Waste Distillation Technology, Inc. v. Pan American Resources, Inc.

775 F. Supp. 759, 22 U.S.P.Q. 2d (BNA) 1519, 1991 U.S. Dist. LEXIS 15406, 1991 WL 217769
CourtDistrict Court, D. Delaware
DecidedOctober 10, 1991
DocketCiv. A. 91-027-JLL, 91-302-JLL
StatusPublished
Cited by48 cases

This text of 775 F. Supp. 759 (Waste Distillation Technology, Inc. v. Pan American Resources, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Waste Distillation Technology, Inc. v. Pan American Resources, Inc., 775 F. Supp. 759, 22 U.S.P.Q. 2d (BNA) 1519, 1991 U.S. Dist. LEXIS 15406, 1991 WL 217769 (D. Del. 1991).

Opinion

MEMORANDUM OPINION

LATCHUM, Senior District Judge.

On January 16,1991, Plaintiff Waste Distillation Technology, Inc. (“WDT”) filed C.A. No. 91-027-JLL (#27) against Pan American Resources, Inc. (“PAR”) alleging unfair competition 1 , conspiracy to defraud, misappropriation of trade secrets and copyrights, and copyright infringement. (# 27 Docket Item [“D.I.”] 1.) Approximately four months later, WDT filed a nearly identical action against John Toman, a consultant to WDT and the president and chief executive officer of PAR. (91-302-JLL [#302] D.I. 1.) Defendants moved to transfer the suits to the United States District Court for the Central District of California. Defendant Toman also moved to consolidate the two actions.

For the reasons set forth below, the Court has determined that consolidation of the two actions is appropriate to conserve judicial resources. However, the defendants have not persuaded this Court that a transfer should be granted.

I. Relevant Background Facts From The Filed Documents

WDT, a Delaware Corporation with its principal place of business in Irvington, New York, has been actively engaged in the research, design, manufacture and sale of a unique proprietary, destructive distillation system for converting garbage into energy. (# 27 D.I. 1 II1, D.I. 18; # 302 D.I. 1 111, 11.) It has developed trade and business secrets and, except for necessary disclosures, WDT contends that it kept these secrets under close control at all times. (# 27 D.I. 1 11 7; # 302 D.I. 1 117.)

PAR is a “non-operating” Delaware Corporation. (# 27 D.I. 16, 39; # 302 D.I. 3, 14.) It is engaged in the design, development, manufacture, sale and licensing of technology for the disposal of, and conversion to energy of, municipal solid waste. (# 27 D.I. 17; # 302 D.I. 6.) Although it has few corporate assets, PAR owns a patent, assigned to it by inventors William M. Fio Rito and Ralph E. Kidd, covering a waste converter system called the “Lantz Converter.” PAR granted an exclusive, nearly worldwide license to WDT to market the Lantz Converter on August 20, 1980. (# 27 D.I. 1 119, 17; # 302 D.I. 1 119, 6.) The license permitted WDT to manufacture, sell, lease, operate, sublease or sublicense the equipment and processes disclosed in PAR’s patents. PAR renewed the license on May 24, 1984 but terminated the agreement in September of 1987, citing WDT’s failure to make royalty payments to PAR. (# 27 D.I. 17; # 302 D.I. 6.)

Defendant Toman, a citizen and resident of California, is the acting President of PAR. (#27 D.I. 17; #302 D.I. 6.) He became a consultant for WDT after requesting employment from Mr. William A. Fio Rito, WDT’s President and Chief Executive Officer 2 and a West Point classmate. (# 27 D.I. 1 1110, 39; # 302 D.I. 1 1110, 14.) Plaintiff asserts that, in his position as a consultant, Mr. Toman had free access to Plaintiff's business, clients, facilities, confidential files, proprietary data, and confidential engineering drawings. (# 27 D.I. 1 1111; # 302 D.I. 1 1111.) Plaintiff alleges that, while acting as a consultant for WDT, Mr. Toman acquired a controlling management position with PAR without WDT’s *761 knowledge. (# 27 D.I. 1 1110; # 302 D.I. 1 mo.)

The plaintiff filed suit in the District of Delaware against PAR on January 16,1991 and against John Toman on May 22, 1991. Allegedly, Mr. Toman conspired with PAR to utilize his dual position to misappropriate WDT’s competitive advantage and to fraudulently acquire trade secrets and proprietary information from WDT. 3 (#27 D.I. 1 II16; # 302 D.I. 1 ¶ 16.) The acts allegedly took place in a variety of locations, including New York, Maryland, the District of Columbia, Virginia, Ohio, Missouri, Kansas, Texas, Hawaii, California, The Netherlands, and Ontario, Canada. (# 27 D.I. 18, 39; # 302 D.I. 11, 14.) Plaintiff maintains that this continuing use unfairly deprived Plaintiff of a commercial advantage, and unfairly competed with Plaintiff in exploitation of the technology.

II. Consolidation Of Actions

Rule 42(a) of the Federal Rules of Civil Procedure gives this Court broad powers to consolidate actions involving common questions of law or fact if, in its discretion, such consolidation would facilitate the administration of justice. Ellerman Lines, Ltd. v. Atlantic & Gulf Stevedores, Inc., 339 F.2d 673, 675 (3d Cir.1964), cert. denied, 382 U.S. 812 (1965). The mere existence of common issues, a prerequisite to consolidation, does not require consolidation. Rohm & Haas Co. v. Mobil Oil Corp., 525 F.Supp. 1298, 1309 (D.Del. 1981). The savings of time and effort gained through consolidation must be balanced against the inconvenience, delay or expense that might result from simultaneous disposition of the separate actions. Id. The proper administration of justice requires that issues be resolved without unnecessary cost or delay.

This Court holds that the administration of justice in the two pending cases would be best served by consolidation. Both suits involve the same plaintiff, an identical factual setting, the same witnesses, documents, and exhibits. The two actions also assert identical legal issues. The only appreciable difference between the two complaints is an additional claim for relief against PAR where the plaintiff seeks to have PAR adjudged trustee of all the confidential information that Toman allegedly conveyed from WDT to PAR. (#27 D.I. 1, 19 Ex. A; #302 D.I. 1, 8.)

Consolidation will encourage orderly pretrial discovery, save witness time and expense, avoid duplicitous filings, and eliminate the risk of inconsistent results between two proceedings. Not only will resolution of separate actions waste time, energy and money but nothing has been presented to indicate that any inconvenience, delay or expense will result from simultaneous disposition. Therefore, this Court holds that consolidation of the two pending suits is appropriate.

III. Transfer Of Suit To The Central District of California

In its discretion, this Court may transfer a civil action to any other district where it might have been brought. 28 U.S.C. § 1404(a) (1976); Hoffman v. Blaski, 363 U.S. 335, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960) (must have right to bring action independent of Defendant’s wishes or waiver). The analysis concerning the district where the suit “might have been brought” is limited to the existing facts and circumstances at time of filing the lawsuit. Hoffman v. Blaski, 363 U.S. at 342-343, 80 S.Ct. at 1088-89 (determination not made at time of transfer); Shutte v. Armco Steel Corp., 431 F.2d 22, 24 (3d Cir.1970), cert. denied, 401 U.S. 910, 91 S.Ct.

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775 F. Supp. 759, 22 U.S.P.Q. 2d (BNA) 1519, 1991 U.S. Dist. LEXIS 15406, 1991 WL 217769, Counsel Stack Legal Research, https://law.counselstack.com/opinion/waste-distillation-technology-inc-v-pan-american-resources-inc-ded-1991.