Inre: Uusi, LLC

Case: 13-155 Document: 22 Page: 1 Filed: 11/22/2013
NOTE: This order is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
IN RE UUSI, LLC, AND OLDNAR CORPORATION,
Petitioners.
______________________
2013-155
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On Petition for Writ of Mandamus to the United
States Court of Federal Claims in No. 12-CV-0216, Judge
Mary Ellen Coster Williams.
______________________
ON PETITION
______________________
Before NEWMAN, PROST, and REYNA, Circuit Judges.
REYNA, Circuit Judge.
ORDER
Petitioners Uusi, LLC and OLDNAR Corporation
(“Uusi”) ask this court for interlocutory review of an order
of the United States Court of Federal Claims denying
their motion to dismiss third-party defendants, Grand
Haven Stamped Products Co. (“GHSP”) and AM General
LLC (“AM General”) from this suit.
In denying that motion, the Court of Federal Claims
found that the third parties had a sufficient interest in
this case and that the court had authority to allow them
enter an appearance and file pleadings under Court of
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2 IN RE UUSI, LLC
Federal Claims Rule 14(b). That rule specifies, in perti-
nent part, that the court “may notify any person with the
legal capacity to sue or to be sued who is alleged to have
an interest in the subject matter of the suit,” and upon
issuance of notice, “[a] person . . . may file an appropriate
pleading setting forth the person’s interest in the subject
matter of the litigation.”
Contending the Court of Federal Claims exceeded its
jurisdiction in doing so, petitioners ask us to issue a writ
of mandamus compelling the court to dismiss the parties
and pleadings. While mandamus may be used “to confine
an inferior court to a lawful exercise of its prescribed
jurisdiction,” Roche v. Evaporated Milk Ass’n, 319 U.S. 21,
26 (1943), here we conclude the Court of Federal Claims’
ruling was lawful and thus deny the petition.
BACKGROUND
Petitioners brought this 28 U.S.C. § 1498 action
against the government in the Court of Federal Claims.
According to petitioners’ complaint, GHSP and AM Gen-
eral manufactured certain remote control switch systems
that infringed Uusi’s patents and entered into contracts
with the government “pursuant to which the accused
products are now embodied in the structure of the articles
accepted by the Government.”
The government moved to issue notice to GHSP and
AM General pursuant to Rule 14(b). It pointed out that
GHSP and AM General had an interest in the suit be-
cause they manufactured the accused products and con-
tractually agreed to indemnify the government against
liability for patent infringement.
After the Court of Federal Claims granted the gov-
ernment’s request, GHSP and AM promptly filed answers,
asserting, among other things, that Uusi had licensed the
patents to the third party defendants, or alternatively,
Uusi was barred from bring suit under the doctrines of
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IN RE UUSI, LLC 3
waiver, laches, equitable estoppel and judicial estoppel.
The third-party defendants’ answers also requested
attorney’s fees, costs, and expenses.
In its order denying petitioners’ motion to dismiss, the
court explained that “neither GHSP nor AM General has
asserted claims against Plaintiffs, and there is no im-
pleader-type claims that must be supported independent-
ly by subject-matter jurisdiction.”
The Court of Federal Claims further rejected petition-
ers’ argument that GHSP and AM General’s pleadings
failed to set forth their interest in the subject matter of
the litigation. In doing so, the court looked to Uusi’s own
complaint, which noted that GHSP and AM General had
contracted with the government and manufactured the
disputed products.
DISCUSSION
To prevail here, Uusi must show: (1) that they have a
clear and indisputable legal right to relief; (2) that there
are no adequate alternative legal channels through which
petitioners may obtain that relief; and (3) that the grant
of mandamus is appropriate under the circumstances.
See Cheney v. U.S. Dist. Court, 542 U.S. 367, 380-81
(2004); Kerr v. U.S. Dist. Court, 426 U.S. 394, 403 (1976).
In attempting to meet that standard, petitioners’ pri-
mary argument is that the Court of Federal Claims
exceeded its jurisdiction in allowing these third parties to
participate in this case because the Contract Settlement
Act of 1944, upon which Rule 14 was originally modeled,
was repealed in 2011. 1 The trial court rejected petition-
ers’ argument, and so do we.
1 The legislative history behind the law repealing 41
U.S.C. § 114, Pub. L. No. 111-350, 124 Stat. 3677 (2011),
suggests that the purpose was merely to restate the law
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4 IN RE UUSI, LLC
Our reasoning is simple: the judgment of the Court of
Federal Claims will not be entered against either AM
General or GHSP. We have characterized a third party
participating under Rule 14 as “at most a nominal de-
fendant” where no claim is directed at the third party and
the judgment on appeal does not determine the third
party’s obligations to indemnify the government. Penda
Corp. v. United States, 44 F.3d 967, 970-71 (Fed. Cir.
1994). In such cases, as here, the grant of third party
status under Rule 14 “does not affect the jurisdiction of
the Court of Federal Claims.” Id. at 971.
Petitioners suggest that the government and claimant
can be the only parties before the Court of Federal Claims
absent a statute like the Contract Settlement Act express-
ly stating otherwise. But, this argument goes too far:
Our cases recognize at least some third-party participa-
tion based on the Court of Federal Claims’ own rulemak-
ing authority, which itself is supported by statute. See
Wolfsen Land & Cattle Co. v. Pac. Coast Fed’n of Fisher-
men’s Ass’n, 695 F.3d 1310, 1314 (Fed. Cir. 2012); Ameri-
can Mar. Transp., Inc. v. United States, 870 F.3d 1559,
1561 (Fed. Cir. 1989); see also 28 U.S.C. §§ 2071(a),
2503(b).
Our decision in American Maritime, for instance, ad-
dressed the analogous doctrine of third-party interven-
tion. Relying on Court of Federal Claims Rule 24, we
explained that a party could intervene “to protect those
interests which are of such direct and immediate charac-
ter that the intervenor will either gain or lose by the
direct legal operation and effect of the judgment.” 870
F.3d at 1561 (quotation omitted). We see no reason to
deny AM General and GHSP the right to participate in
this case merely because they were brought in under Rule
and not to make any substantive changes. See H.R. Rep.
No. 111-42, at 3 (2009).
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IN RE UUSI, LLC 5
14. Like parties that intervene, the third parties here
have voluntarily appeared to “offer additional evidence on
[their] own behalf and advance such legal contentions as
[they deem] appropriate in the protection of [their] inter-
est.” Penda Corp., 44 F.3d at 970.
Petitioners have failed to establish that AM General’s
and GHSP’s answers do more than that. To be sure, the
Court of Federal Claims cannot use its rulemaking au-
thority to expand upon its jurisdiction and adjudicate a
claim between private parties. See United States v.
Sherwood, 312 U.S. 584, 588 (1941). But in this case, as
the Court of Federal Claims correctly observed, “neither
GHSP nor AM General has asserted claims against [peti-
tioners], and there are no impleader-type claims that
must be supported independently by subject-matter
jurisdiction.”
Rolls-Royce Limited v. United States, 364 F.2d 415
(Cl. Ct. 1966), which is cited by both petitioners and
respondents, is particularly instructive on this point. In
Rolls-Royce, a third party was granted permission to
intervene because it had agreed to indemnify the govern-
ment against liability for patent infringement. Id. at 416.
The third party defendant’s answer raised affirmative
defenses to plaintiff’s principal claim, including patent
invalidity, non-infringement, and license, and also raised
counterclaims against the plaintiff to recover damages for
a breach of contract and for declaratory relief. Id. at 416-
17.
The Rolls-Royce court noted that the third party de-
fendant’s answer did not raise any problems insofar as
asserting defenses and representing its interests in the
case. Id. at 416. The court, however, found that it lacked
jurisdiction over the third party’s counterclaims because
it would amount to an adjudication of a dispute between
private parties that was not part of the plaintiff’s action
against the government. Id. at 417-18. Therefore, the
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6 IN RE UUSI, LLC
court held that the counterclaims went beyond the juris-
diction of the court, and accordingly granted a motion to
dismiss those claims.
Rolls-Royce demonstrates when a third-party answer
impermissibly exceeds the scope of the Court of Federal
Claim’s limited jurisdiction. Here, as in Rolls-Royce,
there is no jurisdictional concern resulting from the third
parties’ pleadings merely raising potential defenses
paralleling those already raised by the government that
could preclude a finding of the government’s liability.
Unlike in Rolls-Royce, however, AM General and GHSP
are not seeking affirmance or declaratory relief against
Uusi. Accordingly, the pleadings do not raise claims that
exceed the Court of Federal Claims’ jurisdiction.
Similarly unavailing are Uusi’s arguments regarding
GHSP and AM General’s general requests for attorney
fees and costs. Such proceedings are independent and
ancillary to a federal court’s subject matter jurisdiction.
See generally White v. N. H. Dep’t of Emp’t Sec., 455 U.S.
445, 451 (1982); Sprague v. Ticonic Nat’l Bank, 307 U.S.
161, 170 (1939); 13 Wright & Miller, Fed. Prac. & Proc.
§ 3523.2, at 218-19 (2008).
B.
Uusi alternatively asserts that GHSP and AM Gen-
eral’s answers were insufficient to establish their interest
in the suit. We review a finding that an answer is suffi-
cient under Rule 14 on mandamus for a “clear abuse of
discretion.” See Cheney, 542 U.S. at 390. We consider a
finding to be a clear abuse of discretion only if there is no
“rational and substantive legal argument [that] can be
made in support of the rule in question[.]” In re Cordis
Corp., 769 F.2d 733, 737 (Fed. Cir. 1985).
After discussing the references to GHSP and AM
General in Uusi’s own complaint and the government’s
motion, the Court of Federal Claims concluded that
Case: 13-155 Document: 22 Page: 7 Filed: 11/22/2013
IN RE UUSI, LLC 7
“GHSP and AM General have identified their clear inter-
est in the subject matter of this litigation, namely their
potential indemnification responsibilities if the Govern-
ment is found liable to Plaintiffs for patent infringement.”
The court further recognized that an indemnifier has a
sufficient interest in litigation to offer evidence and
advance legal arguments appropriate to protect its own
interests.
In an attempt to show that GHSP and AM General’s
answers were insufficient, Uusi argues that they failed to
identify any contracts by which the accused products were
sold or admit to any indemnification obligations that may
give rise to liability against a claim by the government.
This argument, however, fails to take into account that
the government had already demonstrated the third-party
defendants’ contractual obligations in its motion for Rule
14 notice. The Court of Federal Claims was thus already
aware of its interest in the dispute and why it should be
allowed to participate. We therefore cannot say that the
court clearly abused its discretion in finding that the
answers here were sufficient to demonstrate the third
parties’ interest in this matter.
Accordingly,
IT IS ORDERED THAT:
The petition is denied.
FOR THE COURT
/s/ Daniel E. O’Toole
Daniel E. O’Toole
Clerk of Court