Morisky v. MMAS Research LLC

District Court, W.D. Washington·Decided September 14, 2022·No. 2:21-cv-01301·Unknown

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA CASE NO. 2:21-CV-1301-RSM-DWC Plaintiff, ORDER RE DEFENDANT’S MOTION v. TO AMEND ANSWER, AFFIRIMATIVE DEFENSES, AND MMAS RESEARCH LLC, et al., COUNTERCLAIMS Defendant. The District Court has referred this 42 U.S.C. § 1983 civil rights action to United States Magistrate Judge David W. Christel pursuant to 28 U.S.C. § 636(b)(1)(A) and (B), and local Magistrate Judge Rules MJR1, MJR3 and MJR4. Before the Court is Defendant’s Motion to Amend Amended Answer, Amended Affirmative Defenses, and Amended Counterclaims. Dkt. 68. BACKGROUND Since the parties are familiar with the facts of this of this case the Court will not restate them here. The operative Second Amended Complaint was filed by Plaintiff on November 19, 2021. Dkt. 22, 37. On May 23, 2022, Defendants filed their Answer to Plaintiff’s Second Amended Complaint, along with Counterclaims for (1) a Declaratory Judgment that Plaintiff’s copyrights

are invalid; (2) a Declaratory Judgment that Defendants are the proper owner of the Morisky Widget copyright; (3) a Declaratory Judgment that Defendants are entitled to two years of uninterrupted and unopposed performance of the settlement agreement between the parties; (4) Breach of Contract for interfering with Defendants’ ability to execute his rights and responsibilities under the settlement agreement; (5) Tortious Interference with the Business Expectancies Plaintiff consented to as memorialized in Exhibit 3 of the settlement agreement; (6) Tortious and Malicious Abuse of Process by initiating litigation for the illegitimate purpose of placing doubt on the ability of Defendants to extend valid licenses to the Morisky Widget; and, (7) Copyright Infringement by republishing translations of the Copyrighted Morisky Widget translations using the legend, “© 2006 Donald E. Morisky.” Dkt. 52. Plaintiff did not reply.

After a series of motions to dismiss this case (Dkt. 20, 29, 47, 49), and following a change in defense counsel (Dkt. 62), on June 12, 2022 Defendants filed an Amended Answer to Plaintiff’s Second Amended Complaint, Amended Affirmative Defenses, and Amended Counterclaims (Dkt. 64). In addition to adding facts to bolster the above counterclaims, the Amended Answer added two additional Counterclaims: (1) Unfair Business Practices Under RCW 19.86.020 alleging Plaintiff copied the Morisky Widget software, named it the “MMAS Research Widget Code” and created relationships with businesses that were to be serviced and licensed through the Morisky Widget pursuant to the terms of the settlement agreement and told the businesses Defendants were not authorized to sell licenses to the Morisky Widget; and, (2)

Breach of the Implied Covenant of Good Faith and Fair Dealing by affirmatively interfering with Defendants’ ability to seek a settlement of the outstanding claims listed in Exhibit 3 to the settlement agreement, and by copying, without authorization, the software contained in the Morisky Widget and creating a copycat widget to compete with it. Dkt. 64 at 32-34. Again,

Plaintiff did not reply. On July 28, 2022, Defendant filed the instant Motion to file a Second Amended Answer to Defendant’s Second Amended Complaint, Amended Affirmative Defenses, and Amended Counterclaims. Dkt. 68. Defendants seek to add Plaintiff’s attorney, F. Christopher Austin (Attorney Austin) “as an additional Counterclaim Defendant”, and to add new facts allegedly arising out of events that happened after the date of their “Amended Counterclaim” related to the Counterclaims of Tortious Interference with Business Expectancy, Tortious and Malicious Abuse of Process, and Unfair Business Practices. Dkt. 68 at 5; Dkt. 68-1 at 33-37. On August 15, 2022 Plaintiff responded in opposition to Defendants’ motion to amend (Dkt. 79) and on August 19, 2022 Plaintiff filed a reply. Dkt. 82.

Pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure:

… a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires. “Rule 15(a) is very liberal and leave to amend ‘shall be freely given when justice so requires.’” AmerisourceBergen Corp. v. Dialysis West, Inc., 445 F.3d 1132, 1136 (9th Cir. 2006). “In determining whether leave to amend is appropriate, the district court considers ‘the presence of any of four factors: bad faith, undue delay, prejudice to the opposing party, and/or futility.’” Owens v. Kaiser Foundation Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) (quoting Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999)). Pursuant to Rule 15, Defendants seek to add Plaintiff’s attorney, F. Christopher Austin (Attorney Austin) “as an additional Counterclaim Defendant”, and to include new facts arising out of events that allegedly occurred after their operative pleading was filed. Dkt. 68 at 5; Dkt.

68-1 at 33-37. Plaintiff objects to the proposed amendment in its entirety, arguing the motion is made in bad faith and is futile. Dkt. 79 at 2. According to Plaintiff, after this Court denied Plaintiff’s motion for a preliminary injunction in April 2022, Defendants “commenced a wide-ranging campaign to contact numerous colleagues and licensees of [Plaintiff’s] Copyrighted Scales to misrepresent and misuse the Court’s denial of Plaintiff’s preliminary injunction as a dispositive finding in favor of MMAS.” Dkt. 79 at 4. In response, Plaintiff claims he instructed his counsel to prepare a letter regarding “the status of the instant case and Plaintiff’s claims as set forth in the public pleadings and filings herein.” Dkt 79 at 5. Plaintiff insists Defendants’ proposed amendments would be futile because this Court

does not have personal jurisdiction over Attorney Austin, and even if it did, Attorney Austin is shielded from personal liability for statements he makes in furtherance of his client’s interest, and “Defendants’ claims arising out of the April [2022] Letter are also barred by absolute litigation privilege, response privilege, and the Noerr-Pennington doctrine.” Dkt. 79 at 6. I. This Court does not have personal jurisdiction over Attorney Austin. Turning first to the question of whether this Court may exercise personal jurisdiction over Attorney Austin, Defendants did not address personal jurisdiction in their motion (Dkt. 68), but in their reply Defendants assert that this Court has general jurisdiction over Attorney Austin (Dkt. 82 at 4) because he has been admitted pro hac vice in this case and a previous case in the

state, which means he has “agreed to be bound by the disciplinary rules for Washington courts and submitted to the governing ethical bar in Washington”. Dkt. 82 at 4. According to Defendants, the interests of judicial economy and convenience favor permitting them to add Attorney Austin as a party to this case rather than file a separate action

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