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SD3 II LLC v. Black & Decker (U.S.) Inc.

United States Court of Appeals, Fourth Circuit

April 19, 2018

SD3 II LLC, a Delaware limited liability company, Plaintiff - Appellant,
v.
BLACK & DECKER (U.S.) INCORPORATED; BLACK & DECKER CORPORATION; MILWAUKEE ELECTRIC TOOL CORPORATION; ONE WORLD TECHNOLOGIES, INCORPORATED; ROBERT BOSCH TOOL CORPORATION; RYOBI TECHNOLOGIES, INCORPORATED, Defendants - Appellees, and DEWALT INDUSTRIAL TOOLS; EMERSON ELECTRIC COMPANY; HITACHI KOKI USA LTD.; PENTAIR CORPORATION; PORTER-CABLE CORPORATION; SKIL POWER TOOLS; PENTAIR WATER GROUP, INCORPORATED; PENTAIR, INCORPORATED; CHANG TYPE INDUSTRIAL CO., LTD.; DELTA POWER EQUIPMENT CORPORATION; HITACHI KOKI CO., LTD.; MAKITA CORPORATION; MAKITA USA, INCORPORATED; OWT INDUSTRIES, INCORPORATED; ROBERT BOSCH GMBH; STANLEY BLACK & DECKER, INCORPORATED; TECHTRONICS INDUSTRIES CO., LTD.; TECHTRONIC INDUSTRIES NORTH AMERICA, INCORPORATED; EMERSON ELECTRIC COMPANY, Defendants. SD3 II, LLC, a Delaware limited liability company, Plaintiff - Appellee,
v.
BLACK & DECKER (U.S.) INCORPORATED; BLACK & DECKER CORPORATION; MILWAUKEE ELECTRIC TOOL CORPORATION; ONE WORLD TECHNOLOGIES, INCORPORATED; RYOBI TECHNOLOGIES, INCORPORATED; ROBERT BOSCH TOOL CORPORATION, Defendants - Appellants, and CHANG TYPE INDUSTRIAL CO., LTD.; DELTA POWER EQUIPMENT CORPORATION; DEWALT INDUSTRIAL TOOLS; EMERSON ELECTRIC COMPANY; HITACHI KOKI CO., LTD.; HITACHI KOKI USA LTD.; MAKITA CORPORATION; MAKITA USA, INCORPORATED; OWT INDUSTRIES, INCORPORATED; PENTAIR CORPORATION; PORTER-CABLE CORPORATION; ROBERT BOSCH GMBH; SKIL POWER TOOLS; STANLEY BLACK & DECKER, INCORPORATED; TECHTRONICS INDUSTRIES CO., LTD.; TECHTRONIC INDUSTRIES NORTH AMERICA, INCORPORATED; PENTAIR WATER GROUP, INCORPORATED; EMERSON ELECTRIC COMPANY; PENTAIR, INCORPORATED, Defendants.

          Argued: January 23, 2018

          Appeals from the United States District Court for the Eastern District of Virginia, at Alexandria. Claude M. Hilton, Senior District Judge. (1:14-cv-00191-CMH-IDD)

         ARGUED:

          Derek L. Shaffer, QUINN EMANUEL URQUHART & SULLIVAN, LLP, Washington, D.C., for Appellants/Cross-Appellees.

          John David Harkrider, AXINN, VELTROP & HARKRIDER LLP, New York, New York, for Appellees/Cross-Appellants.

         ON BRIEF:

          Paul F. Brinkman, Ethan C. Glass, Jonathan G. Cooper, QUINN EMANUEL URQUHART & SULLIVAN, LLP, Washington, D.C., for Appellants/Cross-Appellees. Jonathan S. Franklin, David M. Foster, Washington, D.C., Layne E. Kruse, Eliot Fielding Turner, NORTON ROSE FULBRIGHT U.S. LLP, Houston, Texas, for Appellee/Cross-Appellant Robert Bosch Tool Corporation. Richard B. Dagen, Washington, D.C., John M. Tanski, AXINN, VELTROP & HARKRIDER LLP, Hartford, Connecticut, for Appellees/Cross-Appellants

          Black & Decker (U.S.) Inc. and The Black and Decker Corporation. Scott W. Hansen, Laura A. Brenner, James N. Law, REINHART, BOERNER VAN DUREN S.C., Milwaukee, Wisconsin; James G. Kress, Paul C. Cuomo, BAKER BOTTS LLP, Washington, D.C., for Appellees/Cross-Appellants.

          Before WILKINSON, AGEE, and WYNN, Circuit Judges.

          AGEE, CIRCUIT JUDGE.

         In February 2014, SD3, LLC, and its subsidiary, SawStop LLC (collectively, "SawStop"), filed an antitrust suit against a group of Table Saw Manufacturers.[1] SawStop alleged that the Table Saw Manufacturers had colluded in contravention of antitrust laws to exclude its proprietary technology from the market. The acts and economic harm upon which SawStop's claims are based occurred by 2002. Under the general rules for claims accrual and limitations, SawStop's antitrust claims expired four years later, in 2006. See 15 U.S.C. § 15b (establishing a four-year limitations period for antitrust claims); Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338 (1971) ("Generally, [an antitrust] cause of action accrues and the statute [of limitations] begins to run when a defendant commits an act that injures a plaintiff's business.").

         Nevertheless, SawStop contended that its suit was timely under the equitable doctrine of fraudulent concealment. That doctrine is "read into every federal statute of limitation[s]" and, in cases where the harm is concealed from the plaintiff, starts the limitations period "when the wrong [i]s discovered." GO Comput., Inc. v. Microsoft Corp., 508 F.3d 170, 177-78 (4th Cir. 2007) (internal quotation marks omitted). According to SawStop, the earliest it could have discovered the Table Saw Manufacturers' collusion was February 2010, thereby making its 2014 suit timely.

         The district court disagreed and granted summary judgment to the Table Saw Manufacturers based on the bar of the statute of limitations. The district court found that SawStop knew sufficient facts to identify its injury, as well as the identities of those who had injured it, in 2002. On appeal, SawStop asks us to revive its claim. Like the district court, though, we conclude that SawStop's suit was untimely because SawStop was on actual notice of its claim by, at latest, 2003. Accordingly, the statute of limitations expired no later than 2007.[2] We therefore affirm the judgment of the district court.

         I.

         A.

         Because this appeal follows the district court's grant of the Table Saw Manufacturers' motion for summary judgment, we recount the facts below in the light most favorable to SawStop, the non-moving party. Williams v. Staples, Inc., 372 F.3d 662, 667 (4th Cir. 2004) (observing that on a motion for summary judgment, "the court must draw all reasonable inferences in favor of the nonmoving party"). For purposes of our factual recitation, we assume familiarity with the background set out in our prior opinion, SD3, LLC v. Black & Decker (U.S.), Inc., 801 F.3d 412 (4th Cir. 2015), and recount below a subset of those facts which are relevant to the issues on appeal.

         1.

         Dr. Stephen Gass, a patent lawyer by trade, invented Active Injury Mitigation Technology ("AIMT") in 1999, and formed SawStop the next year to market AIMT to the table saw industry, including the Table Saw Manufacturers.

         Shortly after SawStop debuted AIMT in August 2000, it began licensing discussions with each of the Table Saw Manufacturers, or their predecessors. By mid-2001, each of the Table Saw Manufacturers had expressed interest in licensing AIMT for use on some of their saws. By January 2002, SawStop and Ryobi had entered into a preliminary licensing agreement to allow Ryobi's use of AIMT on some of its table saws. Similar licensing agreements between SawStop and Black & Decker or SawStop and Bosch were in process. Despite these initial signs of success, SawStop's negotiations with each Table Saw Manufacturer quickly collapsed. By June 2002, each Table Saw Manufacturer had walked away from the negotiating table, some for seemingly inconsequential reasons.

         2.

         Despite early, promising negotiations, SawStop's relationship with the Table Saw Manufacturers soon became adversarial. For example, in October 2000, a Black & Decker official warned Dr. Gass that, if SawStop went to the U.S. Consumer Product Safety Commission-a government agency that acts as an industry-wide, standard-setting body-in an effort to mandate AIMT's inclusion on all table saws, the "industry would get together and squish" SawStop. J.A. 729. In November 2000, Dr. Gass demonstrated AIMT at a trade show at which the Table Saw Manufacturers were in attendance. Immediately following the demonstration, representatives from each of the Table Saw Manufacturers left the room for a private meeting. Dr. Gass later characterized the event by representing that the Table Saw Manufacturers' representatives "all got up and went in the other room to collude." J.A. 2159 (emphasis added).

         Dr. Gass and SawStop's vice president, David Fanning, who is also a patent attorney, encountered further hostility, or alleged collusion, toward AIMT in February 2001. While attending a meeting of the Defense Research Institute, they witnessed a presentation given by a Black & Decker representative, Daniel Lanier, which focused on "evidentiary issues raised by SawStop." J.A. 2209. Lanier "spoke about how products liability plaintiff's lawyers might try to get evidence of SawStop in and how defense lawyers might try [to] keep evidence of SawStop out in products liability cases." J.A. 2210. According to Fanning, the "takeaway from . . . Lanier's presentation was that if none of the manufacturers adopt something like [AIMT], then . . . [the industry could] argue that [AIMT] or something like it is not viable and [could] use as evidence the fact that nobody's adopted it." J.A. 2210. In Fanning's words, Lanier "clearly . . . communicated" in early 2001 that the industry should boycott AIMT. J.A. 2211.

         And indeed, SawStop's interactions with the Table Saw Manufacturers presaged a more formal industry-wide agreement to work against AIMT. This agreement was the product of a meeting between the Table Saw Manufacturers from which SawStop was excluded and the particulars of which SawStop learned only through discovery in this case. The meeting was conducted under the auspices of the Power Tool Institute ("PTI, " or the "Institute"), a lobbying organization that the Table Saw Manufacturers controlled in substantial part. Following a group vote at the Institute's 2001 annual meeting, PTI's membership agreed to pool their test data and to work together to create a finger-sensing technology to rival AIMT.

         About two years later, an Institute-backed group, which included the Table Saw Manufacturers, made a public announcement of that technology plan. On December 1, 2003, the Antitrust Division of the Department of Justice (sometimes, "DOJ") published a "Notice Pursuant to the National Cooperative Research and Production Act of 1993, " 15 U.S.C. §§ 4301-4306, which alerted the public and the market to a "Power Tool Institute Joint Venture Project" (the "PTI joint venture"). J.A. 187. See generally 68 Fed. Reg. 67, 216 (Dec. 1, 2003). The DOJ notice stated that the Table Saw Manufacturers, with others, planned to enter into a PTI-sponsored joint venture, "[t]he nature and objectives of [which were] the research and development of technology for power saw blade contact injury avoidance, including skin sensing systems, blade braking systems, and/or blade guarding systems." J.A. 187. The notice went on to say the members of the PTI joint venture would "share confidential information and intellectual property rights" with each other, and that any resulting intellectual property would "be shared among" the PTI joint venture participants and the Institute's membership generally. J.A. 187.

         SawStop was contemporaneously aware of this development, but did nothing. Fanning "read the Federal Register notice in 2003" and "had a suspicion that something might be going on." J.A. 3829 (internal quotation marks omitted). Even so, SawStop never reported its belief of anticompetitive behavior by the Table Saw Manufacturers to the applicable regulatory authorities, like the DOJ or the Federal Trade Commission ("FTC").

         3.

         Throughout this period, SawStop's principals suspected a conspiracy and repeatedly represented, both privately and publicly, that the Table Saw Manufacturers were colluding against it. In 2004, for instance, Dr. Gass gave an interview to the Portland, Oregon, newspaper The Oregonian for an article concerning SawStop and AIMT. In that article, Dr. Gass made explicit reference to industry-wide collusion, claiming "saw makers [we]re colluding to suppress" AIMT. J.A. 877. According to Dr. Gass, the industry had two motives for such collusion. First, "they don't want to retrofit production lines." J.A. 877. Second, and "[m]ore important, . . . they want to avoid the product[s] liability claims that could result because they failed to adopt a technology that could have prevented hand injuries." J.A. 877.

         Dr. Gass made similar statements as an expert witness in a products liability suit against Bosch. See generally Kent v. Robert Bosch Tool Corp., No. 1:06-cv-11555-RWZ (D. Mass. filed Aug. 30, 2006). There, Dr. Gass offered his opinion that AIMT was a feasible improvement that Bosch could have implemented to make its table saws safer. At his deposition, taken in September 2008, Dr. Gass testified that AIMT had not been widely adopted by the table saw industry because he "believe[d] it to be true" that the Table Saw Manufacturers were "colluding against SawStop" and AIMT. J.A. 909.

         Indeed, even before Dr. Gass' 2008 Kent deposition, he sought legal advice to determine what recourse, antitrust or otherwise, SawStop had against the Table Saw Manufacturers for their alleged collusion. In 2006, Dr. Gass consulted what is now the law firm of Quinn Emanuel Urquhart & Sullivan, LLP ("Quinn Emanuel") to evaluate whether SawStop had an antitrust claim against the Table Saw Manufacturers and, if so, to consider whether Quinn Emanuel would take SawStop's case on a contingency-fee basis.

         In a November 2006 letter, Quinn Emanuel declined SawStop's request for contingency-fee-based representation, but indicated that SawStop "may well [have] a good claim" against the Table Saw Manufacturers. J.A. 3653. The letter went on to discuss areas of practical concern, which caused Quinn Emanuel to decline contingency-fee representation at that time. Among Quinn Emanuel's concerns were "potential statute of limitations problems[.]" J.A. 3653 (emphasis added).

         4.

         Despite Quinn Emanuel's explicit warning regarding "potential statute of limitations problems, " SawStop neither brought suit against the Table Saw Manufacturers nor contacted the DOJ or the FTC to lodge an antitrust complaint. Instead, SawStop continued to prosecute its collusion case in the court of public opinion. In that regard, Dr. Gass continued to testify as an expert witness in products liability cases against the Table Saw Manufacturers alleging collusion against SawStop.

         The plaintiffs in several of the cases in which Dr. Gass testified on their behalf as an expert witness pled specific claims of collusion by the Table Saw Manufacturers. See,e.g., Eddery v. Black & Decker Corp., No. 1:08-cv-10849-LTS (D. Mass. filed May 23, 2008). For example, paragraph 3 of the nine-page Eddery complaint alleges that Black & Decker "colluded with [its] competitors and others in the industry to keep [certain] alternatives, " like AIMT, "off the market." Complaint ¶ 3, Eddery, No. 1:08-cv-10849-LTS. However, Dr. Gass represented that he never read the pertinent allegations in the complaint and never inquired of the plaintiff's counsel concerning those allegations despite testifying to that precise subject matter. Similarly, Fanning used the Public Access to Court Electronic Records (PACER) system to review the dockets of several products liability suits for evidence of the Table Saw ...


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