Federal Circuit Affirms Dismissal For Failure To Comply With Discovery Order And Under Kessler Doctrine
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  • Federal Circuit Affirms Dismissal For Failure To Comply With Discovery Order And Under Kessler Doctrine

    On June 21, 2023, the Court of Appeals for the Federal Circuit (CAFC) affirmed a decision of the United States District Court for the Middle District of Florida in Case No. 6:21-cv-01366-PGB-DCI, Judge Paul G. Byron, dismissing plaintiff’s patent infringement suit.  Yoldas Askan v. Faro Techs., Inc.,__F.3d__(Fed. Cir. June 21, 2023).  In its order, the CAFC held that the district court did not abuse its discretion in dismissing the case as a sanction for plaintiff’s failure to comply with a discovery order and as precluded under the Kessler doctrine, under which “an adjudged non-infringer” can “avoid repeated harassment for continuing its business as usual post-final judgment in a patent action where circumstances justify that result.”

    In April 2021, plaintiff patentee filed a complaint in the United States District Court for the Eastern District of Pennsylvania, alleging that defendant’s scanner product and software infringed certain claims of plaintiff’s patents.  The district court transferred the case to the Middle District of Florida under 28 U.S.C. § 1404(a), where plaintiff had brought an earlier suit alleging that defendant’s scanner product (but not software) infringed the same claims asserted in the new suit.  The earlier suit was dismissed because of plaintiff’s behavior during discovery.

    After the transfer, defendant served requests for production (“RFPs”) on plaintiff.  Later that same day, plaintiff served RFPs requesting identical documents from defendant.  Plaintiff subsequently objected to each of defendant’s RFPs with the assertion that because plaintiff requested the same documents from defendant, any production by defendant satisfied plaintiff’s duty to produce.
    Finding plaintiff’s responses deficient and objections waived, the magistrate judge ordered plaintiff to respond to defendant’s RFPs by May 25, 2022.  After this deadline had passed, plaintiff responded by again requesting production of the same documents requested by defendant, again failing to produce any documents, and again asserting the same general objection to each RFP.
    Defendant moved for Rule 37 sanctions, seeking dismissal of plaintiff’s complaint with prejudice.  Separately, defendant requested dismissal under the Kessler doctrine.  The district court granted dismissal on both grounds.  Plaintiff appealed.

    The CAFC first analyzed the district court’s dismissal under Rule 37, which, inter alia, authorizes a district court to dismiss an action or proceeding against a party that disobeys a discovery order.  Governing Eleventh Circuit law finds such sanctions appropriate “only if noncompliance with discovery orders is due to willful or bad faith disregard for those orders,” such that “the party’s conduct amounts to flagrant disregard and willful disobedience of discovery orders.”  The CAFC concluded that the district court had not abused its discretion in holding that plaintiff’s failure to produce documents, plaintiff’s disregard for the magistrate judge’s order to produce documents, and plaintiff’s related non-compliance in its prior litigation met this “bad faith” and “flagrant disregard and willful disobedience” standard.

    Plaintiff had contended that he served the identical RFPs on defendant to “get [defendant] to participate in the discovery process” after defendant allegedly ignored plaintiff’s emails and communications informally requesting information.  The CAFC dismissed this argument because defendant had complied with the court-ordered discovery process.  The CAFC also rejected plaintiff’s argument that he had produced the requested documents in the prior litigation, because the prior production did not excuse non-compliance in the latter litigation and, additionally, because the prior production had been ruled deficient.

    The CAFC also affirmed dismissal under the Kessler doctrine.  In reaching this decision, the CAFC found that dismissal with prejudice of plaintiff’s prior complaint had a preclusive effect under the Kessler doctrine even though the prior litigation did not reach the issue of infringement.  The CAFC explained that with-prejudice dismissal operates as an adjudication on the merits for claim preclusion purposes, and therefore operates as an adjudication of non-liability for infringement for purposes of invoking the Kessler doctrine.

    The CAFC further found that plaintiff had failed to raise a genuine issue of material fact that the scanner products in the prior litigation and the latter litigation were not essentially the same.  Plaintiff had additionally asserted that the district court failed to consider that the second litigation involves an additional software product, ostensibly suggesting that any preclusive effect of the prior litigation therefore does not extend to the latter litigation.  But plaintiff did not raise this argument before the district court.  Accordingly, the CAFC ruled that it was forfeited.

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