Judicial Panel on Multidistrict Litigation.
*514 Before ALFRED P. MURRAH, Chairman, and JOHN MINOR WISDOM, EDWARD WEINFELD, EDWIN A. ROBSON, WILLIAM H. BECKER, and STANLEY A. WEIGEL, Judges of the Panel.
JOSEPH S. LORD, III, Judge of the Panel.
This litigation involves the Butterfield Patent No. 2,544,246. There are presently pending 32 actions seeking damages for infringement in 18 different districts and plaintiff has moved under Title 28 U.S.C. Section 1407 for transfer and consolidation of pretrial proceedings. There seems to be little doubt that several questions of fact are common to all the lawsuits. The issues of the scope of the patent, and its validity, including questions of obviousness, invention, prior art and commercial success are undoubtedly common to all cases. Additionally, it appears that since plaintiff waited for eight years and over a year after the expiration of the patent to bring suit, the question of laches will be a common question. Finally, questions relating to notice of infringement as required by Title 35 U.S.C. Section 287 will be common. We have concluded that these are "actions involving one or more common questions of fact" within the requirement of Section 1407.
Those defendants resisting transfer[1] do so on one or more of several grounds. All argue that the question of infringement will be peculiar to each defendant and it seems likely that this is so. If it is, the transferee judge can of course separate this issue from the consolidated pretrial proceedings and leave it for local handling. Some argument is made that it would be inconvenient for defendants to travel to a forum other than their own to submit to depositions by plaintiff. This argument, however, has no real force, since if serious inconvenience becomes apparent, the transferee judge has it within his power to order the taking of depositions of defendants' personnel in their own locality.
The most serious argument made by many defendants is that they are small businesses, their volume is small and the recoverable damages so comparatively minor that transfer and consolidation would force on them a disproportionate financial burden. We think, however, that this fear is more fanciful than real. Experience has shown that where, as here, common questions of fact exist in a large number of cases, it is not only expedient, but less expensive for each individual defendant to join in the selection of lead counsel to handle the consolidated discovery depositions. Thus, all defendants receive the benefit of the consolidated depositions without the necessity of engaging individual local counsel in the transferee court and without the necessity of extensive travel by their own local counsel.
Aside from the undeniable existence of common questions of fact, there is another compelling reason for transfer and consolidation. It seems clear that "pretrial proceedings" include the power of the transferee judge to grant motions for summary judgment See H.R. Report No. 1130, accompanying S. 159; and cf. In re Plumbing Fixture Cases, 298 F. Supp. 484 (JPML, 1968); In re Fourth Class Postage Regulations, 298 F. Supp. 1326 (JPML, 1969). Here, if discovery on the issues of validity, scope, statutory notice or laches reveals no dispute of any material fact, disposition of the litigation by summary judgment may be appropriate. We of course intimate no opinion on the merits of any such motions. Nevertheless, the possibility of summary disposition certainly lurks in the background. If the litigation is transferred, the result on any such motion would be the same for all parties and thus transfer would be "an appropriate means of avoiding injury to like parties caused by inconsistent judicial treatment." In re Fourth Class Postage Regulations, 298 F. Supp. 1326 (JPML, *515 1969). On balance, and considering all the factors involved, we are convinced that transfer and consolidation of pretrial proceedings will promote the just and efficient conduct of these actions.
The plaintiff originally sought transfer to the Northern District of California, but suggested at argument that the transferee court should be on the East Coast. However, there are four cases presently pending in the Northern District of Illinois and already assigned to the Honorable Hubert Will. We have no doubt that he is familiar with the litigation and its needs. We are advised that his docket is relatively current and that he is willing to accept the transfer of these cases. Since Chicago is geographically central, we think the convenience of the parties will best be served by transfer to Judge Will in the Northern District of Illinois.
There are three related actions in the Central District of California which are not included on Schedule A.[2] Pretrial proceedings in those three cases has progressed to such a point that transfer at this time might not result in the promotion of their just and efficient conduct. They are therefore excluded from this order of transfer. In re Grain Shipments, 300 F. Supp. 1402, 1405 (JPML, 1969); In re Protection Devices and Equipment, etc., 295 F. Supp. 39, 40 (JPML, 1968).
It is therefore ordered that the actions listed on Schedule A pending in other districts be and the same are hereby transferred to the United States District Court for the Northern District of Illinois and with the consent of that court these actions are assigned to the Honorable Hubert L. Will for coordinated or consolidated pretrial proceedings under 28 U.S.C. Section 1407.
STANLEY A. WEIGEL, Judge of the Panel (dissenting):
I respectfully dissent.
The jurisdiction of the Panel is properly invoked in this proceeding because the cases included are civil actions (1) pending in different districts and (2) involving one or more common questions of fact.[1] 28 U.S.C. § 1407.
The presence or absence of these jurisdictional requirements is nearly always readily determinable. The more difficult task of the Panel is to determine whether or not transfers of actions for coordinated or consolidated pretrial proceedings "will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions." Id. In this proceeding, the record presented to us indicates that transfer will serve neither convenience nor justice nor efficiency.
To begin with, the important questions of fact which are common to all the cases are outnumbered by those which are not. The validity of the Butterfield patent presents common factual questions and so does one aspect of the matter of notice of infringement.[2] All other important factual questions require separate examination into the respective activities of each of the defendants in the 41 actions.
Turning now to the specifics supporting that conclusion:
The majority opinion is correct in suggesting that laches will be a common question in the actions. But it will be a common question of law or equity, not of fact. The facts relating to laches will vary from defendant to defendant because the defense of laches always turns upon the facts individually relevant. For example, in one case before us, the defendant alleges that he has been notoriously producing the lens in question for eight years while, in other cases, it is *516 clear that the defendants are newer to the field. Moreover, laches is not available as a defense unless the defendant urging it shows that the delay of the plaintiff has caused detriment to that defendant. This question is necessarily unique to each defendant claiming laches.
The majority opinion also errs to the extent it suggests that notice of infringement will be a significant question of fact for common discovery. Unless the plaintiff marked his claimed invention or its container with the word "patent" and with the patent number, the exact opposite is true.[3] If such mark is absent, then, to recover for infringement, the patentee must prove actual notice to the particular defendant. 35 U.S.C. § 287. The adequacy of the marking is a simple factual question which is common to all the cases. But it is one which will require little discovery. If, however, the marking is inadequate, then the plaintiff will have to prove that he gave notice to each of the defendants in the 41 actions and that each continued thereafter to infringe. That actual notice question will require pretrial discovery of facts unique to each case and common to none.
Finally, the majority opinion fails to recognize that the issue of the scope of the patent involves common questions of fact only in a minor respect. The abstract definition of the scope of the Butterfield patent is, of course, an element common to all the cases.[4] But extrapolation of that definition involves little or no pretrial inquiry. On the other hand, the effective scope of the patent, as opposed to its abstract definition, can be determined solely in concrete cases by measuring each of the defendants' lenses, one by one, against the Butterfield patent. Thus the scope of the patent will be meaningfully determined only by decisions on the issue central to each case infringement. And infringement does not involve common questions of fact. To prove infringement, the plaintiff will have to establish in each case that the lens made by the defendant is of a particular configuration and fits on the wearer's cornea in a particular manner.
In sum, then, there are, at most, two issues involving common questions of fact in these 41 actions. One of the two insofar as it may be common, is factually trivial and will require very little discovery. In contrast, at least three major issues raise complex questions requiring discovery of facts unique to each case.
In the light of the foregoing, can it be said that the statutory criteria for transfer convenience of parties and witnesses, efficiency, and justice are satisfied?
The first and second statutory criteria convenience of parties and of witnesses may be discussed together. In this proceeding, all responding defendants oppose transfer. Only the plaintiff Butterfield supports it. One reason the defendants oppose transfer is clear. They believe that it will substantially increase the costs to them and greatly decrease costs to plaintiff. Plaintiff has brought the actions here involved against 41 widely scattered optometrists and contact lens manufacturers. He indicates an intention to bring hundreds of such actions. Only four of the presently filed suits were brought in Chicago, the transferee district. Thus, more than 90% of these small defendants, scattered from Massachusetts to California, will be forced to conduct pretrial in a forum in which they were not and probably could not have been sued. To suggest that they can employ lead counsel is only to say that they can adopt what may be the *517 least inexpensive mode of dealing with this extra burden.[5]
The extent of the inconvenience to the defendants and their witnesses will turn, in large part, on the range of discovery conducted in the transferee court. Since all the records and witnesses relevant to the question of infringement will be in the areas in which the defendants' respective businesses are located, it would appear that discovery on this issue should be conducted in the transferor districts. It is hardly an answer to say that such discovery may be remanded. The burden will be on the defendants to move the Panel for such remand. Such motions and decisions upon them add to complication, not efficiency. Moreover, if such motions should be denied, the burdens on the defendants of producing for consolidated discovery will be very heavy, indeed. The majority does note that the transferee judge may make orders to protect the defendants, but, once again, the burden is on the defendants to secure such orders.
The defendants are engaged in small optical businesses. The individual damage claims against most of them are relatively small. To increase, by transfer for pretrial, the defendants' litigation costs will be to impose substantial pressure on them to settle even if their position on the merits seems stronger than that of the plaintiff.
For all these reasons, transfer will impose great inconvenience on the many defendants and their witnesses. Convenience to the single plaintiff does not justify the inconveniences, indeed, hardships, to the defendants.
Section 1407 further provides that transfer should promote efficiency. Transfer necessarily imposes extra burdens of paper and clerical work on court clerks and others. An outline of the procedural steps involved in transfers makes this abundantly clear.
The Manual for Clerks circulated by the Panel indicates that the most efficient procedure would be as follows: Upon receiving the Panel's order of transfer, the clerk of the transferee court transmits a certified copy thereof to the clerks of the transferor courts. After receiving and filing this order, each transferor clerk makes an appropriate entry on the docket sheet of each affected case and then forwards to the transferee court the files, records, and a copy of the docket sheet of each transferred case.
The transferee clerk usually maintains a master docket sheet for all transferred cases, individual docket sheets for each such case and a complete combined pretrial file for each transferor court. Thereafter, copies of all motions, depositions, exhibits, and other pretrial papers are included in each combined district file. Notices, orders and pleadings must be served on all counsel for all parties, unless alternative arrangements can be agreed upon.
Motions for remand may be initiated by any party, the transferor or transferee courts or the Panel. Only the Panel has the power to order a remand. Hearings may be necessary. Orders of remands must be transmitted to each transferor court by the transferee court and appropriate entries must be made on all the aforementioned docket sheets. The individual case file, a docket sheet for each remanded case, a copy of the master docket sheet and the combined district file must then be transmitted back to the appropriate district court. If some but not all of the cases from a specific district are remanded, then copies of all subsequent motions, orders and other filings *518 must be sent to the transferor court for inclusion in the combined district file. In re Concrete Pipe, 302 F. Supp. 244, 254-255, n. 1 (JPML 1969).
In this proceeding, a total of 37 cases must be transferred to the Northern District of Illinois from 18 different district courts. Just the routine costs of the paperwork and recordkeeping involved in consolidation will be great.
Because of the clerical costs of transfer, because of the paucity of common questions of fact, and because of the likelihood that the parties will have to make and the Panel hear remand motions, transfers are hardly likely to promote efficiency.
The last question is whether transfer will promote justice. In this regard, the majority opinion places great weight on the possibility that a motion for summary judgment by defendants could terminate the litigation.[6] To the extent that the majority opinion relies upon that possibility, it treads dangerously close to making an assessment on the merit. Such an assessment would transcend the limited powers vested in the Panel by Congress. Those powers relate solely to the transfer and remand of actions consolidated for pretrial proceedings. 28 U.S.C. § 1407. The statute will be searched in vain for any provision empowering the Panel to adjudicate upon the merits. That power of adjudication remains in the appropriate United States courts.
In any event, posed against the justice which may result if summary judgment is eventually granted is the injustice of the adversary advantage given plaintiff by transfer. In fact, this advantage may attend plaintiff even if summary judgment may result since most of the pretrial preparation would very likely have to be completed before consideration of such a motion.
Moreover, the virtue of consolidation in possibly ensuring uniform decisions is likely to be achieved without consolidation. The first decision or decisions reached in these cases, if they are based on common issues, would have persuasive authority in the other cases.
Transfer here, then, is likely not to be convenient nor efficient nor just. It appears to reward a plaintiff whose case is assessed as being weak. And it may well encourage institution of frivolous suits by plaintiffs exploiting Section 1407 transfers to force nuisance value settlements.
EDWARD WEINFELD, Judge of the Panel (dissenting and concurring in the dissent of Judge WEIGEL):
The multiplicity of suits brought against various defendants to recover relatively small damages based upon a patent which has already expired and the delay of eight years suggest harassment and a hope that the heavy expense of defending the actions will lead the defendants to settle rather than to fight. There is much substance to the defendants' contentions of excessive inconvenience and burdensome financial expense, and also that infingement is peculiar in the instance of each defendant. While it is true that some issues, such as the scope of the patent and its validity, are common in all cases, this is not so as to other issues. In my view, it would not, under the circumstances here presented, promote the just and efficient conduct of these particular actions to transfer them to one district for consolidation and coordinated pretrial proceedings.
*519
SCHEDULE A
Southern District of California
George H. Butterfield, Sr. v. San Diego Contact Civil Action
Lens Laboratory, Inc. No. 69-126-S
Eastern District of New York
George H. Butterfield, Sr. v. Ocular Products, Civil Action
Inc. No. 69 Civ 1147
George H. Butterfield, Sr. v. Danker & Wohlk, Civil Action
Inc. No. 69 Civ 1255
George H. Butterfield, Sr. v. Mastercraft Contact Civil Action
Lens Labs, Inc. No. 69 Civ 1256
Southern District of New York
George H. Butterfield, Sr. v. Para Lens, Inc. Civil Action
No. 69 Civ 4003
George H. Butterfield, Sr. v. Precision Contact Civil Action
Lens Laboratories, Inc. No. 69 Civ 4019
George H. Butterfield, Sr. v. Optimum Contact Civil Action
Lenses, Inc. No. 69 Civ 4020
George H. Butterfield, Sr. v. 5 Continents Contact Civil Action
Lens, Inc. No. 69 Civ 4474
George H. Butterfield, Sr. v. Vent Air Contact Civil Action
Lens Laboratories No. 69 Civ 4471
George H. Butterfield, Sr. v. United Contact Civil Action
Lens Corp. No. 69 Civ 4472
George H. Butterfield, Sr. v. Full Sight Contact Civil Action
Lens Corp. No. 69 Civ 4473
Northern District of Texas
George H. Butterfield, Sr. v. Dal-Tex Optical Civil Action
Co. No. CA-3-3331-B
Western District of Texas
George H. Butterfield, Sr. v. Contour Comfort Civil Action
Contact Lens, Inc. No. W-69-CA-48
Southern District of Ohio
George H. Butterfield, Sr. v. Carskadden Optical Civil Action
Co., Inc. No. 69-270
Middle District of Pennsylvania
George H. Butterfield, Sr. v. Morrison Laboratories, Civil Action
Inc. No. 69-339
Western District of Pennsylvania
George H. Butterfield, Sr. v. Erie Contact Lens Civil Action
Laboratory, Inc. No. CA 98-69-Erie
*520
District of Massachusetts
George H. Butterfield, Sr. v. Young Contact Civil Action
Lens Laboratories, Inc. No. 69-969-M
George H. Butterfield, Sr. v. Custom Contact Civil Action
Lens Lab Inc. No. 69-1118-M
George H. Butterfield, Sr. v. Quality Optics, Civil Action
Inc. No. 69-1119-M
Northern District of Georgia
George H. Butterfield, Sr. v. Quality Optics, Inc. Civil Action
No. 13099
Northern District of Illinois
George H. Butterfield, Sr. v. Oculus Contact Civil Action
Lens Co., Inc. No. 69 C 1812
George H. Butterfield, Sr. v. Contact Lens Service, Civil Action
Inc. No. 69 C 2184
George H. Butterfield, Sr. v. Custom Contact Civil Action
Lens Laboratories, Inc. No. 69 C 2186
George H. Butterfield, Sr. v. Fused Kontacts Civil Action
of Chicago, Inc. No. 69 C 2185
Eastern District of Michigan
George H. Butterfield, Sr. v. Custom Laboratories, Civil Action
Inc. No. 33380
Western District of Kentucky
George H. Butterfield, Sr. v. SCL Laboratories, Civil Action
Inc. No. 6376
Eastern District of Louisiana
George H. Butterfield, Sr. v. Custom Contact Civil Action
Lens Laboratories, Inc. No. 69-2346
District of Nebraska
George H. Butterfield, Sr. v. Precision Optics, Civil Action
Inc. No. 03403
George H. Butterfield, Sr. v. Rite-Style Optical Civil Action
Co., Inc. No. 03404
Western District of Oklahoma
George H. Butterfield, Sr. v. Professional Research Civil Action
Contact Lens, Inc. No. Civ-69-449
Western District of Washington
George H. Butterfield, Sr. v. Peninsula Optical Civil Action
No. 8607
Northern District of California
George H. Butterfield, Sr. v. Pace Optical Co., Civil Action
Inc. No. C69-18 GSL
[1] All defendants appearing at argument oppose transfer, but not all defendants appeared.
[2] Butterfield v. Obrig Distributors, CA No. 69-871-FW; Butterfield v. Calcon Lab., CA No. 69-958-FW; Butterfield v. Danker & Wohlk Associates, CA No. 69-997-FW.
[1] There are 41 cases pending in 19 widely scattered United States District Courts.
[2] See infra at 513.
[3] Although plaintiff alleges proper marking in his pleadings, he also alleges actual notice. In a deposition taken by defendant John H. Rottmann, plaintiff seems to admit that he has never taken steps to enforce patent marking by his licensees.
[4] In the prosecution of the Butterfield patent, No. 2,544,246, its scope has been generally limited to a contact lens whose interior side conforms to the curvature of the wearer's cornea.
[5] The unqualified statement in the majority opinion on the benefits of employing lead counsel may impel some litigants before the Panel to retain counsel they otherwise would not select.
[6] At least three Butterfield patent cases have already completed pretrial and will go to trial soon. It appears that summary judgment has not been granted in any of them.