It does not examine new allegations presented for the first 8 time in Plaintiff’s Motion for Reconsideration, including Plaintiff’s “Proposed Second Amended 9 Complaint” filed as an exhibit. See Dkt. #27-1. The Court has already granted Plaintiff leave to 10 amend his complaint with respect to Counts 1–3, 9 and 11. See Dkt. #20 at 22. To the extent that 11 Plaintiff wishes to allege new facts related to those claims, he should include them in a Second 12 Amended Complaint filed as its own docket entry. 13 B. Plaintiff’s Untimely Motion for Reconsideration 14 Although Plaintiff styles the motion as one to alter or amend judgment pursuant to Fed. 15 R. Civ. P. 59(e), no judgment was entered as a result of the Court’s previous order. See Dkt. #20. 16 Accordingly, Plaintiff’s Motion is properly treated as one for reconsideration pursuant to Local 17 Rules W.D. Wash. LCR 7(h). 18 Motions for reconsideration “shall be filed within fourteen days after the order to which 19 it relates is filed.” LCR 7(h). Here, the Court issued its order granting Microsoft’s motion to 20 dismiss on September 4, 2019. Dkt. #20. The deadline to file a motion for reconsideration was 21 therefore no later than September 18, 2019. This deadline elapsed before Plaintiff filed his appeal 22 to the Ninth Circuit on October 2, 2019. Because Plaintiff did not file either of his motions for 23 24 1 reconsideration until October 28, 2019 and November 18, 2019, respectively, both motions are untimely. See Dkts. #24, #27. For this reason alone, denial of Plaintiff’s motion is appropriate. 2 Even if the Court affords pro se Plaintiff “the benefit of any doubt” and considers the 3 merits of his motion, see Alvarez v. Hill, 518 F.3d 1152, 1158 (9th Cir. 2008), this district’s local 4 rules limit motions for reconsideration to six pages. See Local Rules W.D. Wash. LCR 7(e)(1). 5 For this reason, the Court’s review is properly limited to the first six pages of Plaintiff’s Motion. 6 See Dkt. #27 at 2-7. 7 C. Legal Standard 8 “Motions for reconsideration are disfavored.” Local Rules W.D. Wash. LCR 7(h)(1). 9 “The court will ordinarily deny such motions in the absence of a showing of manifest error in the 10 prior ruling or a showing of new facts or legal authority which could not have been brought to its 11 attention earlier with reasonable diligence.” Id. Plaintiff raises several arguments here that he 12 failed to present in his opposition to Microsoft’s motion to dismiss. Compare Dkt. #17 with Dkt. 13 #27. For that reason, a substantial portion of Plaintiff’s Motion improperly argues theories of the 14 case that he could have presented earlier. See Kona Enterprises, Inc. v. Estate of Bishop, 229 15 F.3d 877, 890 (9th Cir. 2000)). (“A Rule 59(e) motion may not be used to raise arguments . . . 16 when they could reasonably have been raised earlier in the litigation.”) (emphasis in original). 17 However, even considering the merits of Plaintiff’s Motion, the Court finds denial warranted. 18 Plaintiff asks the Court to reconsider its ruling on several grounds. First, he claims that 19 he meets the class requirement under 42 U.S.C. § 1985 because “inventors” are a protected class 20 under Article I, Section 8 of the U.S. Constitution. Dkt. #27 at 2. This provision reads, in part: 21 “The Congress shall have Power . . . To promote the Progress of Science and useful Arts, by 22 securing for limited Times to Authors and Inventors the exclusive Right to their respective 23 Writings and Discoveries;” U.S. Const. art. I, § 8, cl. 8. This language authorizes Congress to 24 1 pass laws that protect the property rights of authors and inventors. It does not make inventors a protected class subject to civil rights protections. Moreover, the Court’s decision to dismiss 2 Plaintiff’s § 1985 claim was not predicated on whether inventors constituted a protected class. 3 The Court granted dismissal because Plaintiff had failed to make even the barest allegations of 4 class-based animus. See Dkt. #20 at 16. In addition to his Section 1985 claim, Plaintiff also raises 5 an argument related to his Section 1983 argument: “Patent right doesn’t require state action for 6 42 USC § 1983.” Dkt. #7 at 2. He provides no relevant case law in support of this claim, which 7 contradicts well-established precedent that Section 1983 claims against private actors require a 8 state nexus. See Tsao v. Desert Palace, Inc., 698 F.3d 1128, 1138 (9th Cir. 2012) (“§ 1983 makes 9 liable only those who act under color of state law”) (internal quotations omitted)). Accordingly, 10 the Court finds no manifest error of law in its decision to dismiss Plaintiff’s civil rights claims 11 with prejudice. 12 Next, Plaintiff argues that his forced labor claim under the Trafficking Victims Protection 13 Reauthorization Act (“TVPRA”), 18 U.S.C. § 1589 et seq., applies to both labor and labor service, 14 as well as both completed and attempted forced labor, and Plaintiff could not “walk away free 15 from his accumulated labor of 30,000 hours and future patent continuance and maintenance labor 16 without giving Microsoft a free license . . . in the face of ‘serious harm’.” Dkt. #27 at 2. The 17 TVPRA defines a victim of forced labor as someone coerced to work against his or her will 18 because of serious harm or threat of serious harm. See 18 U.S.C. 1589(a)-(b). Plaintiff’s Motion 19 claims that walking away from his patent work would be “suicidal.” Dkt. #27 at 2. However, as 20 the Court previously stated, “Plaintiff has not been coerced into continue working on his patents 21 against his will. On the contrary, he wants to continue working on his patent family because of 22 the time and money already invested but may voluntarily choose not to do so because of 23 Microsoft’s alleged scheme that contaminated his patents.” Dkt. #20 at 11 (emphasis in original). 24 1 For these reasons, regardless of whether Plaintiff characterizes Microsoft’s actions as coercion or attempted coercion, the Court finds no manifest error of law in its previous decision to dismiss 2 Plaintiff’s forced labor claim with prejudice. 3 Third, Plaintiff argues that the Court erred in finding his fraud claim barred by the statute 4 of limitations. Dkt. #27 at 2. Plaintiff cites RCW 4.16.080(4), which states that the cause of 5 action in a fraud case is “not to be deemed to have accrued until the discovery by the aggrieved 6 party of the facts constituting the fraud . . . .” RCW 4.16.080(4). Plaintiff raises the same 7 argument considered and rejected by the Court in its previous order that the May 27, 2016 M&G 8 letter was the first time that Plaintiff was made aware of Microsoft’s fraud. Dkt. #20 at 18 (citing 9 Dkt. #7 at ¶ 49). The Court found that even if it liberally applied the discovery rule to Plaintiff’s 10 case, his fraud claim is untimely. His complaint makes clear that by July 9, 2015 at the latest, he 11 was aware of Microsoft’s intention to deny existence of the Exclusion List. Dkt. #20 at 18 (citing 12 Dkt. #7 at ¶ 46). Plaintiff’s fraud claim, see Dkt. #7 at ¶¶ 134-151, therefore began tolling no 13 later than July 9, 2015. Because Plaintiff did not file this action until January 28, 2019, the three- 14 year limitations period had already expired. Accordingly, the Court finds no manifest error in its 15 decision that Plaintiff’s fraud claim is time-barred. 16 Fourth, Plaintiff argues that the Employee Agreement “illegally combines Employee’s 17 private asset with the corporation’s asset” which “is illegal under RCW 49.44.140 [and] is subject 18 to anti-trust scrutiny.” Dkt. #27 at 3. Plaintiff also argues that the “[i]ntra-corporation conspiracy 19 doctrine does not extend to parties in competition because that is opposite to unity rule under the 20 doctrine.” Id. He also claims that the doctrine does not apply to terminated employees and “can’t 21 detach patent right from Khalid that had been secured by US constitution Section 8, Clause 8 as 22 absolute freedom.” Id. 23 24 1 The Court is unclear which claim Plaintiff’s argument refers to, given that he brought two anti-trust claims under Sections 1 and 2 of the Sherman Antitrust Act. See Dkt. #20 at 7-10. 2 However, this argument appears to address his claim under Section 1, which the Court dismissed 3 without prejudice for failure to allege a contract or conspiracy among multiple entities. See id. at 4 7-8. The Court found that because Section 1 of the Sherman Act does not reach wholly unilateral 5 conduct by a single entity, the Employee Agreement between Plaintiff and Microsoft cannot 6 comprise a “conspiracy” or “contract” between multiple entities. Plaintiff’s Motion provides no 7 basis for reconsidering this analysis of his first amended complaint. However, because this Court 8 dismissed his anti-trust claims without prejudice, Plaintiff may still file a second amended 9 complaint to address these deficiencies. 10 Fifth, Plaintiff challenges the Court’s finding that two of his claims for declaratory relief 11 are unripe. Plaintiff seeks a declaratory judgment that the “right of first refusal” clause of Section 12 5 of the Employee Agreement violates RCW 49.44.140(1) and is generally inequitable. The Court 13 previously found that both claims were unripe since Plaintiff’s claims do not implicate the “right 14 of first refusal” clause under Section 5. Rather, as stated in his first amended complaint, 15 Plaintiff’s claims against Microsoft arise from whether he submitted an Exclusion List under 16 Section 6 of the Employee Agreement. See Dkt. #20 at 20-21. Plaintiff argues that the Court 17 erred in dismissing his claims because Microsoft never paid for the rights to his patents, interfered 18 with his rights as an inventor under Article 1, Section 8, Clause 8 of the U.S. Constitution, and 19 created “material risk of harm” pursuant to In Re Horizon Healthcare Services Inc. Data Breach, 20 846 F. 3d 625 (3rd Cir. 2017). Dkt. #27 at 3. 21 As stated above, Article 1, Section 8 of the Constitution sets forth Congress’ authority to 22 pass laws protecting creative property and is inapplicable here. Horizon Healthcare is likewise 23 inapposite since it addressed whether U.S. Supreme Court case Spokeo changed the standard for 24 1 injury-in-fact when analyzing standing. See id. at 637 (citing Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 194 L. Ed. 2d 635 (2016)). Here, the Court dismissed Plaintiff’s claims for declaratory 2 relief for lack of actual case or controversy since his claims arose from Section 6 of the Employee 3 Agreement—not the “right of first refusal” clause under Section 5. See Dkt. #20 at 20-21. Finally, 4 Plaintiff’s argument in the instant motion that “Microsoft never paid for the rights to his patents” 5 appears unrelated to the “right of first refusal” clause and likewise does not change the Court’s 6 analysis of his first amended complaint. However, to the extent that Plaintiff wishes to assert new 7 facts or allegations related to his “right of first refusal” claims, he may do so in his second 8 amended complaint. See Dkt. #20 at 23 (dismissing Counts 9 and 11 without prejudice). 9 D. Request for Interlocutory Appeal 10 Plaintiff also requests that the Court certify the issues raised in the instant motion for 11 interlocutory appeal. Dkt. #27 at 2. As a general rule, an appellate court should not review a 12 district court ruling until after the entry of final judgment. See 28 U.S.C. §1291. Accordingly, a 13 party seeking review of a nonfinal order must first obtain consent of the trial judge. Coopers & 14 Lybrand v. Livesay, 437 U.S. 463, 474 (1978). The requirements for certification are that the case 15 present a “controlling question of law” as to which there is “substantial ground for difference of 16 opinion,” and that an immediate appeal from the Order may “materially advance the ultimate 17 termination of the litigation.” 28 U.S.C. § 1292(b). The party seeking certification bears the 18 burden of showing that “exceptional circumstances justify a departure from the basic policy of 19 postponing appellate review until after the entry of a final judgment.” Coopers, 437 U.S. at 475, 20 (1978) (quoting Fisons, Ltd. v. United States, 458 F.2d 1241, 1248 (7th Cir. 1972)). 21 Applying the three-factor test, the Court finds no exceptional circumstances warranting 22 certification. For those claims dismissed without prejudice, including anti-trust claims and 23 requests for declaratory judgment, Plaintiff was granted leave to amend. Accordingly, there is no 24 1 controlling issue of law as to those claims that would affect the outcome of this litigation in this Court, nor would the appeal help to speed the ultimate resolution of the case. For those claims 2 dismissed with prejudice, the issues Plaintiff would assert on appeal are: (a) whether “inventors” 3 comprise a protected class for claims under 42 U.S.C. § 1985; (b) whether Microsoft’s alleged 4 patent-grabbing scheme may constitute “forced labor” under the TVPRA; and (c) whether 5 Plaintiff’s fraud claim is time-barred where he discovered the alleged fraud more than three years 6 before filing the complaint. 7 First, Plaintiff’s § 1985 claim was dismissed with prejudice because Plaintiff failed to 8 make even the barest allegations of class-based animus. See Dkt. #20 at 16. For that reason, the 9 issue of whether “inventors” comprise a protected class is not a controlling issue of law. As to 10 the remaining two claims, the Court finds no substantial grounds for difference of opinion. 11 Plaintiff has failed to cite any relevant, analogous, or controlling cases showing any difference of 12 opinion on either the scope of the TVPRA or the three-year time bar for fraud cases in Washington 13 state. On the contrary, both issues are borderline frivolous given the plain language of the 14 TVPRA, which was passed to reach cases of modern-day human trafficking, and the time-bar 15 under RCW 4.16.080(4), which starts the clock once the fraud is discovered. Lastly, certifying 16 any of these issues would not materially advance termination of the litigation. The Court’s 17 previous order identified Plaintiff’s actionable claims and granted Plaintiff the opportunity to 18 amend those claims in a revised complaint. Accordingly, granting certification at this stage would 19 only further delay resolution of this matter. 20 E. Plaintiff’s Motion to Extend Time 21 Plaintiff has also filed a motion to extend his time to file a second amended complaint. 22 Dkt. #25. This Court previously ordered Plaintiff to file an amended complaint within thirty days 23 of its order granting Microsoft’s motion to dismiss. Dkt. #20 at 23. Plaintiff incorrectly assumes 24 1 that filing his Ninth Circuit appeal automatically stayed this case from October 2 to November 18, 2019. Dkt. #27 at 5. However, the Federal Rules of Appellate Procedure require that a party 2 seeking to stay a district court’s order pending an appeal file a motion in the district court to obtain 3 that relief. See Fed. R. App. P. 8(a)(1). Plaintiff never filed a motion with this Court to request 4 a stay. Accordingly, he was required to file his amended complaint by October 4, 2019. The 5 Court notes, however, that Plaintiff attached a “proposed draft complaint” as an exhibit to each 6 of his Motions for Reconsideration. See Dkts. #24-1; #27-1. 7 In the interest of affording a pro se plaintiff “the benefit of any doubt,” Alvarez, 518 F.3d 8 at 1158, the Court will provide Plaintiff with an additional seven (7) days from the date of this 9 Order to file a Second Amended Complaint. Plaintiff is directed to file his Second Amended 10 Complaint as its own docket entry—not as an exhibit or attachment to any other document. 11 Plaintiff’s Motion to Extend Time to file his second amended complaint, Dkt. #25, is therefore 12 GRANTED IN PART. 13 IV. CONCLUSION 14 Having reviewed Plaintiff’s Motion and the remainder of the record, it is hereby 15 ORDERED: 16 (1) Plaintiff’s Motion for Reconsideration, Dkt. #24, is STRICKEN as moot. 17 (2) Plaintiff’s Second Motion for Reconsideration, Dkt. #27, is DENIED. 18 (3) Plaintiff’s request for certification for interlocutory appeal, Dkt. #27, is DENIED. 19 (4) Plaintiff’s Motion to Extend Time, Dkt. #25, is GRANTED IN PART. Plaintiff is 20 ORDERED to file a Second Amended Complaint within seven (7) days of this Order regarding 21 Counts 1–3, 9 and 11 only. 22 // 23 // 24 1 DATED this 21st day of November 2019. 2 3 A 4 RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE 5

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24