A federal judge from the Eastern District of Michigan has granted the a motion to dismiss filed by the NBA, Daktronics, Inc. and one of its executives against pro se litigant, who alleged that the defendants used his invention — “LED Lighted Backboard, and LED Mounted 24 Second Shot Clock, … assuring that the statutes of limitations would run before he filed suit.”
The court held specifically that the relevant issues had already been litigated, meaning the doctrine of res judicata applied to the current claim. Nevertheless, the court declined to preclude in advance, further litigation as the defendants requested.
Plaintiff Wendell Phillips alleged that around 1990, he invented “the LED Lighted Backboard and LED Mounted 24 Second Shot Clock,” and in 1996, he “acquired Exclusive patent rights to enhance the LED Rim with built-in LED Lights.” He further alleged that in 1997, he contacted and met with Daktronics Executive Vice President Frank Kurtenbach, where discussions were held regarding the production of plaintiff’s inventions.
“Also, the plaintiff alleged that Daktronics and the NBA intentionally prevented him from doing business or competing with them by implementing his inventions in a way that assured the statute of limitations would run before he could file suit,” wrote the court. “The plaintiff then alleged that the defendants intentionally misled him by making promises to contract.”
Initially, the plaintiff sued Daktronics in October 2007, premised on diversity, claiming breach of oral contract, breach of implied contract, breach of fiduciary duty, unjust enrichment, fraud, fraud in the inducement, constructive fraud, and negligent misrepresentation. “The allegations were based on the same inventions that are the subject of the suit at hand with plaintiff believing that Daktronics developed his invention independent of a relationship with him, according to the court. “On February 5, 2008, this court ruled that plaintiff’s claims were time-barred, granting Daktronics’s motion to dismiss, and entering a judgment in favor of Daktronics.”
The court wrote that the “facts alleged by plaintiff in this suit are substantially identical to the alleged facts supporting his 2007 case. Here, he the plaintiff makes federal question claims under the Lanham Act and Sherman Antitrust Act for Conspiracy to Violate the Anti-trusts [sic.] Laws Refusal Deal, Tortious [sic.] Interfernce [sic.] with Contractual relations, Misapropriation [sic.] of Trade Secrets and Private Information, Trade Dress Infringement, False Advertising, Intentional Infliction of Emtional [sic.] Distress, and Vicarious Liability, while adding the NBA and Daktronics’s vice president, Kurtenbach, as defendants alongside Daktronics.”
In examining the defendants’ motion to dismiss, the court first looked at the argument based on Res Judicata.
“It is clear that the plaintiff’s 2007 case was decided on the merits when this court entered judgment in favor of Daktronics. Thus, the questions that remain are (1) whether res judicata can apply to the NBA and Kurtenbach, defendants who were not named in the prior action, and (2) whether the claims made in the instant action were or could have been raised in the prior action.”
Ruling in the affirmative on the first point, the court noted that res judicata applies where “a stranger to a first action is so closely and materially related to the named defendant.” Platsis v. E.F. Hutton & Co., et. al., 1988 U.S. Dist. LEXIS 18091 at *7 (W.D. Mich. June 20, 1988).
It The court added that “because the plaintiff knew at the time of the prior action that the NBA used his alleged inventions and Kurtenbach was an agent of Daktronics, (he) could have included them in his original suit, and adding them as defendants here repeats prior litigation; therefore res judicata applies to all defendants in this case.”
Turning to the second question, the court noted that the plaintiff had sued the Lansing School District in state court, prior to the instant suit. After losing in the trial court, plaintiff appealed unsuccessfully to the Michigan Court of Appeals and to the Michigan Supreme Court. He then brought an action in federal court, where a judge dismissed his action and denied his motion for reconsideration. That court applied the doctrine of res judicata, holding that Phillips’ federal claims arose from the same factual allegations presented in state court.
“This present action appears to follow the same track that the plaintiff followed in his suit against the Lansing School District,” wrote the court. “Just as in his motion for reconsideration in that litigation, the factual allegations made here repeat the factual allegations of his 2007 case. The only differences between the plaintiff’s 2007 and 2010 complaints exist where he adds, or changes, specific dates and details. Because the plaintiff could have raised the claims in this action when he filed suit in 2007, and because the factual allegations are nearly identical, res judicata applies.”
As for whether the plaintiff should be enjoined from further litigation, the court agreed that the defendants “certainly have grounds to argue that, based on plaintiff’s behavior in past litigation, and the admonishment that he received the first time he brought claims against Daktronics, (that he) should be enjoined from future litigation related to this matter.
“However, greater latitude is given to pro se litigants by courts, and the court cannot rule out the possibility that a colorable claim related to this case may be found. Therefore, this court is not prepared to employ such a drastic measure as to enjoin the plaintiff in this matter.”
Wendell Phillips v. National Basketball Association, Daktronics, INC., & Frank Kurtenbach; E.D.Mich.; Case No. 2:10-CV-14734, 2011 U.S. Dist. LEXIS 81455; 7/26/11.
Attorneys of Record: Wendell W Phillips, Plaintiff, Pro se, Lansing, MI. (for defendants) Leo J. Gibson, Barris, Sott, Detroit, MI.
