Tracfone Wireless, Inc. v. US/Intelicom, Inc.

202 F.R.D. 321, 2001 U.S. Dist. LEXIS 11692, 2001 WL 909025
CourtDistrict Court, S.D. Florida
DecidedAugust 7, 2001
DocketNo. 99-2529-CIV
StatusPublished

This text of 202 F.R.D. 321 (Tracfone Wireless, Inc. v. US/Intelicom, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tracfone Wireless, Inc. v. US/Intelicom, Inc., 202 F.R.D. 321, 2001 U.S. Dist. LEXIS 11692, 2001 WL 909025 (S.D. Fla. 2001).

Opinion

ORDER DENYING DEFENDANTS’ MOTION TO ADD AN INDISPENSABLE PARTY AND GRANTING DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO ADD AN INDISPENSABLE PARTY

KING, District Judge.

THIS CAUSE comes before this Court upon Defendants’ Motion to Add an Indispensable Party or in the Alternative, Defendants’ Motion to Dismiss for Failure to Add an Indispensable Party filed April 24, 2001. Plaintiff filed a Response to Defendants’ Motion to Add an Indispensable Party or in the Alternative, to Dismiss for Failure to Add an Indispensable Party on May 15, 2001. Defendants have failed to file a Reply and the time to do so has passed.

I. Background

Plaintiff Tracfone Wireless, Inc. (“TracFone”) f/k/a Topp Telecom, Inc. originally filed this action against Defendants US/Intelicom, Inc. and PrePaid Solutions, Inc. on September 21, 1999 for alleged violations of a patent. The parties have filed numerous amended complaints and amended counterclaims. Now, more than a year and half after the case was commenced, Defendants have moved for this Court to add an indispensable party or to dismiss the instant action for failure to join an indispensable party. Defendants claim that they did not learn about Giacomo A. Ciocca’s (“Ciocca”) a/k/a Jack Ciocca interest in the patent at controversy in this case until December 2000 during discovery, which was after their responsive pleadings were filed. Although Defendants concede that they failed to assert Plaintiffs failure to join indispensable party as a defense in their responsive pleadings, they claim that a court has authority to raise the issue sua sponte. Under Federal Rule of Civil Procedure 19, a Court may raise the issue of an absent nonparty’s indispensability at any stage of a proceeding. See City of Marietta v. CSX Transportation, Inc., 196 F.3d 1300, 1302 (11th Cir.1999); Haby v. Stanolind Oil & Gas Co., 225 F.2d 723, 724 (5th Cir.1955).

Plaintiff executed on June 29, 1999 an Assignment of and Grant of Security Interest in [323]*323Patents Agreement (“Assignment Agreement”) with a Mr. Ciocca. Mr. Ciocca is currently incarcerated at the Allenwood Federal Prison Camp in Montgomery, Pennsylvania. The Assignment Agreement assigned and transferred all of Mr. Ciocca’s rights, title and interest in the United States Patent No. 5,631,947, entitled “Mobile Telephone Device for Storing a Plurality of Changable [sic] Charge Rates and Time Limit Data” along with his Canadian and European applications (collectively the “947 patent”) to Plaintiff. The Assignment Agreement also gave Mr. Ciocca a security interest in the ’947 patent as security for its payment of the purchase price. According to Plaintiff, all payments to date have been made to Mr. Ciocca. Defendants assert that Mr. Ciocca sent a letter dated May 12, 2000 to Plaintiff allegedly voiding and rescinding his prior assignment of the ’947 patent to Plaintiff. (See Defs.’ Mot. Attach., Ex. C., Rescission Letter).

Defendants argue that Mr. Ciocca’s alleged rescission of Plaintiffs assignment of the ’947 patent in the letter and Mr. Ciocca’s security interest in the ’947 patent makes him a party in interest to this case. Defendants contend that they may be subject to multiple lawsuits on the infringement of the ’947 patent since Mr. Ciocca might be the rightful owner of the ’947 patent or has a substantial security interest in the ’947 patent.

II. Discussion

Federal Rule of Civil Procedure 19 provides courts with “a two-part test for determining whether an action should proceed in a nonparty’s absence.” City of Marietta v. CSX Tramp., Inc., 196 F.3d 1300, 1305 (11th Cir.1999). The first-step is for a court to decide whether if the absent nonparty is necessary. A party is necessary if “complete relief cannot be accorded among those already parties” or the absent nonparty claims an interest relating to the action and the absent nonparty absence would (i) impair its ability to protect that interest or (ii) leave any party to the action subject to inconsistent obligations. Fed.R.Civ.P. 19(a)(1)-(2). Once a court concludes that an absent non-party is necessary, it must then determine whether the nonparty can be joined. If a court finds that a necessary party cannot be joined for jurisdictional reasons, then it must proceeds to the second-step under Rule 19 to determine whether “in equity and good conscience the action should proceed among the parties before it, or should be dismissed.” Fed.R.Civ.P. 19(b). Rule 19(b) provides four factors to be considered by a court. When conducting an analysis under Rule 19(b), a court must balance “(1) how prejudicial a judgment would be to the nonjoined and joined parties, (2) whether the prejudice could be lessened depending on the relief fashioned, (3) whether the judgment without joinder would be adequate, and (4) whether the plaintiff would have any alternative remedies were the case dismissed for nonjoinder.” See Laker Airways, Inc. v. British Airways, PLC, 182 F.3d 843, 848 (11th Cir. 1999).

This first issue is whether Mr. Ciocca is a necessary party under the circumstances of the instant case. Defendants argue that Mr. Ciocca’s rescission and his security interest in the ’947 patent makes him a necessary party to this action and therefore he should be joined. They contend that the failure to join Mr. Ciocca would subject them to multiple lawsuits in the event he was later determined to be the rightful owner of the ’947 patent. Further, Defendants argue that Mr. Ciocca has a valid security in the ’947 patent, which gives him a substantial interest in the ’947 patent. In response, Plaintiff asserts that Mr. Ciocca has not demonstrated that he is the rightful owner of the ’947 patent. Plaintiff contends that Mr. Ciocca’s Letter of Rescission does not void or rescind their assignment of the ’947 patent. Plaintiff cites Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., to support its contention that Mr. Ciocca’s does not have any substantial rights in the ’947 patent which warrants him being a necessary party. 944 F.2d 870 (Fed.Cir.1991). In Vaupel, the issue before the court was whether the plaintiffs were assignees of the patent and had the right to sue without joining the assignor of the patent. Id. at 873. The court found that the agreements between the parties constituted a transfer of all substantial rights under the patent thus permitting the plaintiffs [324]*324to sue. In the instant case, the issue is not whether Plaintiff is an assignee of the ’947 or whether that assignment grants it the right to sue under the ’947 patent but whether Mr.

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202 F.R.D. 321, 2001 U.S. Dist. LEXIS 11692, 2001 WL 909025, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tracfone-wireless-inc-v-usintelicom-inc-flsd-2001.