Zaccari v. United States

In the United States Court of Federal Claims
No. 18-945C
(E-Filed: April 2, 2019)
)
NEIL ZACCARI, )
Copyright; 28 U.S.C. § 1498(b)
)
(2012); Claim for Infringement of
Plaintiff, )
Software Developed Independently
)
of Contract Work for the
v. )
Government; 28 U.S.C. § 1500)
(2012); Whether Two Suits Filed
THE UNITED STATES, )
Simultaneously in District Courts
)
Bar Suit in This Court.
Defendant. )
)
Robert D. Michaux, Richmond, VA, for plaintiff. Kirk T. Schroder, of counsel. 1
Gary L. Hausken, Director, with whom was Joseph H. Hunt, Assistant Attorney
General, Commercial Litigation Branch, Civil Division, United States Department
of Justice, Washington, DC, for defendant.
OPINION
CAMPBELL-SMITH, Judge.
The court has before it defendant’s motion to dismiss, which is brought
pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal
Claims (RCFC). See ECF No. 8. The motion has been fully briefed. Oral
argument was neither requested by the parties nor deemed necessary by the court.
Within his response brief, plaintiff states that he withdraws Counts II and
III of his complaint. See ECF No. 9 at 1 (plaintiff’s response). Thus, plaintiff
represents that his only remaining claim before the court is one for copyright
infringement, Count I of the corrected complaint, brought pursuant to 28 U.S.C.
1
Although the corrected complaint and plaintiff’s response brief were filed
by Mr. Michaux, counsel for plaintiff is now Mr. Schroder. See ECF No. 18.
§ 1498(b) (2012). 2 See ECF No. 4 at 8-10 (corrected complaint, hereinafter
complaint). According to defendant, this claim is barred by 28 U.S.C. § 1500(2012) because plaintiff filed two suits in two federal district courts the same day
he filed the subject matter in this court. See ECF No. 8 at 3-6 (defendant’s
motion); ECF No. 14 at 2-8 (defendant’s reply). For the reasons stated below,
defendant’s motion to dismiss is DENIED in part, as to Count I of the complaint,
and GRANTED in part, as to Counts II and III of the complaint.
I. Factual Background 3
Plaintiff Neil Zaccari asserts that he developed, and registered a copyright
for, contract receipt and review (CRR) Software. ECF No. 4 at 2-3; ECF No. 4-1
at 2. Mr. Zaccari also worked as a “business process redesign consultant” between
2015 and 2017 for Apprio, Inc. (Apprio), which at that time was a contractor for
the Defense Contract Management Agency (DCMA). ECF No. 4 at 1, 3, 7.
Generally, plaintiff contends that he demonstrated his CRR Software to Apprio
and DCMA, and that DCMA infringed upon his copyrighted software. Id. at 4-10.
According to plaintiff, another contractor for DCMA, Discover
Technologies LLC (DT), collaborated with DCMA “to copy Zaccari’s CRR
Software and prepare a derivative work that uses some or all of the source code in
Zaccari’s CRR Software.” Id. at 1, 6. DT is alleged to have submitted invoices to
DCMA “while it used Zaccari’s CRR Software without his authorization.” Id. at
8. Generally, DCMA is alleged to have shared copies of the CRR Software with
other United States Department of Defense agencies, and to have widely
disseminated a derivative software product, ConCISE, among its employees. Id.
at 6-8. Mr. Zaccari seeks $63,000,000 in damages in this suit. Id. at 13.
Mr. Zaccari filed three suits on June 29, 2018. Aside from the complaint
filed here against the United States, he filed “complaints against Apprio in the
U.S. District Court for the District of Columbia and against DT in the U.S. District
2
In relevant part, this statutory provision states that “whenever the copyright
in any work protected under the copyright laws of the United States shall be
infringed by the United States, by a corporation owned or controlled by the United
States, or by a contractor, subcontractor, or any person, firm, or corporation acting
for the Government and with the authorization or consent of the Government, the
exclusive action which may be brought for such infringement shall be an action by
the copyright owner against the United States in the Court of Federal Claims.” 28
U.S.C. § 1498(b).
3
The facts are taken from plaintiff’s complaint and are undisputed by
defendant in its motion to dismiss. The court makes no findings of fact here.
2
Court for the Eastern District of Virginia.” Id. at 1. The court reserves—for the
analysis section of this opinion—its review of relevant facts alleged in the
complaint on this court’s docket, and the complaints filed in the district court suits.
The court turns first to the standard of review applicable to defendant’s motion to
dismiss.
II. Standard of Review for Motions Brought Under RCFC 12(b)(1)
When reviewing a complaint to determine its jurisdiction over a plaintiff’s
claims, this court must presume all undisputed factual allegations to be true and
construe all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416
U.S. 232, 236 (1974), abrogated on other grounds by Harlow v. Fitzgerald, 457
U.S. 800 (1982); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747
(Fed. Cir. 1988) (citations omitted). Plaintiff bears the burden of establishing
subject matter jurisdiction, Alder Terrace, Inc. v. United States, 161 F.3d 1372,
1377 (Fed. Cir. 1998) (citing McNutt v. Gen. Motors Acceptance Corp. of Ind.,
298 U.S. 178, 189 (1936)), and he must do so by a preponderance of the evidence,
Reynolds, 846 F.2d at 748 (citations omitted). If jurisdiction is found to be
lacking, this court must dismiss the action. RCFC 12(h)(3).
III. Analysis
Before turning to Count I of the complaint, the copyright infringement
claim, the court briefly addresses Count II, a claim requesting preliminary and
permanent injunctive relief, and Count III, titled “misappropriation of trade
secret.” ECF No. 4 at 11-13. Although plaintiff, in his response brief, states that
he has withdrawn these two claims, see ECF No. 9 at 1, defendant requests that the
court dismiss Counts II and III to ensure that the withdrawal of these claims is
achieved by a means sanctioned by this court’s rules. See ECF No. 14 at 1 n.1.
Dismissal of Counts II and III is warranted for the following reasons.
A. Preliminary and Permanent Injunctive Relief (Count II)
Count II of the complaint requests preliminary and permanent injunctive
relief. See ECF No. 4 at 11-12. “Except in strictly limited circumstances, see 28
U.S.C. § 1491(b)(2) [(2012)], there is no provision in the Tucker Act authorizing
the Court of Federal Claims to order equitable relief.” Massie v. United States,
226 F.3d 1318, 1321 (Fed. Cir. 2000) (citations omitted). As defendant explains
in its motion to dismiss, there is no exception to this general rule for copyright
infringement cases brought under § 1498(b). See ECF No. 8 at 7-8 (citing cases);
e.g., Boyle v. United States, 44 Fed. Cl. 60, 65 (1999) (Boyle I) (citations
omitted), aff’d, 200 F.3d 1369 (Fed. Cir. 2000). Because plaintiff has not met its
burden to establish this court’s jurisdiction over the injunctive relief requested in
3
Count II of the complaint, Count II must be dismissed. Alder Terrace, 161 F.3d at
1377.
B. Misappropriation of Trade Secret (Count III)
Count III of the complaint asserts that the Defend Trade Secrets Act of
2016 (DTSA), 18 U.S.C.A. § 1836(b) (West Supp. 2018), provides a remedy for
plaintiff in this court for the misappropriation of plaintiff’s trade secret. ECF No.
4 at 12-13. The DTSA indicates that the district courts, not this court, possess
jurisdiction to hear such claims. 18 U.S.C.A. § 1836(c) (West Supp. 2018). The
court finds that plaintiff has not established jurisdiction for the claim brought in
Count III of the complaint. Accordingly, Count III must be dismissed.
C. Copyright Infringement (Count I)
The court turns to defendant’s challenge to plaintiff’s sole remaining claim,
Count I of the complaint, the claim for copyright infringement by the United
States. Defendant asserts that this claim is barred by 28 U.S.C. § 1500 because
plaintiff filed two suits in federal district courts on the same day that he filed the
subject matter in this court.
1. Section 1500 and Relevant Precedent
The jurisdictional bar relied upon by defendant is as follows:
The United States Court of Federal Claims shall not have jurisdiction of any
claim for or in respect to which the plaintiff or his assignee has pending in
any other court any suit or process against the United States or any person
who, at the time when the cause of action alleged in such suit or process
arose, was, in respect thereto, acting or professing to act, directly or indirectly
under the authority of the United States.
28 U.S.C. § 1500. The test which identifies a pair of claims that triggers the bar—
one pending in a district court, another filed in this court—is provided by the
Supreme Court of the United States:
Two suits are for or in respect to the same claim, precluding
jurisdiction in the CFC, if they are based on substantially the same
operative facts, regardless of the relief sought in each suit.
United States v. Tohono O’Odham Nation, 563 U.S. 307, 317 (2011) (Tohono).
4
The United States Court of Appeals for the Federal Circuit has distilled the
§ 1500 inquiry into two essential steps:
To determine whether § 1500 applies, a court must make two
inquiries: (1) whether there is an earlier-filed suit or process pending
in another court, and, if so, (2) whether the claims asserted in the
earlier-filed case are for or in respect to the same claim(s) asserted in
the later-filed Court of Federal Claims action.
Brandt v. United States, 710 F.3d 1369, 1374 (Fed. Cir. 2013) (internal quotations
and citations omitted). Where, as here, the plaintiff does not dispute that the
district court suits were pending when the complaint in this court was filed, see
ECF No. 9 at 3, it is only the second element of the Brandt test that must be
determined by the court. 4 E.g., Res. Investments, Inc. v. United States, 785 F.3d
660, 664 (Fed. Cir. 2015) (Resource Investments). The second element of the
Brandt test focuses on whether the district court complaint and the complaint here
contain “a substantial overlap of operative facts that implicates the § 1500 bar.”
Cent. Pines Land Co. v. United States, 697 F.3d 1360, 1365 (Fed. Cir. 2012)
(Central Pines) (citations omitted).
Neither party attempts to apply the precedential Federal Circuit decision
most on point, Trusted Integration, Inc. v. United States, 659 F.3d 1159 (Fed. Cir.
2011), to the “overlap of operative facts” question here. The Trusted Integration
decision is not easy to summarize, but in general, the Federal Circuit examined the
contractual agreements that gave rise to the breach claims in each suit, the actions
and conduct that were relevant to the claims in each suit, and the evidence that
would be “legally operative” to prove the claims in each suit. Id. at 1167-68. The
Federal Circuit acknowledged that parsing the complaints to determine whether
there was a sufficient overlap of operative facts was “a close question” in that
case. Id. at 1167. With this precedential guidance in mind, the court turns to the
4
Defendant cites Passamaquoddy Tribe v. United States, 82 Fed. Cl. 256,
271-72 (2008), aff’d, 426 F. App’x 916 (Fed. Cir. 2011), for a rule that district
court suits filed on the same day as a suit in this court are per se pending for the
purposes of § 1500. ECF No. 8 at 4-5. It should be noted that there are decisions
of this court which disagree with the per se rule stated in Passamaquoddy. E.g.,
Nez Perce Tribe v. United States, 83 Fed. Cl. 186, 191-92 & nn.6-7 (2008);
Breneman v. United States, 57 Fed. Cl. 571, 577 (2003), aff’d, 97 F. App’x 329
(Fed. Cir. 2004). The court need not reach the first element of the Brandt test,
however, because the second element of the Brandt test is dispositive in this
dispute.
5
complaint filed by Mr. Zaccari in this court and the complaints he filed in the
district courts.
2. Copyright Claims Against the Defendants Named in Each
Suit
In this suit, the only defendant is the United States, and the only claim that
has not been dismissed is one for copyright infringement by the United States. 5
ECF No. 4 at 2, 10. The jurisdictional basis for this claim is 28 U.S.C. § 1498(b).
Id. at 2. The factual allegations in the complaint that are pertinent to the copyright
infringement claim focus on the actions of DCMA, primarily, with a secondary
focus on Apprio and DT. Id. at 1-10. The allegations of fact pertinent to
copyright infringement are summarized in this sentence: “Zaccari has been
damaged by DCMA’s willful, direct and indirect infringement of his CRR
Software as alleged above and is entitled to recover for such infringement pursuant
to 28 U.S.C. § 1498(b).” Id. at 10.
For the United States District Court for the District of Columbia suit
(Apprio suit), the only defendant is Apprio. ECF No. 8-1 at 15. Among the four
counts in the complaint is a claim for copyright infringement, found in Count II.
Id. at 24-26. The jurisdictional foundation for the copyright claim against Apprio
is 28 U.S.C. § 1338(a) (2012). Id. at 16. Although many of the facts alleged in
the Apprio suit are identical to those alleged in the complaint in this court, a
specific allegation is provided in support of the copyright infringement claim
against Apprio:
Apprio had knowledge of the direct infringement by DCMA
and DT, and induced, caused, or materially contributed to the
infringement by forcing Zaccari to give his CRR Software to DCMA,
and failing to assist Zaccari with preventing the continued
infringement.
Id. at 26.
For the United States District Court for the Eastern District of Virginia suit
(DT suit), the only defendant is DT. ECF No. 8-1 at 2. Among the three counts in
the complaint is a claim for copyright infringement, found in Count I. Id. at
10-11. The jurisdictional foundation for the copyright claim against DT is 28
U.S.C. § 1338(a). Id. at 3. Although many of the facts alleged in the DT suit are
5
Thus, the only remaining dispute for the court to resolve is whether the
copyright infringement claim in Count I of the complaint is barred by § 1500.
6
identical to those alleged in the complaint in this court, two specific allegations are
provided in support of the copyright infringement claim against DT:
DCMA and DT willfully directly infringed Zaccari’s exclusive
rights in and to his CRR Software under the Copyright Act, 17 U.S.C.
§ 106, by copying, installing, and using it, and derivative works
thereof, without Zaccari’s authorization or license.
[And,] DT had knowledge of the direct infringement by
DCMA, and induced, caused, or materially contributed to the
infringement by participating in the testing, implementation, further
development, or use of either Zaccari’s CRR Software or any
derivative work thereof.
Id. at 11. Although the copyright infringement claim against DT was later
dismissed by the district court, Zaccari v. Discover Techs. LLC, No. 3:18-CV-
453-HEH, 2018 WL 6834362, at *5 (E.D. Va. Dec. 28, 2018), that fact is
irrelevant to the § 1500 analysis, see Trusted Integration, 659 F.3d at 1166 n.2
(“We hold that the fact that the district court dismissed some of the counts of
Trusted Integration’s district court complaint has no effect on our analysis of each
of the counts of the CFC complaint.”).
3. Insufficient Overlap of Operative Facts to Trigger § 1500
a. The Parties’ Arguments as to Operative Facts
As noted earlier in this opinion, the parties have not attempted to apply the
holding of Trusted Integration, the precedential decision most on point, to the
circumstances here which might or might not trigger the jurisdictional bar in
§ 1500. For this reason, the court will not address, in any detail, the authorities
cited by the parties as to the operative facts in the district court complaints and the
complaint filed in this court. In this regard, the court notes that defendant
principally relies on a nonprecedential decision issued by the Federal Circuit
which contains an abbreviated analysis of the operative facts in two complaints—
that decision is of limited help here. See ECF No. 8 at 5 (citing Davis v. United
States, 642 F. App’x 982, 984-85 (Fed. Cir. 2016); ECF No. 14 at 3 (same).
Plaintiff, for his part, relies on a decision issued by this court before the
Supreme Court’s Tohono decision clarified the correct application of § 1500. See
ECF No. 9 at 4, 7-8 (citing d’Abrera v. United States, 78 Fed. Cl. 51, 58-59
(2007)). As defendant notes, the overarching § 1500 analysis in d’Abrera, issued
before Tohono, uses the wrong test. ECF No. 14 at 3 & n.2. Not all of d’Abrera
can be rejected out of hand, however, because this court, when analyzing the
operative facts for claims which possibly might trigger § 1500, correctly focused
7
on the different types of conduct that were legally operative to support each type
of claim. See 78 Fed. Cl. at 58 (“In short, plaintiffs’ now-dismissed [false
designation of origin] claim involved different conduct and was therefore not the
‘same claim’ as their copyright infringement claim . . . .”). This portion of the
analysis in d’Abrera is consistent with the approach taken in Trusted Integration. 6
Plaintiff also relies heavily on Boyle v. United States, 200 F.3d 1369 (Fed.
Cir. 2000) (Boyle II). See ECF No. 9 at 3-4, 7 (citing Boyle II, 200 F.3d at
1372-73). Although Boyle II discusses the meaning of § 1498(b), Boyle II does
not address the jurisdictional bar of § 1500. Defendant does not discuss Boyle II.
The court does not find Boyle II to be instructive in this dispute.
b. The Operative Facts Analysis Required by Trusted
Integration
The court notes, at the outset, that much of the jurisprudence discussing
§ 1500 addresses complaints which are brought in two courts by the plaintiff, and
in which the United States is named, or its officers are named, as a defendant or
defendants in the two suits. E.g., Tohono, 563 U.S. at 309; Resource Investments,
785 F.3d at 663; Central Pines, 697 F.3d at 1362; Trusted Integration, 659 F.3d at
1162. It is thus somewhat unusual that a suit in a district court brought against a
business entity, such as a corporation or a limited liability company, would be
identified as the trigger for a § 1500 challenge. The court notes that defendant has
failed to cite to even one case where a suit brought solely against a private party
was held to trigger the jurisdictional bar found in § 1500.
Defendant’s motion to dismiss could be read as an attempt to extend the
reach of § 1500 so that it applies where the United States should have been named
as a defendant in the district court but was not. To be sure, defendant relies,
instead, on language in § 1500 which includes not just claims against the United
States, but claims against “any person who, at the time when the cause of action
alleged in such suit or process arose, was, in respect thereto, acting or professing
to act, directly or indirectly under the authority of the United States.” 28 U.S.C.
§ 1500. As defendant notes in its reply brief, the “under the authority of the
United States” statement in § 1500, as this term is applied to government
contractors, could be read to require an “in-depth legal analysis of . . . whether the
6
Decisions of the United States Court of Federal Claims do not bind the
court in this matter but may provide persuasive authority. See, e.g., W. Coast
Gen. Corp. v. Dalton, 39 F.3d 312, 315 (Fed. Cir. 1994) (“Court of Federal Claims
decisions, while persuasive, do not set binding precedent for separate and distinct
cases in that court.”) (citations omitted).
8
government contractor[s] at issue here were acting with authorization and consent”
of the United States. ECF No. 14 at 5. Defendant cites to no authority, other than
to the plain language of § 1500, for its contention that a suit against Apprio or DT
could bar a suit against the United States in this court.
The jurisdictional consideration which led to the filing of three suits on the
same day, plaintiff argues, is the fact that copyright infringement suits brought
under § 1498(b) only address government contractor conduct that was authorized
by the United States. ECF No. 9 at 3-8. It is helpful to look at patent infringement
claims cognizable under 28 U.S.C. § 1498(a) (2012), a closely related statutory
provision, to better understand the scope of § 1498(b). 7 See Boyle I, 44 Fed. Cl. at
62 & n.3 (noting the close relationship between the provisions and looking for
guidance in § 1498(a) caselaw) (citations omitted). If a private entity is sued for
patent infringement in a district court, but that infringement was authorized by and
for the United States, the district court suit will be dismissed because the claim
could only be brought in this court under § 1498(a). Advanced Software Design
Corp. v. Fed. Reserve Bank of St. Louis, 583 F.3d 1371, 1378-79 (Fed. Cir. 2009).
Thus, the operative facts for infringement claims against a private entity in the
district courts concern conduct unauthorized by the United States, whereas the
operative facts for infringement claims in this court concern conduct authorized by
the United States. See, e.g., Ensign-Bickford Aerospace & Def. Co. v. United
States, 118 Fed. Cl. 363, 369 & n.4 (2014) (noting that the party’s counterclaims
in the district court were crafted to only address a government subcontractor’s
conduct not authorized by the United States, so as to avoid dismissal of
infringement claims exclusively assigned to this court by § 1498(a)); see also
Nextec Applications, Inc. v. United States, 114 Fed. Cl. 532, 537-38 (2014)
(refusing to bar patent infringement claims against the United States under § 1500,
where, in the district court suit, all claims against the government contractor which
implicated liability on the part of the United States had been dismissed, pursuant
7
Two provisions of this statute are relevant here. First, “[w]henever an
invention described in and covered by a patent of the United States is used or
manufactured by or for the United States without license of the owner thereof or
lawful right to use or manufacture the same, the owner’s remedy shall be by action
against the United States in the United States Court of Federal Claims for the
recovery of his reasonable and entire compensation for such use and
manufacture.” 28 U.S.C. § 1498(a). Also, “[f]or the purposes of this section, the
use or manufacture of an invention described in and covered by a patent of the
United States by a contractor, a subcontractor, or any person, firm, or corporation
for the Government and with the authorization or consent of the Government, shall
be construed as use or manufacture for the United States.” Id.9
to § 1498(a), before the suit was filed in this court against the United States under
§ 1498(a)).
When the complaints in the Apprio suit and the DT suit are viewed in the
light of these authorities, there is a fundamental divide between the conduct which
would be legally operative to prevail on the copyright infringement claims in the
district courts, and the conduct which would support the copyright infringement
claim under § 1498(b) in this court. It may be that a great host of facts would be
exactly the same in all three suits, but the conduct necessary to prevail in the
district courts would be markedly different from the conduct at issue in this suit.
As the Federal Circuit noted in Trusted Integration, the operative facts in each suit
are those facts which are “legally operative for establishing” the claim. 659 F.3d
at 1168. Under this precedent, the copyright infringement claims in the Apprio
suit and the DT suit are not “based on substantially the same operative facts” as
the copyright infringement claim brought in this suit, and § 1500 does not bar
plaintiff’s claim for copyright infringement under § 1498(b). Tohono, 563 U.S. at
317.
IV. Conclusion
Counts II and III of plaintiff’s complaint must be dismissed for want of
subject matter jurisdiction. RCFC 12(h)(3). The copyright infringement claim
brought under 28 U.S.C. § 1498(b) in Count I of plaintiff’s complaint, however,
survives defendant’s challenge founded on 28 U.S.C. § 1500. The court notes that
defendant has requested that further litigation of Count I be stayed pending rulings
in the Apprio suit and related litigation. ECF No. 8 at 9-10. The court will permit
the parties an opportunity to confer as to the stay proposed by defendant, and to
report to the court their recommendations as to the next steps in this litigation.
Accordingly,
(1) Defendant’s motion to dismiss, ECF No. 8, is DENIED in part, as to
Count I of plaintiff’s complaint, and GRANTED in part, as to
Counts II and III of plaintiff’s complaint;
(2) Pursuant to RCFC 54(b), because there is no just reason for delay,
the clerk’s office is directed to ENTER final judgment
DISMISSING Count II and Count III of plaintiff’s complaint for
lack of subject-matter jurisdiction, without prejudice; and
(3) On or before April 26, 2019, the parties shall CONFER and FILE a
joint status report in this matter. The status report shall include the
parties’ positions on a stay in this matter pending the outcome of
10
related litigation in the district courts, and an agreed-upon schedule
for proposed further proceedings in this matter should the court
determine that a stay is not warranted.
IT IS SO ORDERED.
s/Patricia E. Campbell-Smith
PATRICIA E. CAMPBELL-SMITH
Judge
11