Ubiquitous Connectivity, Lp v. Txu Energy Retail Company LLC

Case: 23-1349 Document: 19 Page: 1 Filed: 06/09/2023
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
UBIQUITOUS CONNECTIVITY, LP,
Plaintiff
CHARLES SHAMOON,
Movant-Appellant
v.
TXU ENERGY RETAIL COMPANY LLC,
Defendant-Appellee
______________________
2023-1349
______________________
Appeal from the United States District Court for the
Northern District of Texas in Nos. 3:18-cv-02084-K, 3:20-
cv-03586-K, Judge Ed Kinkeade.
______________________
Decided: June 9, 2023
______________________
CHARLES SHAMOON, SR., Little Elm, TX, pro se.
ANITA SPIETH, Choate Hall & Stewart LLC, Boston,
MA, for defendant-appellee. Also represented by JOHN
MARTIN JACKSON, Jackson Walker LLP, Dallas, TX.
______________________
Case: 23-1349 Document: 19 Page: 2 Filed: 06/09/2023
2 UBIQUITOUS CONNECTIVITY, LP v.
TXU ENERGY RETAIL COMPANY LLC
Before LOURIE, TARANTO, and HUGHES, Circuit Judges.
PER CURIAM.
Ubiquitous Connectivity, LP, sued TXU Energy Retail
Co. LLC in the Northern District of Texas, alleging in-
fringement of three U.S. patents. When the attorneys for
Ubiquitous moved to withdraw from representation (be-
cause Ubiquitous terminated their representation), the dis-
trict court—recognizing that Ubiquitous, a limited
partnership, could appear only through licensed counsel—
deferred ruling on the motion until replacement counsel for
Ubiquitous appeared. Replacement counsel was never
named and did not appear; instead, Charles Shamoon, on
behalf of Ubiquitous as its president, assigned the three as-
serted patents to himself in his personal capacity and
moved to substitute himself for Ubiquitous as the plaintiff.
TXU opposed and moved to dismiss the case because Ubiq-
uitous, by failing to retain replacement counsel, failed to
prosecute it. The district court granted TXU’s motion, dis-
missing the case without prejudice under Federal Rule of
Civil Procedure 41(b); and with the case dismissed, the
court denied Mr. Shamoon’s motion to substitute as moot.
Mr. Shamoon in his personal capacity—but not Ubiqui-
tous—appeals. We affirm.
I
On August 10, 2018, Ubiquitous sued TXU in the
Northern District of Texas, alleging infringement of U.S.
Patent Nos. 8,064,935 and 9,602,655. On December 8,
2020, Ubiquitous brought another action against TXU in
the same court, alleging infringement of U.S. Patent No.
10,344,999. The district court consolidated the two cases
on July 8, 2021.
On March 30, 2022, two attorneys representing plain-
tiff Ubiquitous moved to withdraw. One month later, the
district court denied the motion without prejudice, explain-
ing that the motion failed to specify the reasons for
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UBIQUITOUS CONNECTIVITY, LP v. 3
TXU ENERGY RETAIL COMPANY LLC
withdrawal and that, if the motion were to be refiled, it
would need to explain whether the two other attorneys who
had also entered appearances for Ubiquitous, but who had
not moved to withdraw, would remain as counsel. On June
3, 2022, all four attorneys representing Ubiquitous moved
to withdraw, explaining that Ubiquitous had terminated
their representation and had retained replacement coun-
sel. The district court, “out of an abundance of caution,”
deferred ruling on the motion “until Plaintiff’s replacement
counsel has been named or otherwise makes an appearance
in this case” for Ubiquitous, setting July 1, 2022, as the
deadline for entry of an appearance. Appx. 411 (N.D. Tex.
ECF No. 45).
The July 1 deadline passed without replacement coun-
sel entering an appearance, and the four attorneys who had
moved to withdraw asserted in a supplemental filing that
Ubiquitous “ha[d] not identified [its] official replacement
counsel to date.” Appx. 412 (N.D. Tex. ECF No. 47). On
July 6, 2022, the district court ordered the replacement
counsel to appear by July 25, 2022, warning:
Failure to timely comply with this order may result
in dismissal of this case for want of prosecution, an
order for Plaintiff’s corporate representative to ap-
pear and show cause as to why replacement coun-
sel has not made an appearance (i.e., complied with
this Order), and / or any other available sanctions
the Court deems appropriate.
Appx. 417–18 (N.D. Tex. ECF No. 48) (citing Fed. R. Civ.
P. 11, 42). The district court continued to defer ruling on
the motion to withdraw because the court, recognizing that
“Plaintiff—a limited partnership—must be represented by
licensed counsel,” “w[ould] not permit Plaintiff to proceed
pro se, even for a limited time while seeking replacement
counsel.” Appx. 417 (citing Rowland v. California Men’s
Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 202
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4 UBIQUITOUS CONNECTIVITY, LP v.
TXU ENERGY RETAIL COMPANY LLC
(1993); Memon v. Allied Domecq QSR, 385 F.3d 871, 873
(5th Cir. 2004)).
Five days before the July 25 deadline, Mr. Shamoon
filed a “request to represent [him]self pro se,” asserting
that the ’935, ’655, and ’999 patents had been assigned to
him. Appx. 419 (N.D. Tex. ECF No. 50). Attached to that
filing was a document dated July 19, 2022, and titled “as-
signment of rights,” in which Mr. Shamoon—on behalf of
Ubiquitous as its president—assigned the three patents to
Mr. Shamoon for $5. Appx. 420–23 (N.D. Tex. ECF No. 50);
see also U.S. Patent & Trademark Office, No. 507392198,
Patent Assignment Cover Sheet (recording the assign-
ments of the ’935, ’655, and ’999 patents to Mr. Shamoon).
Two days later, on July 22, 2022, Mr. Shamoon filed a doc-
ument titled “Ubiquitous Connectivity LP No Longer the
Plaintiff.” Appx. 425 (N.D. Tex. ECF No. 51). The district
court denied Mr. Shamoon’s motion to represent himself
pro se as noncompliant with Federal Rule of Civil Proce-
dure 25 (addressing substitution) and struck the July 22
filing as procedurally deficient.
On August 8, 2022, Mr. Shamoon moved to substitute
himself for Ubiquitous as the plaintiff. TXU opposed and
moved to dismiss under Federal Rule of Civil Procedure
41(b) for failure to prosecute. Mr. Shamoon and Ubiquitous
then filed a joint motion to substitute parties on September
9, 2022, a motion in which the only counsel signing for
Ubiquitous was its corporate counsel, who noted that he
and his firm did “not undertake representation in the
above-referenced matter.” Appx. 460 (N.D. Tex. ECF No.
59). The district court referred the motions to Magistrate
Judge Horan.
On November 9, 2022, the magistrate judge recom-
mended granting the motion to dismiss and denying as
moot the motions to substitute and to withdraw. See Ubiq-
uitous Connectivity, LP v. TXU Energy Retail Co., No. 18-
cv-2048, 2022 WL 17364274 (N.D. Tex. Nov. 9, 2022)
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UBIQUITOUS CONNECTIVITY, LP v. 5
TXU ENERGY RETAIL COMPANY LLC
(Horan, Mag. J.). Magistrate Judge Horan reasoned that
Ubiquitous was “attempting to circumvent the require-
ment that [limited partnerships] appear with licensed
counsel and refusing to comply with the Court’s order for
replacement counsel to appear on [its] behalf” and that
Ubiquitous thereby had “prevented this action from pro-
ceeding properly and thus failed to prosecute this lawsuit.”
Id. at *3. The magistrate judge noted that Ubiquitous had
been warned that dismissal without prejudice was a poten-
tial consequence of noncompliance, id. at *4, and he con-
cluded that a “Rule 41(b) dismissal of this lawsuit without
prejudice [wa]s warranted,” id. at *3. He added that the
motion to substitute would be moot if, as recommended, the
case were dismissed. Id. at *4.
District Judge Kinkeade adopted the findings, conclu-
sions, and recommendations of Magistrate Judge Horan on
November 30, 2022. See Ubiquitous Connectivity, LP v.
TXU Energy Retail Co., No. 18-cv-2084, 2022 WL 17364261(N.D. Tex. Nov. 30, 2022). Judgment was entered the same
day, dismissing the action without prejudice and, even so,
granting Ubiquitous “leave to file a motion to reopen this
action” if an attorney enters an “appearance on Ubiqui-
tous’s behalf as its litigation counsel within thirty days
from the date of this Order.” Appx. 14 (N.D. Tex. ECF No.
67).
Mr. Shamoon timely filed a notice of appeal on Decem-
ber 28, 2022, within the 30 days allowed by 28 U.S.C.
§ 2107(b). The notice names as appellant only Mr. Sha-
moon—not Ubiquitous, which Mr. Shamoon says “has ab-
solutely no interest in the patents.” Shamoon Informal
Opening Br. at 2. We have jurisdiction under 28 U.S.C.
§ 1295(a)(1).
II
TXU briefly asserts, in its jurisdictional statement,
that Mr. Shamoon cannot bring this appeal as he “is not
aggrieved by the dismissal” of the action brought by
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6 UBIQUITOUS CONNECTIVITY, LP v.
TXU ENERGY RETAIL COMPANY LLC
Ubiquitous, an action to which he was not a party. Ubiq-
uitous Informal Response Br. at 2 (citing Nisus Corp. v.
Perma-Chink Systems, Inc., 497 F.3d 1316, 1319 (Fed. Cir.
2007)). We disagree. But on the merits, we agree with
TXU’s argument that the district court committed no re-
versible error.
A
Mr. Shamoon was aggrieved by the district court’s or-
der that denied his motion to substitute himself for Ubiq-
uitous as the plaintiff upon the grant of the motion for
dismissal of the case without prejudice. As the new as-
signee of the patents at issue, he would have had the re-
quired Article III stake in the case if substituted. For
Article III purposes, then, Mr. Shamoon falls within the
widely recognized principle that “a nonparty that unsuc-
cessfully seeks to be substituted may appeal” from the de-
nial of substitution, 15A Charles A. Wright & Arthur R.
Miller, Federal Practice & Procedure § 3902.1 (3d ed. up-
dated Apr. 2023), a denial that, being for mootness, de-
pends in this case directly on the dismissal of the action.
And though not a “party” to the case in district court, a per-
son in Mr. Shamoon’s position, who filed a motion to be sub-
stituted to become a party in the district court, qualifies as
a “party” for purposes of Federal Rule of Appellate Proce-
dure 3’s requirement that a notice of appeal “specify the
party or parties taking the appeal by naming each one in
the caption or body of the notice,” Fed. R. App. P. 3(c)(1)(A);
see, e.g., Billino v. Citibank, N.A., 123 F.3d 723, 724–25 (2d
Cir. 1997) (explaining that an appeal from a district court’s
denial of a nonparty widow’s motion to substitute herself
as plaintiff for her deceased husband “should have been
[filed] in [the nonparty widow’s] name”); United States ex
rel. Alexander Volkhoff, LLC v. Janssen Pharmaceutica
N.V., 945 F.3d 1237, 1241 (9th Cir. 2020) (explaining that
Rule 3 “echoes the requirements of standing,” and citing
Raley v. Hyundai Motor Co., 642 F.3d 1271, 1274 (10th Cir.
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UBIQUITOUS CONNECTIVITY, LP v. 7
TXU ENERGY RETAIL COMPANY LLC
2011) (Gorsuch, J.)). For those reasons, this court may
hear Mr. Shamoon’s appeal.
B
On the merits, we affirm the order challenged on ap-
peal, which dismissed the case without prejudice under
Federal Rule of Civil Procedure 41(b) for failure to prose-
cute and, because the case was dismissed, denied the mo-
tion to substitute as moot. The dispositive ruling is the
dismissal ruling. We review a Rule 41(b) dismissal order
according to the law of the relevant regional circuit, here
the Fifth Circuit. See Euclid Chemical Co. v. Vector Corro-
sion Technologies, Inc., 561 F.3d 1340, 1345 (Fed. Cir.
2009). The Fifth Circuit reviews such dismissals for an
abuse of discretion. See, e.g., Griggs v. S.G.E. Manage-
ment, L.L.C., 905 F.3d 835, 844 (5th Cir. 2018).
Rule 41(b) allows a district court to involuntarily dis-
miss an action “[i]f the plaintiff fails to prosecute or to com-
ply with these rules or a court order.” The rule helps “to
‘achieve the orderly and expeditious disposition of cases.’”
Morris v. Ocean Systems, Inc., 730 F.2d 248, 251 (5th Cir.
1984) (quoting Link v. Wabash Railroad Co., 370 U.S. 626,
631 (1962); citing Anthony v. Marion County General Hos-
pital, 617 F.2d 1164, 1167 (5th Cir. 1980)). Federal courts
often “treat[] . . . noncompliance with [a] court order[] as a
failure to prosecute” because those two grounds often “over-
lap.” 9 Wright & Miller § 2369 (4th ed. updated Apr. 2023);
see also Cintron-Lorenzo v. Departamento de Asuntos del
Consumidor, 312 F.3d 522, 527–28 (1st Cir. 2002) (affirm-
ing a district court’s dismissal for “lack of prosecution” due
to “noncompliance” with court orders).
“[D]ismissals without prejudice generally cause mini-
mal harm.” Bechuck v. Home Depot U.S.A., Inc., 814 F.3d
287, 297–98, 298 n.18 (5th Cir. 2016). In the absence of a
“statute of limitations [that] prevents or arguably may pre-
vent a party from refiling his case after it has been dis-
missed,” the Fifth Circuit “[o]rdinarily . . . appl[ies] a less
Case: 23-1349 Document: 19 Page: 8 Filed: 06/09/2023
8 UBIQUITOUS CONNECTIVITY, LP v.
TXU ENERGY RETAIL COMPANY LLC
stringent standard of review to a [d]istrict [c]ourt’s dismis-
sal of a suit without prejudice” than to a dismissal with
prejudice. Boazman v. Economics Laboratory, Inc., 537
F.2d 210, 212–13 (5th Cir. 1976).
We see no abuse of discretion in the district court’s dis-
missal of this case without prejudice. No argument has
been made to disturb the district court’s premise that Ubiq-
uitous, as a legal entity rather than a natural person, had
to be represented by counsel to conduct its litigation. 1 Af-
ter Ubiquitous failed to comply with the district court’s or-
der to name replacement counsel for the withdrawing
counsel by July 1, 2022, the district court sua sponte
granted an extension and a new deadline of July 25, 2022.
The district court then warned Ubiquitous that “[f]ailure to
timely comply with th[e] order may result in a dismissal of
this case for want of prosecution.” Appx. 417 (N.D. Tex.
ECF No. 48); see, e.g., Ramsay v. Bailey, 531 F.2d 706, 709
(5th Cir. 1976) (noting that a district court’s “warnings that
dismissal would result from continued failure to proceed
properly” supported a dismissal with prejudice (citing 9
Wright & Miller § 2370)). When Ubiquitous again failed to
1 See, e.g., Rowland, 506 U.S. at 201–02 (“It has been
the law for the better part of two centuries . . . that a cor-
poration may appear in the federal courts only through li-
censed counsel.”); Osborn v. Bank of United States, 22 U.S.
(9 Wheat.) 738, 830 (1824) (“A corporation, it is true, can
appear only by attorney, while a natural person may ap-
pear for himself.”); Southwest Express Co. v. Interstate
Commerce Commission, 670 F.2d 53, 55 (5th Cir. 1982) (per
curiam) (“The rule is well established that a corporation
can appear in a court of record only by an attorney at law.”
(quoting Florida Construction Co. v. Fireman’s Fund Insur-
ance Co., 307 F.2d 413, 414 (10th Cir. 1962); citing Algonac
Manufacturing Co. v. United States, 458 F.2d 1373, 1375
(Ct. Cl. 1972))).
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UBIQUITOUS CONNECTIVITY, LP v. 9
TXU ENERGY RETAIL COMPANY LLC
comply, the district court considered the possibility of less
drastic sanctions but concluded that they were futile. See,
e.g., In re Deepwater Horizon, 907 F.3d 232, 235 (5th Cir.
2018) (per curiam) (noting that lesser sanctions not having
“serve[d] the best interests of justice” supported a dismis-
sal (footnote omitted) (quoting Sealed Appellant v. Sealed
Appellee, 452 F.3d 415, 417 (5th Cir. 2006))). And the dis-
trict court’s dismissal of the case brought by Ubiquitous
was the “[l]esser sanction[]” of dismissal without prejudice.
Bryson v. United States, 553 F.3d 402, 403 (5th Cir. 2008)
(per curiam); see also In re Deepwater Horizon, 907 F.3d at
236.
The fact that Mr. Shamoon was waiting in the wings,
offering himself as a substitute for Ubiquitous, does not
render the dismissal an abuse of discretion. Indeed, to the
extent that Mr. Shamoon was (as he suggests) entitled as
the new assignee to be substituted for Ubiquitous to press
claims against TXU of infringement of the patents at issue,
the burden on Ubiquitous of appearing with counsel was
quite limited—perhaps amounting to little more than ap-
pearing for proceedings on the motion to substitute. If the
burden was so limited, the district court was especially rea-
sonable in insisting on such formal participation by the ex-
isting plaintiff. See 7C Wright & Miller § 1958 (3d ed.
updated Apr. 2023) (noting that Rule 25(c) “incorporates by
reference the provisions of Rule 25(a),” which requires a
motion to substitute, together with a notice of hearing, to
be served on the existing parties, although the district
court need not actually hold the hearing “if it determines
[that the hearing] is not necessary”).
We therefore see no reversible error in the district
court’s dismissal without prejudice. Mr. Shamoon does not
dispute that it follows from that conclusion that Mr. Sha-
moon’s motion to substitute was moot. See, e.g., In re Lu-
cent Death Benefits ERISA Litigation, 541 F.3d 250, 257
(3d Cir. 2008) (“affirm[ing] the decision of the [d]istrict
[c]ourt dismissing the pensioners’ complaint and denying
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10 UBIQUITOUS CONNECTIVITY, LP v.
TXU ENERGY RETAIL COMPANY LLC
as moot Helen Lucas’ motion to substitute herself in this
case for her deceased husband”).
III
For the foregoing reasons, we affirm the order of the
district court dismissing without prejudice and denying the
motion to substitute.
No costs.
AFFIRMED