Qimonda AG v. LSI Corp.

857 F. Supp. 2d 570, 2012 WL 777494, 2012 U.S. Dist. LEXIS 30559
CourtDistrict Court, E.D. Virginia
DecidedMarch 7, 2012
DocketCivil Action No. 3:08-CV-735
StatusPublished
Cited by1 cases

This text of 857 F. Supp. 2d 570 (Qimonda AG v. LSI Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Qimonda AG v. LSI Corp., 857 F. Supp. 2d 570, 2012 WL 777494, 2012 U.S. Dist. LEXIS 30559 (E.D. Va. 2012).

Opinion

MEMORANDUM OPINION

JAMES R. SPENCER, District Judge.

THIS MATTER is before the Court on LSI Corporation’s (“LSI”) Motion to Dismiss Under Rule 12(b)(1) for Lack of Standing. (Doc. No. 26.) For the reasons stated below, the Court GRANTS the Motion.

I. BACKGROUND

The following facts are undisputed. Qimonda AG (“Qimonda”), a German corporation based in Munich, filed this patent infringement suit against LSI on November 12, 2008. The Complaint alleged infringement of seven United States patents assigned to Qimonda.1 Soon after this suit was filed, Qimonda filed a similar United States International Trade Commission (“ITC”) administrative action against LSI. Pursuant to 19 U.S.C. § 1629(a), this suit was stayed pending the final determination of the ITC. On November 1, 2011, upon confirmation from the parties that the ITC determination had become final, the Court lifted the stay in this matter. (See Doc. No. 23.)

While this action was stayed, and during the ITC’s patent infringement investigation under 19 U.S.C. § 1337, Qimonda entered into insolvency proceedings in Germany by filing an application with the Amtsgericht-Insolvenzgericht München (“Munich Insolvency Court”). Under the German Insolvency Code, insolvency proceedings are opened by an “Insolvency Order,” which among other things appoints an insolvency administrator to take possession of and administer the debtor’s estate. (See Schlegel Decl. ¶¶ 9-10.) In opening Qimonda’s insolvency action in Germany, the Munich Insolvency Court entered an order on April 1, 2009 which appointed Dr. Michael Jaffé (“Jaffé”) as Qimonda’s insolvency administrator.2

On June 15, 2009, Jaffé filed a petition for recognition of a foreign proceeding under Chapter 15 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Eastern District of Virginia.3 Enacted by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Chapter 15 is purposed “to provide effective mechanisms for dealing with cases of cross-border insolvency.” 11 U.S.C. § 1501(a). Chapter 15 replaced the former Section 304 of the Bankruptcy Code, and incorporated the Model Law on Cross-Border Insolvency drafted by the United Nations Commission on International Trade Law. Lavie v. Ran (In re Ran), 607 F.3d 1017, 1020 (5th Cir.2010). “The statutory intent to conform American law with international law is explicit in the text of Section 1501(a), and also is expressed in Section 1508, which states that’[i]n interpreting this chapter, the [573]*573court shall consider its international origin, and the need to promote an application of this chapter that is consistent with the application of similar statutes adopted by foreign jurisdictions.’ ” Id. at 1020-21 (quoting 11 U.S.C. § 1508).

Jaffé’s petition to the Bankruptcy Court asked the United States to recognize the German insolvency proceeding as a foreign “main” proceeding, i.e., to recognize the German proceeding as the one “pending in the country where the debtor has the center of its main interests.” 11 U.S.C. § 1517(b)(1). Upon recognition, the foreign representative may take advantage of a broad range of relief. Ran, 607 F.3d at 1021. Pertinent to this Motion, upon recognition the Bankruptcy Court may formally “entrust[ ] the administration or realization of all or part of the debtor’s assets within the territorial jurisdiction of the United States to the [debt- or’s] foreign representative.” 11 U.S.C. § 1521(a)(5).

On July 22, 2009, the Bankruptcy Court entered an order recognizing the German insolvency proceeding as a foreign “main” proceeding under Chapter 15.4 Later the same day, the Bankruptcy Court entered a supplemental order declaring Jaffé “the sole and exclusive representative of Qimonda AG in the United States,” and stating that Jaffé “shall administer the assets of Qimonda AG within the territorial jurisdiction of the United States.”5

In that capacity, Jaffé has determined that Qimonda should be liquidated, and that Qimonda’s most valuable assets — its patents — should be monetized through licensing, sales, and infringement litigation. As the manager and sole representative of Qimonda, Jaffé approves of this litigation.

LSI’s Motion to Dismiss for Lack of Standing centers on Jaffé’s status as Qimonda’s insolvency administrator. LSI’s argument that Qimonda now lacks standing to bring this patent infringement suit has two threads: (1) Qimonda’s insolvency estate includes the causes of action for patent infringement asserted in this case; and (2) Jaffé, vested with plenary ownership and control over Qimonda’s insolvency estate, is the only party able to pursue them. Qimonda, asserts LSI, is divested of ownership and control, and now lacks standing to assert the infringement claims alleged in this lawsuit.

II. LEGAL STANDARD

The burden of proving subject matter jurisdiction in response to a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) is on the plaintiff. Williams v. United States, 50 F.3d 299, 304 (4th Cir.1995). This is because “[i]t is to be presumed that a cause lies outside th[e] limited jurisdiction” of the federal courts. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994).

Defendants can challenge subject matter jurisdiction by two different methods. By the first method, a defendant may assert “that a complaint simply fails' to allege facts upon which subject matter jurisdiction can be based.” Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982). In such a “facial” challenge to subject matter jurisdiction, the court treats the jurisdictional challenge just as it would a motion to dismiss under Rule 12(b)(6) — it assumes that the facts in the complaint are true and determines whether they are sufficient to [574]*574confer jurisdiction. Kerns v. United States, 585 F.3d 187, 192 (4th Cir.2009).

In contrast, when considering a “factual” or “substantive” challenge to subject matter jurisdiction under Rule 12(b)(1), courts apply the standard associated with motions for summary judgment. See id. at 192-93; see also Richmond, Fredericksburg & Potomac R.R. v. United States, 945 F.2d 765, 768 (4th Cir.1991). The summary judgment standard applies in these challenges because the defendant’s claim is that the “jurisdictional allegations of the complaint [are] not true.” Adams, 697 F.2d at 1219.

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857 F. Supp. 2d 570, 2012 WL 777494, 2012 U.S. Dist. LEXIS 30559, Counsel Stack Legal Research, https://law.counselstack.com/opinion/qimonda-ag-v-lsi-corp-vaed-2012.