Case 2:07-cv-01572-MCE-DAD Document 99 Filed 11/02/2009 Page 1 of 3

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8 UNITED STATES DISTRICT COURT
9 EASTERN DISTRICT OF CALIFORNIA
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11 GREENBERG TRAURIG, LLP,
a New York limited
12 liability partnership, No. 2:07-cv-01572-MCE-DAD
13 Plaintiff,
14 v. ORDER
15 GALE CORP., a California
corporation also known as
16 GALE CORPORATION,
17 Defendants.
18 ____________________________
19 AND RELATED COUNTERCLAIM AND
THIRD PARTY CLAIM.
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____________________________
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----oo0oo----
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24 At the time of the Court’s October 22, 2009 hearing on the
25 parties’ in limine requests, further briefing was requested with
26 respect to Third Party Defendants’ Motion in Limine No. 1, which
27 seeks to preclude ultimate issue testimony by Third Party
28 Plaintiff Gale Corporation’s experts in this matter.

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1 That briefing now having been received, and following further

2 consideration of the original papers submitted and arguments
3 presented by counsel, the Court will deny said Motion in Limine
4 No. 1.
5 The Court concludes that the presentation of expert
6 testimony is governed by federal law, and specifically by Federal
7 Rules of Evidence 702 and 704, which permits edperts to testify
8 in the form of an opinion, even if the testimony goes to an
9 ultimate issue, if the expert’s specialized knowledge will assist
10 the trier of fact.
11 The Court rejects Third Party Defendants’ contention that
12 such testimony is governed by state law. The Federal Circuit has
13 unequivocally held that legal malpractice claims relating to
14 alleged negligence during the course of a patent case “arise
15 under” federal patent law. See Air Measurement Technologies,
16 Inc. v. Akin Gump Strauus Hauer & Feld, 504 F.3d 1262, 1273 (Fed
17 Cir. 2007); see also Immunocept LLC v. Fulbright & Jaworski, LLP,
18 504 F.3d 1281, 1285 (Fed Cir. 2007). Even California courts have
19 held they lack jurisdiction over legal malpractice claims
20 relating to patent. Lockwood v. Sheppard, Mullin, Richter &
21 Hampton, 173 Cal. App. 4th 675, 687 (2009). Consequently issues
22 pertaining to expert testimony should be determined by reference
23 to federal law.
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28 ///

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1 While Third Party Defendants cite the Supreme Court’s

2 decision in Holmes Group, Inc. v. Vornado Air Circulation Sys.,
3 Inc., 535 U.S. 826 (2002), that case is inapposite. While the
4 Holmes court did find that a patent counterclaim was ineffective
5 in conferring jurisdiction on a case-in-chief not otherwise
6 involving patent claims, here we have a separate Third Party
7 Complaint alleging legal malpractice, which constitutes a
8 separate legal pleading under Federal Rule of Civil Procedure
9 7(a)(5). Moreover, Greenberg’s initial complaint has been
10 dismissed in its entirety, leaving for adjudication at trial only
11 Gale’s Third Party Complaint alleging legal malpractice.
12 For all these reasons, Third Party Defendants’ Motion in
13 Limine No. 1 is hereby DENIED.
14 IT IS SO ORDERED.
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Dated: November 2, 2009
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17 _____________________________
18 MORRISON C. ENGLAND, JR.
UNITED STATES DISTRICT JUDGE
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 Case 2:07-cv-01572-MCE-DAD Document 95 Filed 10/27/2009 Page 1 of 5

1 Rudy Nolen, SBN 59808

Stephen W. Owens, SBN 84859
2 NOLEN # OWENS
1501 28TH Street
3 Sacramento, California 95816
Telephone: (916) 733-0600
4 Facsimile: (916) 733-0601
5 Attorneys for Defendant and Counterclaimant
GALE CORP.
6
7
8 UNITED STATES DISTRICT COURT
9 EASTERN DISTRICT OF CALIFORNIA
10
11 GREENBERG TRAURIG, LLP, a New Case No.: 2:07-CV-01572-MCE-DAD
York limited liability partnership,
12 SUPPLEMENTAL BRIEF OPPOSING
Plaintiff, MOTION IN LIMINE #1 FILED BY
13 LIVINGSTON & MATTESICH AND
vs. KATHLEEN FINNERTY
14
GALE CORP., A California corporation also
15 known as GALE CORPORATION,
16 Defendant.
17
AND RELATED COUNTERCLAIM AND
18 THIRD PARTY CLAIMS
19
20 Gale Corp. (“Gale”) respectfully submits this supplemental brief to address Livingston &
21 Mattesich (“L&M”) and Kathleen Finnerty’s Motion In Limine #1 on the issue of whether federal
22 or state law applies when the Court considers evidentiary matters.
23 I. Argument
24 A. Diversity does not exist
25 All the parties remaining in this action are California citizens.1 The Court’s jurisdiction,
26 therefore, cannot be based on diversity.
27
1
28 Each admits California citizenship. See Dkt. 6 at Answer ¶4 and at Third-Party Complaint
¶2 (Gale Answer and Third-Party Complaint), Dkt. 10 at ¶¶3,5,6 (Finnerty Answer), and Dkt. 11
at ¶¶3,5,6 (L&M Answer).

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Supplemental Brief in Opposition to L&M Motion in Limine #1
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1 A case falls within a federal court's diversity jurisdiction only if diversity of citizenship
2 among the parties is complete, i.e., only if there is no plaintiff and no defendant who are citizens of
3 the same State. 28 U.S.C. §1332(a)(2); Carden v. Arkoma Associates, 494 U.S. 185, 187 (1990);
4 Osborn v. Metropolitan Life Ins. Co., 341 F.Supp.2d 1123, 1126 (E.D. Cal., 2004).
5 Diversity was lost when Gale joined California citizens L&M and Finnerty as third-party
6 defendants under Rules 14 and 20. The presence of these nondiverse parties automatically
7 destroyed the Court’s diversity jurisdiction. Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S.
8 826, 829 (1989) ("When a plaintiff sues more than one defendant in a diversity action, the plaintiff
9 must meet the requirements of the diversity statute for each defendant or face dismissal.'').
10 Neither those parties nor then-plaintiff Greenberg Traurig LLP asserted misjoinder.
11 No party can waive a jurisdictional defect nor consent to jurisdiction. Insurance Corp. of
12 Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982). No court can ignore the
13 defect either; rather a court, noticing the defect, must raise the matter on its own. Id.
14 Regardless of what the parties asserted in their pleadings or in their Joint Pretrial Statement
15 about the Court’s jurisdiction, the reality of the situation controls. Because diversity does not exist
16 among the parties, this Court’s jurisdiction cannot be based on diversity.
17 B. A federal question exists
18 This action asserts claims of legal malpractice and breach of fiduciary duty relating to the
19 defendants’ alleged mishandling of a patent infringement lawsuit. See Dkt. 6.
20 (i) The applicable rule
21 The applicable rule is that a federal court has federal question jurisdiction when “a well-
22 pleaded complaint establishes either that federal patent law creates the cause of action or that the
23 plaintiff's right to relief necessarily depends on resolution of a substantial question of federal
24 patent law, in that patent law is a necessary element of one of the well-pleaded complaints."
25 Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 809 (1988); 28 USC §1338 (federal
26 courts have exclusive jurisdiction over “any civil action under any Act of Congress relating to
27 patents … .”). Under controlling law, the Court’s jurisdiction to hear this case is based on the
28 latter. That jurisdiction is exclusive—i.e., this malpractice case could not be heard in state court.

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Supplemental Brief in Opposition to L&M Motion in Limine #1
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1 (ii) Decisions of the Court of Appeals for the Federal Circuit control
2 The Court of Appeals for the Federal Circuit has exclusive jurisdiction over all appeals
3 from district court judgments that resolve patent law claims. 28 U.S.C. §1295 (the Federal Circuit
4 has exclusive jurisdiction over appeals if the jurisdiction of the district court “was based, in whole
5 or in part, relating to patents” and over appeals from decisions “of the Board of Patent Appeals and
6 Interferences … with respect to patent applications and interferences.”). See also Christianson v.
7 Colt, 486 U.S. at 814.
8 Federal Circuit law governs all issues within its exclusive jurisdiction. Advanced
9 Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294, 1303 (Fed. Cir., 2001). Whether federal
10 patent law preempts other federal or state law claims is decided based on Federal Circuit law, not
11 regional circuit law. Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1360-61 (Fed.
12 Cir., 1999). Federal Circuit decisions relating to patent law, and patent law-related claims, are
13 unquestionably binding precedent on federal district courts.
14 The Federal Circuit has held that legal malpractice claims relating to alleged negligence
15 during patent litigation and during patent prosecution both “arise under” federal patent law
16 because in both instances substantive questions of patent law are involved. Air Measurement
17 Technologies, Inc. v. Akin Gump Strauss Hauer & Feld, 504 F.3d 1262 (Fed. Cir., 2007) (Patent
18 litigation malpractice claims arise under federal patent law); Immunocept, LLC v. Fulbright &
19 Jaworski, LLP, 504 F.3d 1281 (Fed. Cir., 2007) (Patent prosecution malpractice claims arise under
20 federal patent law).
21 Because those claims arise under patent law, federal courts have exclusive jurisdiction over
22 patent litigation malpractice claims. Id. A California court agrees. Lockwood v. Sheppard,
23 Mullin, Richter & Hampton (2009) 173 Cal.App.4th 675 (California state courts lack subject
24 matter jurisdiction over legal malpractice claims relating to patent reexamination and patent
25 litigation matters).
26 While federal courts look to state negligence law for the elements of a legal malpractice
27 claim, when such claims involve patent law matters, federal district courts have exclusive
28 jurisdiction under 28 USC section 1338 because those claims “arise under” patent law. When

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Supplemental Brief in Opposition to L&M Motion in Limine #1
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1 exercising that jurisdiction, federal courts must follow Federal Circuit law (and, ultimately, U.S.
2 Supreme Court decisions).2 This requires courts to apply that law when addressing “both
3 substantive and procedural issues intimately involved in the substance of enforcement of the patent
4 right.”) Advanced Cardiovascular, 265 F.3d at 1303 (quotation omitted and emphasis added).
5 Gale’s action could not have been brought in state court because federal courts have
6 exclusive jurisdiction over patent litigation malpractice actions. In short, patent litigation
7 malpractice claims arise under federal law, and are federal law claims, because “plaintiff's right to
8 relief necessarily depends on resolution of a substantial question of federal patent law.”
9 Christianson v. Colt, 486 U.S. at 809. There simply is no controlling state evidence law that
10 applies—or can apply—when a federal court adjudicates a patent litigation malpractice claim.3
11 Federal patent law preempts the claim.
12 C. Application of Federal Law To This Case
13 It is black letter law that "federal courts are to apply state-substantive law and federal
14 procedural law." Hanna v. Plumer, 380 U.S. 460, 465 (1965); Fed. R. Evid. 101 (“These rules
15 govern proceedings in the courts of the United States … to the extent and with the exceptions
16 stated in rule 1101.”).
17 Who can testify at trial, who can qualify as an expert, and who can say what to the jury are
18 all procedural questions that federal courts handle routinely through the Federal Rules of
19 Evidence.4 There is no exception to those much-applied rules when the claim being tried is a legal
20
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Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826 (2002) does not
22 compel a different result. In Holmes, the Supreme Court clarified that whether a claim arises under
an act “relating to patents” must be determined solely on the basis of the complaint and not on any
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counterclaims, compulsory or otherwise. Id. In this case, the Court is adjudicating the third-party
24 complaint that Gale filed against L&M and Finnerty. The patent law issues before the Court
derive from that complaint—not from any of Gale’s now-dismissed affirmative defenses or
25 counterclaims to the now-dismissed Greenberg Traurig LLP complaint.

26 3
See also In re Spaulding SportsWorldwide, Inc., 203 F.3d 800, 803-04 (Fed. Cir., 2000)
(applying Federal Circuit law to a question of attorney-client privilege between patentee and patent
27
attorney).
28 4
Please see Gale’s Opposition to L&M’s Motion in Limine #1 (Dkt. 79).

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Supplemental Brief in Opposition to L&M Motion in Limine #1
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1 malpractice claim. From the very outset, therefore, defendants must shoulder a heavy burden to
2 persuade the Court to disregard the Federal Rules and to apply California procedural law when
3 considering evidentiary issues in this case. No rationale for that shift of law has been offered.
4 But even if such a rationale exists, Gale’s patent litigation malpractice claim is a federal
5 law claim—which is the only reason this case remains in this Court—and so looking to state law
6 for procedural rules violates the Eerie doctrine and impermissibly shuns the Federal Rules.
7 The specific issue before the Court directly involves patent law. The defendants’ motion in
8 limine seeks to prohibit Gale’s experts from testifying that, in their opinion, the Patent Office
9 “would have” initiated a reexamination of the patent being asserted in the underlying case, that
10 there was a “high likelihood” the Patent Office would have narrowed or cancelled those patent’s
11 claims, and that the court hearing the underlying patent infringement case would “very likely”
12 have stayed it pending the patent’s reexamination.5
13 There can be no doubt that these expert opinions involve substantive patent law. Because
14 they do, federal law controls the question of whether those opinions may be offered to the jury.
15 Advanced Cardiovascular, 265 F.3d at 1303 (district courts must apply federal law when
16 addressing “both substantive and procedural issues intimately involved in the substance of
17 enforcement of the patent right.”) (quotation omitted and emphasis added). The Federal Rules of
18 Evidence, and the federal case law applying those Rules, are, therefore, controlling.6
19
20 Respectfully Submitted,
21 NOLEN # OWENS
22
23 DATED: October 27, 2009 By:__/s/ Rudy Nolen
Rudy Nolen
24 Attorney for Gale Corp.
25
26
5
All are quotes from Gale’s experts’ reports. See L&M’s Motion in Limine #1 (Dkt. 73) at
27 Exh. A at pp. 1-3 (Brisson Expert Report) and Exh. B at pp. 10-12 (Beck Expert Report).
28 6
Gale refers the Court to the directly-on-point federal case law, statutes, and Federal Rules
and commentary discussed in Gale’s Opposition to L&M’s Motion in Limine #1 (Dkt. 79).

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Supplemental Brief in Opposition to L&M Motion in Limine #1