IN RE: Sundstrand Data Control, Inc., Patent Litigation

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BEFORE THE JUDICIAL PANEL xd le :
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OPINION AND ORDER .
BEFORE JOHN MINOR WISDOM, CHAIRMAN, AND EDWARD WEINFELD, :
EDWIN A. ROBSON, JOSEPH S. LORD, III*, STANLEY A. WEIGEL,
ANDREW A. CAFFREY AND ROY W. HARPER, JUDGES OF THE PANEL
PER CURIAM 5 FER
This litigation consists of five actions pending in So
four federal districts: American and Litton, which have been
consolidated in the Northern District of Oklahoma, and one
action each in the Southern District of Florida, the Northern .
District of Illinois and the Northern District of Iowa. oo :
sundstrand Data Control, Inc. (SDC) is a party in all
actions, and its parent is also a party in scme of the actions.
At issue in the five actions is the validity of certain SDC LT _
patents on components of a ground proximity warning system. The I
system gives audible warnings to the crew of an aircraft with
respect to certain predetermined and potentially hazardous relation- oo To
ships between the aircraft and the ground. The same eight patents : ns
* Judge Lord took no part in the decision of this matter.

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@® are involved in the Florida, Illinois and Iowa actions.
Seven of those eight patents are also involved in American.
The complaint in Litton questions the validity of fourteen
patents, seven of which are also challenged in the
Florida, Illinois and Iowa actions, and six of which are
involved in American.
American and the Florida and Illinois actions were
each filed on November 11, 1976, by SDC against manufacturers
of competing ground proximity warning systems and/or
airline users of competing systems. SDC alleges patent
® infringement in each complaint, and seeks damages andinjunctive relief.
Defendants in their answers in the Illinois action have
denied patent infringement and have asserted the affirmative
defenses of invalidity and unenforceability of the patents,
inequitable conduct by SDC in willfully withholding from the
Patent Office information relevant to patentability, and
patent misuse by violating the antitrust laws in the market
for ground proximity warning systems. Further, defendants
allege that in 1974-75, SDC failed to disclose to the
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® Federal Aviation Administration (FAA) that SDC hadfiled or intended to file patent applications relating .
to ground proximity warning systems and that, by so
doing, SDC misled the FAA to enact regulations requiring
the use of ground proximity warning systems on commercial
aircraft. Defendants allege that the FAA would otherwise
not have enacted those regulations because of a policy
against forcing airlines to purchase equipment from a
single supplier. As a result of this conduct, defendants
charge, SDC is now estopped from claiming patent infringement.
Defendants make similar allegations by affirmative defense
o and/or counterclaim in American and in the Floridaaction.
Litton was commenced on December 3, 1976, by a manufacturer
of a ground proximity warning system that was sold to the defendant
in American. The plaintiff in Litton seeks declaratory relief
against SDC, alleging the unenforceability and invalidity of,
and plaintiff's non-infringement upon, SDC's patents. Plaintiff
charges SDC with violations of the federal antitrust laws
by monopolizing and attempting to monopolize ground proximity
warning systems for commercial aircraft. Plaintiff also accuses
SDC of unfair competition with respect to the systems. Finally,
C plaintiff raises estoppel arguments similar to those raised

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® by defendants in the Illinois action relating to SDC'sconduct before the FAA.
The Iowa action was brought against SDC on June 27, 1977,
by a manufacturer of ground proximity warning systems and by
the defendants in the Illinois action. Plaintiffs' complaint
is substantially similar to the affirmative defenses Co
raised in the Illinois action.
Pursuant to 28 U.S.C. §1407(c)	(i) and Rule 8, R.P.J.P.M.L.,
65 F.R.D. 253, 258-59 (1975), the Panel issuad an ordsr to
show cause why these five actions should not be transfsrrad
to a single district for coordinated or consolidated pretrial
x/
o proceedings. All parties favor transfer under Section 1407,
and the only disagreement centers on the selection of the
transferee forum. SDC and its parent favor the Southern
District of Florida, while all remaining parties favor transfer
of at least part of all the actions to the Western District
of Washington.
1l/ Certain parties moved the Panel to include in the
centralized pretrial proceedings a sixth action, then
pending in the Western District of Washington, but that
action was remanded to Washington state court prior
to the hearing on this matter.

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We find that these actions involve common questions
® of fact and that their transfer to the Western District
of Washington under Section 1407 for coordinated or
consolidated pretrial proceedings will best serve the
convenience of the parties and witnesses and promote the
just and efficient conduct of the litigation.
All parties recognize, and we agree, that this litigation
involves common factual questions regarding the validity of
several SDC patents, and that transfer is therefore necessary
in order to eliminate duplicative discovery, pravent inconsistent
pretrial rulings and otherwise conserve time and effort for the
@: the witnesses and the judiciary. See In re FMC CorporationPatent Litigation, 422 F. Supp. 1163, 1165 (J.P.M.L. 1976).
| SDC and its parent, in opposing transfer to the Western
District of Washington, rely on the Panel's traditional
reluctance to transfer a group of actions to a forum in
which no related action is pending. These parties argue that
judicial manpower would be wasted if the transferee judge's
expertise gained in conducting pretrial activities could
not be put to use in the trial of at least one of the
actions. SDC and its parent contend that discovery will
occur in many places cther than the Western District
@-: Washington, and that the civil caseload in that
. district is much heavier than in other potential transferee

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forums. Ir. support of tne Southern District of
® Florida as the transferee forum, SDC and its parent
maintain that the civil caseload is lighter in that
district than in any other district in which an action
is pending. These parties also contend that pretrial in
the Southern District of Florida is slightly ahead of
pretrial in any other district and that transfer there would
enhance the likelihcod of bringing all the actions quickly
to trial. Should the Panel conclude that transfer to the
Southern District of Florida is inappropriate, SDC and its
parent alternatively urge the Northern District of Illinois
® as the transferee forum because of its central location,because SDC's parent is headquartered in that district and
because all defendant airlines do business there.
We find these arguments unpersuasive. While it is true
that we have been reluctant to select as a transferee forum
a district in which no related action is pending, see, £.9.,
In re Air Crash Disaster Near Papeete, Tahiti, 397 F. Supp.
886, 887 (J.P.M.L. 1975), the source of our traditional
restraint has not been jurisdictional. We have emphasized
that under appropriate circumstances we would order transfer
of a group of actions to a district in which none of the
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constituent actions is pending, see In re Cement and Concrete
@® Industry Antitrust Litigation, 437 F. Supp. 750, 733 (J.P.M.L.
1977), and we conclude that such circumstances are present
in the litigation now before us.
None of the districts in which actions are pending offers
a strong nexus to the common factual questions in this litigation,
and little discovery on those issues could be expected to
occur in any of them. Nor, by counsel for SDC's admission
at the hearing on this matter, could pretrial proceedings
be characterized as significantly further advanced in any
one particular district. Transcript at 8. The Western District
C of Washington, however, has a substantial connection to thecommon factual questions raised in the litigation. SDC's
principal place of business is located in that district, and
it is undisputed that many of the ground proximity warning
system's chief inventors reside there. Additionally, it
appears that records relating to flight tests of SDC's
| ground proximity warning system are located at the FAA's
regional office in Seattle. All parties also agree that
discovery regarding the development of the ground proximity
warning system will be taken from the Boeing Company, an
®

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® aircraft concern which is headquartered in the Western
District of Washington, as well as from SDC. Thus, we |
are persuaded that most of the relevant documents and
witnesses on the central issue of the validity of SDC's
patents are located in the vicinity of that district.
Moreover, several parties represent that significant common
discovery on antitrust issues involved	in this litigation will also
focus on SDC documents and employees found in the Seattle
area. Finally, since certain parties maintain that the
action now pending in Washington state court is related to
the federal actions, that action could, if appropriate, be
®-..... with the federal actions. This possibility
of promoting state/federal coordination is another factor
favoring the selection of the Western District of Washington.
See In re Bomb Disaster at Roseville, California, on April 28,
1973, 399 F. Supp. 1400, 1403 (J.P.M.L. 1975).
Some of the parties favoring transfer to the Western
District of Washington contend that the possibility of trade
secret disclosure and other burdens on the parties in
connection with discovery on non-common issues 1s so great
as to warrant suspension of that discovery until the actions
are remanded to their transferor districts. These parties urge
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® the Panel to impose such a limitation in its transfer order.
Similarly, defendants in the Florida action have requested
that the Panel confine Section 1407 proceedings in the
Western District of Washington to issues which would involve
documentary or depositional discovery in the Seattle area.
These requests are misdirected, for the Panel has neither
the power nor the inclination to dictate in any way the
manner in which the coordinated or consolidated pretrial
proceedings are to be conducted by the transferee judge. The
scope of those proceedings, including the extent to which discovery
is permitted, is a matter exclusively within the control of
o the transferee judge. See In re Plumbing Fixtures Litigation,
298 F. Supp. 484, 489 (J.P.M.L. 1968).
IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C.
§1407, the actions listed on the following Schedule A be,
and the same hereby are, transferred to the Western District
of Washington and, with the consent of that court, assigned
to the Honorable James M. Fitzgerald, sitting by designation
pursuant to 28 U.S.C. §292(b), for coordinated or consolidated
pretrial proceedings.
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Schedule A -- Docket No. 317
® SOUTHERN DISTRICT OF FLORIDA Civil Action No.
Sundstrand Data Control, Inc. Vv. 76-6485-CIV~JE
The Bendix Corp., et al.
NORTHERN DISTRICT OF ILLINOIS
Sundstrand Data Control, Inc. Vv. 76C4123
Allegheny Airlines, Inc., et al.
NORTHERN DISTRICT OF IOWA
Rockwell International Corp., et al. C77-44
v. Sundstrand Data Control, Inc.
NORTHERN DISTRICT OF OKLAHOMA
Ssundstrand Data Control, Inc. V. 76-C-564-C
American Airlines, Inc., et al.
Litton Systems, Inc. Vv. Sundstrand 77-C-134-C
Data Control, Inc.