United States District Court, W.D. Louisiana, Monroe Division
MICHAEL L. MCGINLEY, ET AL.
LUV N CARE, LTD., ET AL.
L. HAYES JUDGE
RULING ON MOTION FOR SUMMARY JUDGMENT
A. DOUGHTY UNITED STATES DISTRICT JUDGE
before the Court is the Motion for Summary Judgment [Doc. No.
133] filed by Defendants Admar International, Inc.
(“Admar”); Bayou Graphics and Design, LLC
(“Bayou”); Control Services, Inc.
(“CS”); and HHHII, LLC (collectively
“Moving Defendants”). Plaintiffs Michael L.
McGinley and S C Products, Inc., (collectively
“Plaintiffs”) have filed an opposition [Doc. No.
142], and Moving Defendants have filed a Reply [Doc. No.
169]. The matter is fully briefed. The Court is now prepared
FACTUAL AND PROCEDURAL BACKGROUND
March 30, 2016, Plaintiffs filed a Complaint against
Defendant Luv N. Care, Ltd. (“LNC”), alleging
various patent infringement claims pertaining to its
“'178 Patent” for a flexible panel rinse cup
product [Doc. No. 1]. On July 27, 2018, Plaintiffs expanded
their claims with an Amended Complaint [Doc. No. 109], which
(1) included a claim pertaining to its ‘178 Patent for
indirect infringement against LNC; (2) added a number of
companies, including the Moving Defendants, that are
commonly-owned and controlled by LNC and its principals as
additional defendants; and (3) included a claim pertaining to
its ‘178 Patent of infringement against a new Defendant
BuyBabyDirect, LLC (“BBD”), and a separate,
equitable claim against LNC and all of the other Defendants
asserting that they constitute a “single business
enterprise, ” or alter egos, or joint venturers.
Plaintiffs contend that all Defendants are jointly and
severally liable to Plaintiffs for the unlawful acts of each
Defendants filed the pending Motion for Summary Judgment
[Doc. No. 133] contending that Plaintiffs have no evidentiary
basis for the claims against them. They assert they are not
involved in the manufacture, use, sale, or offer for sale
within the United States, or importation into the United
States of any rinse cup product related to the patent which
is the subject of this lawsuit. They further contend that
Admar is a holding company that merely owns certain
intellectual property that it licenses to other companies;
that BGD is a graphics company that provides graphics
services to co-defendant LNC; that BGD was formed after the
patent in this lawsuit issued and more than five years after
LNC introduced the accused product; that CS is a management
services company that provides management and other
operational services to LNC and its affiliated companies; and
that HHHII, LLC is an international IP licensing and
management company with no licensing activity in the United
Defendants assert that Plaintiffs cannot establish that any
of them have infringed or induced infringement of any of
Plaintiffs' alleged patent rights because none of them
make, use, sell, offer for sale, or import any products. They
further assert that they do not direct, control, supervise,
or influence LNC or its other licensees, or the products that
LNC and its other licensees make, use, sell, offer for sale,
or import. In support of their motion, they offer the
Declaration of Joseph Hakim, who is the President of LNC, and
who is also the President of all of the Moving Defendants.
Defendants further contend that Plaintiffs'
“single-business-enterprise” theory of liability
is not applicable to the facts of this case because
Plaintiffs have made no showing that LNC is incapable of
satisfying any judgment that could possibly be entered in
respond that the Moving Defendants have needlessly moved for
summary judgment on Plaintiffs' claims for the
infringement and induced infringement of the ‘178
Patent, because Plaintiffs have not asserted these claims
against any of the Moving Defendants. Plaintiffs have
asserted claims for direct infringement solely against LNC
and BBD, but not against any of the Moving Defendants.
Additionally, Plaintiffs have asserted a claim for induced
infringement against LNC, but not against any of the Moving
Defendants. Therefore, Plaintiffs contend Moving Defendants
are not entitled to summary judgment on claims which have not
been asserted against them.
Plaintiffs contend that Moving Defendants are mistaken in
their assertion that Plaintiffs'
single-business-enterprise claim is barred because LNC is not
insolvent. They contend that neither the insolvency of nor a
risk of collection from a defendant is an element to a
single-business-enterprise claim. Plaintiffs further assert
that in their Amended Complaint [Doc. No. 109, ¶¶
43-48] they alleged a series of detailed facts to show that
Defendants, including Moving Defendants, have operated as a
single business enterprise based on nearly all of the factors
that do apply when making such a claim.
Defendants, in their reply [Doc. No. 169), have apparently
dropped their contention that Plaintiffs'
single-business-enterprise claim fails because LNC is not
insolvent, but instead argue that it is not a claim upon
which relief may be granted, and, in any event, fails as a
matter of proof.
LAW AND ANALYSIS
Standard of Review
Federal Rule of Civil Procedure 56(a), “[a] party may
move for summary judgment, identifying each claim or
defense--or the part of each claim or defense--on which
summary judgment is sought. The court shall grant summary
judgment if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law.” The moving party bears
the initial burden of informing the court of the basis for
its motion by identifying portions of the record which
highlight the absence of genuine issues of material fact.
Topalian v. Ehrmann, 954 F.2d 1125, 1132 (5th Cir.
1992); see also Fed. R. Civ. P. 56(c)(1) (“A
party asserting that a fact cannot be . . . disputed must
support the assertion by . . . citing to particular parts of
materials in the record . . .). A fact is
“material” if proof of its existence or
nonexistence would affect the outcome of the lawsuit under