[00:00:06] Speaker 01:
Our final case today is Oleski versus General Electric Company.

[00:00:38] Speaker 01:
And you reserved three minutes of time for rebuttal.

[00:00:52] Speaker 00:
Yes.

[00:00:53] Speaker 01:
You may proceed sir.

[00:00:56] Speaker 00:
Mr. Alexi's position on this appeal is that GE waived costs because it did not file a

[00:01:04] Speaker 00:
its bill of cost within a 30-day time period that's provided for by the local rule.

[00:01:14] Speaker 00:
And that local rule specifically states that if the bill of cost is not filed within 30 days, the costs are deemed to be waived.

[00:01:27] Speaker 00:
And there are, I think, four issues in this appeal

[00:01:34] Speaker 00:
that are important, and I'd like to discuss them one by one.

[00:01:41] Speaker 00:
The first issue is whether the 30-day period runs from the final judgment.

[00:01:53] Speaker 00:
So the first issue is whether the 30-day period starts from September 29,

[00:02:04] Speaker 00:
15 when the district court entered an order and judgment.

[00:02:13] Speaker 00:
And our position is that the September 29, 2015 submission is the final judgment.

[00:02:25] Speaker 00:
In that order and judgment, the district court granted G's summary judgment motion

[00:02:34] Speaker 00:
for non-infringement, it denied Mr. Alexi's summary judgment motion for infringement, and then dismissed all remaining motions as being moved.

[00:02:50] Speaker 04:
It didn't resolve the counterflame of invalidity, right?

[00:02:53] Speaker 04:
Is that the part that it didn't resolve to remember that correctly?

[00:02:56] Speaker 00:
Well, I don't think that that's our position.

[00:03:01] Speaker 00:
The motions that were dismissed

[00:03:04] Speaker 00:
as being moot, included several motions relating to GE's invalidity counterclaim.

[00:03:12] Speaker 00:
And specifically, I would like to focus on two motions that were dismissed as being moot.

[00:03:20] Speaker 00:
The first one was entitled Plaintiff's Motion for Summary Judgment of Validity, calling no invalidating prior uses or sales, and that was

[00:03:33] Speaker 00:
in docket number 597 and it's identified in Appendix 154.

[00:03:41] Speaker 00:
The second motion, plaintiff's motion on validity was plaintiff's motion for summary judgment that the Alexi patent is valid over defendant section 102 and 103 defenses based on prior art references.

[00:04:01] Speaker 00:
And that was in docket number 623, and it's in appendix 159.

[00:04:07] Speaker 04:
So you don't really give any credit to the later decision by the court where it says its original order did not address GE's invalidity counterclaim?

[00:04:17] Speaker 00:
I do not believe that the court's later decision has any impact on whether the original entry was a final judgment.

[00:04:32] Speaker 00:
And in fact, I will discuss that.

[00:04:35] Speaker 00:
But the court's decision, and let me explain why I believe that this last dismissal of all remaining motions as being moved effectively dismisses the pounder claim as being moved.

[00:05:02] Speaker 00:
And the reason for that is that when these two motions that I just explained were dismissed as being moot, there's no way that they can be moot unless the counterclaim is also moot.

[00:05:17] Speaker 00:
So effectively, the court dismissed the counterclaim as being moot and express

[00:05:29] Speaker 02:
Well, there's no doubt, I suppose, probably no doubt in anybody's mind except lingering doubt in the defendant's mind that the court intended to end the case then and there.

[00:05:42] Speaker 02:
But the question is, judgments need to be very specific and precise in order that people will know that the case is over and that they can do things like file a notice of appeal and so forth.

[00:05:53] Speaker 02:
It's very important that judgments be

[00:05:56] Speaker 02:
say exactly what they're intended to say.

[00:05:59] Speaker 02:
And it seems to me, as I read this judgment, that it just felt a little bit short of saying exactly what the district court probably had in mind, which was to probably go ahead and dismiss the counterclaims.

[00:06:11] Speaker 02:
So when the court was served with a request to fix the problem, the court fixed the problem.

[00:06:18] Speaker 02:
Why isn't that something that we shouldn't discourage by saying, ah, too late?

[00:06:23] Speaker 02:
The problem was already fixed, although only implicitly.

[00:06:28] Speaker 00:
Well, because the original judgment was the final judgment.

[00:06:35] Speaker 02:
And in the Supreme Court... Well, it wasn't if it didn't actually dismiss the counterclaims.

[00:06:40] Speaker 02:
So the problem is if the judge had written the counterclaims are dismissed, then you would surely be right.

[00:06:48] Speaker 02:
But the judge didn't say that.

[00:06:50] Speaker 00:
The judge did not say it expressly.

[00:06:53] Speaker 02:
Right.

[00:06:54] Speaker 00:
But effectively it did that and we're relying on two federal circuit cases in that respect.

[00:07:01] Speaker 02:
But isn't it dangerous and particularly dangerous to people such as your client potentially to say that, well, judgment, here's a judgment that's a final judgment by implication because you are going to, you may well assume that that really wasn't the last order in the case and you'll miss your time for filing a notice of appeal.

[00:07:22] Speaker 02:
Well, that's why we need to be very explicit about judgments.

[00:07:27] Speaker 00:
The Supreme Court addressed this issue of a second final judgment that elaborates on the first in the Schaeffer Brewing Company case.

[00:07:43] Speaker 00:
And in that case, the Supreme Court stated that if the first judgment

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It is a final judgment and then there is more elaborate, more clear explanation in the second judgment.

[00:07:59] Speaker 00:
The second judgment doesn't become a final judgment, it's still the first judgment.

[00:08:05] Speaker 00:
So the question is, was the first judgment that was entered on the 29th a final judgment because effectively it took care of all of the claims.

[00:08:18] Speaker 00:
And the reason that it was a final judgment is because of the third part.

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It dismissed all remaining motions as being moot.

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The only way that those two motions that I cited could be moot is if the counterclaim was moot.

[00:08:38] Speaker 00:
So therefore, effectively, it dismissed, the court dismissed,

[00:08:44] Speaker 00:
the counterclaim at that point.

[00:08:46] Speaker 02:
So if the judge had not used the last two words as moot, you wouldn't be making the argument you're making.

[00:08:52] Speaker 00:
No.

[00:08:53] Speaker 02:
If she had merely dismissed the motions.

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There would be a question whether the judge dismissed it as moot or for some other reason.

[00:09:07] Speaker 00:
But here it's very clear that the judge dismissed it for being moot.

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So in Honeywell and Penderel, the two Federal Circuit cases, the court was very clear that you don't have to have an express dismissal.

[00:09:31] Speaker 00:
In fact, in Penderel, the court referred to effective dismissal because based on

[00:09:42] Speaker 00:
what the court has done in that case.

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In one case, there was a special verdict that rejected all the grounds for invalidity.

[00:09:53] Speaker 00:
So the court of appeals said, well, that's good enough, because effectively, the counterclaim was dismissed.

[00:10:07] Speaker 01:
But let's assume that the

[00:10:11] Speaker 01:
September 29th judgment was final.

[00:10:14] Speaker 01:
Doesn't a 59E motion suspend the finality of a judgment in the Seventh Circuit?

[00:10:22] Speaker 00:
It does suspend finality if the motion is to amend or modify the judgment substantively.

[00:10:35] Speaker 00:
If that motion, if that judgment was final,

[00:10:41] Speaker 00:
the September 29 judgment, it's merely a clarification.

[00:10:46] Speaker 01:
And then we are in the Schaeffer... But in the Seventh Circuit, either way, whether it's a clarification or not, isn't that that first judgment, in this case a September judgment, isn't that suspended?

[00:10:59] Speaker 00:
Only if it's a Rule 59, if the motion qualifies a Rule 59E, not if it's a

[00:11:08] Speaker 00:
just clarification of a final judgment.

[00:11:11] Speaker 00:
That's what we have here, correct?

[00:11:13] Speaker 00:
Clarification, not a substantive change.

[00:11:17] Speaker 00:
The substantive change would be if the counterclaim was not effective.

[00:11:23] Speaker 01:
Wasn't the motion a 59E motion in this case?

[00:11:27] Speaker 00:
No, it was a motion to clarify.

[00:11:30] Speaker 00:
Now, the court could treat that motion to clarify as a 59E motion if there is a

[00:11:39] Speaker 00:
request to modify or to amend substantively the judgment.

[00:11:46] Speaker 00:
But if the original September 29 judgment was the final judgment, there is no substantive change.

[00:11:58] Speaker 00:
The request is merely to express something that was effectively there.

[00:12:08] Speaker 00:
to start with.

[00:12:10] Speaker 04:
Even if the September 29, 2015 order was a final judgment, didn't the district court have the discretion to allow GE to file its cost motion late?

[00:12:23] Speaker 04:
To accept the filing even though it was late?

[00:12:26] Speaker 04:
It has a discretion, didn't it?

[00:12:28] Speaker 00:
The GE never asked to have it.

[00:12:32] Speaker 00:
to put that discretion to be exercised on the court.

[00:12:36] Speaker 04:
Well, it did file a motion and it did ask that its motion be considered.

[00:12:40] Speaker 00:
It filed a motion for clarification.

[00:12:44] Speaker 04:
A motion for clarification of the final judgment, as well as a motion for costs.

[00:12:50] Speaker 00:
No, they were two different files.

[00:12:52] Speaker 04:
That's fine.

[00:12:53] Speaker 00:
Yeah.

[00:12:54] Speaker 00:
But I mean, the G never asked the court to ignore the rule and

[00:12:59] Speaker 01:
And basically, they're looking to amend the judgment.

[00:13:02] Speaker 01:
It may have been called a motion for clarification.

[00:13:05] Speaker 01:
But what they were looking for was to amend the judgment to take care of the counterclaim.

[00:13:10] Speaker 00:
Well, the clarification is not the type of amendment that is subject to rule 59E.

[00:13:18] Speaker 00:
In other words, for 59E to apply, you have to

[00:13:27] Speaker 00:
asked for substantive change in the judgment.

[00:13:30] Speaker 00:
There was no substantive change because that original September 29, 2015 order took care of the counterclaim because it effectively dismissed the yeah.

[00:13:47] Speaker 01:
You're into your rebuttal time.

[00:13:49] Speaker 01:
You want to save your time?

[00:13:54] Speaker 01:
Sure.

[00:13:55] Speaker ?:
OK.

[00:14:03] Speaker 01:
Councillor Buck.

[00:14:05] Speaker 03:
Yes, Your Honor.

[00:14:06] Speaker 03:
May it please the court.

[00:14:08] Speaker 03:
So there was no final and appealable judgment on September 29th, at least.

[00:14:13] Speaker 03:
So an appeal only lies from a final judgment.

[00:14:17] Speaker 03:
A judgment that doesn't dispose of all the claims in the case is not a final judgment.

[00:14:22] Speaker 03:
And in particular, in patent cases, this court has held that a judgment that does not dispose of a counterclaim of invalidity, this court has been very clear on that.

[00:14:32] Speaker 03:
How do you distinguish the Honeywell case?

[00:14:35] Speaker 03:
So the Honeywell case was cited by Mr. Alexi for the proposition that you can ascertain a court's intention by the circumstances.

[00:14:45] Speaker 03:
The circumstances in that Honeywell case, Your Honor, were very different than the circumstances we have here.

[00:14:50] Speaker 03:
A jury found that the plaintiff's patent in that case, the claims, were not invalid.

[00:14:57] Speaker 03:
The district judge denied the defendant's motion for judgment as a matter of law, for a new trial, effectively adopting those jury's findings.

[00:15:08] Speaker 03:
The district court issued a judgment.

[00:15:10] Speaker 03:
And while that judgment did not expressly dispose of the defendant's counterclaims, that judgment did acknowledge that jury's special verdict form that disposed of those counterclaims.

[00:15:21] Speaker 03:
So in that case, the counterclaims had been decided on the merits.

[00:15:25] Speaker 03:
And the court considered precisely that decision of the jury in its judgment.

[00:15:32] Speaker 03:
So here, there's no decision on the merits.

[00:15:35] Speaker 03:
For the judge to adopt, the court did not address GE's counterclaim at all.

[00:15:41] Speaker 03:
So we do think that Honeywell is distinct on those bases at least.

[00:15:47] Speaker 03:
Also, if we get to this issue of a Rule 59 motion,

[00:15:52] Speaker 03:
Even if that September 29th order was final and appealable, GE's motion for clarification, no matter what it's called, because the case law is clear that the name of the motion doesn't matter, what GE asked for in that motion was for the court to dismiss the counterclaim of invalidity so that there would be a final and appealable judgment.

[00:16:16] Speaker 03:
In other words, GE's

[00:16:18] Speaker 03:
motion specifically addressed the fact that it was not a final and appealable judgment because the counterclaim was still in the case, the court agreed.

[00:16:27] Speaker 03:
Then, Your Honor, we get to the issue of the standard of review here.

[00:16:33] Speaker 03:
And this really combines with GE's third argument here.

[00:16:38] Speaker 03:
And that is that the district court can accept untimely filings even if they are untimely.

[00:16:46] Speaker 03:
The standard of review there is deference, Your Honor.

[00:16:50] Speaker 03:
So that deference should be afforded to the district court's decision here.

[00:16:55] Speaker 03:
So even if this court were to find that the September 29th order was final and appealable, even if this court were to find that the motion for clarification was not a Rule 59 motion, the district court had discretion to accept GE's motion for costs.

[00:17:14] Speaker 03:
And that's exactly what the court did.

[00:17:15] Speaker 02:
But since the court did not, I guess, expressly exercise the discretion as such after finding that there was an expiration of the 30 days, wouldn't we have to remand to the district court in order for her to exercise her discretion if we were to find against you on the first two points?

[00:17:37] Speaker 03:
So we don't see in the case law that that type of explicit exercise of discretion is necessary.

[00:17:45] Speaker 03:
Okay.

[00:17:46] Speaker 03:
So we don't believe that that type of remand would be necessary.

[00:17:50] Speaker 02:
So we would be inferring that the district court would exercise her discretion by virtue of the fact that she had accepted the bill of costs?

[00:18:01] Speaker 03:
So I think that that issue of discretion also applies to the district court's decision to treat GE's motion for clarification.

[00:18:13] Speaker 03:
as a Rule 59 motion.

[00:18:15] Speaker 02:
Well, OK.

[00:18:15] Speaker 02:
But suppose that we focus entirely on the question of whether the court, having been told that the final judgment occurred in September and that the 59E motion did not have the effect of tolling the final judgment time.

[00:18:40] Speaker 02:
Wouldn't the district court be the one to exercise discretion as opposed to having us do the exercising of discretion for her?

[00:18:47] Speaker 03:
So I think there's two issues.

[00:18:49] Speaker 03:
So the first is, does the district court have to explicitly exercise that discretion?

[00:18:55] Speaker 03:
We don't see in the case line a requirement that the district court has to explicitly exercise that discretion.

[00:19:00] Speaker 03:
But we also think that the abuse of discretion standard applies to the Rule 59 motion issue.

[00:19:08] Speaker 03:
So in order for your hypothetical to actually carry out, the court would have to find that the district court abused its discretion in viewing GE's motion of clarification.

[00:19:19] Speaker 02:
Right.

[00:19:19] Speaker 02:
Well, my hypothetical is that assuming that we were to find, would we then have to remand the case?

[00:19:28] Speaker 03:
And I believe no, Your Honor, because we don't find in the case law, again,

[00:19:32] Speaker 03:
Any indication that the discretion applied by the district court has to be explicit in that sense.

[00:19:41] Speaker 04:
Even in a situation where the district court's actions and saying that this wasn't a final judgment and such kind of shows that the district court wasn't exercising that discretion?

[00:19:51] Speaker 03:
So the district court did not explicitly exercise that discretion.

[00:19:57] Speaker 04:
Right.

[00:19:57] Speaker 04:
But maybe the facts in this case, just looking at it,

[00:20:00] Speaker 04:
It seems as if the district court not only didn't say that it wasn't exercising discretion, but it seems to have taken a different approach that would suggest that it did not exercise discretion.

[00:20:10] Speaker 03:
And that different approach, Your Honor, was to accept GE's position on both issues, on the September 29th order not being final and appealable, and on GE's motion for clarification being a Rule 59 motion.

[00:20:25] Speaker 03:
And that latter point, GE's Rule

[00:20:27] Speaker 03:
Motion for clarification, being a rule 59 motion, is itself one which should be afforded deference by this court, to the district court.

[00:20:37] Speaker 03:
Mr. Alexi's counsel has made much of the fact that the motions for summary judgment were dismissed as moot.

[00:20:48] Speaker 03:
And by that,

[00:20:51] Speaker 03:
he argues that therefore the court intended, and I think GE agrees, the court intended to dismiss the case.

[00:21:00] Speaker 03:
Absolutely, the court intended to dismiss the case, but the court did not intend to dismiss the counterclaims.

[00:21:08] Speaker 03:
Dismissing motions for summary judgment is not saying as dismissing a counterclaim of invalidity.

[00:21:15] Speaker 03:
The district court's dismissal of the party's motions simply left

[00:21:19] Speaker 03:
the counterclaim for invalidity ready to stand for trial.

[00:21:23] Speaker 02:
But you don't really argue, do you, that the district court didn't think she was done with this case?

[00:21:32] Speaker 03:
I'm not, Your Honor.

[00:21:33] Speaker 02:
So I mean, if she was done with this case, she was only done with this case if the counterclaims were gone, right?

[00:21:40] Speaker 03:
Absolutely.

[00:21:40] Speaker 02:
Right.

[00:21:41] Speaker 02:
So she had every intention of dismissing the counterclaims.

[00:21:45] Speaker 02:
I thought you were just arguing that, well, she didn't actually

[00:21:49] Speaker 02:
intend to do that.

[00:21:51] Speaker 03:
So she intended to get rid of this entire case, including the counterclaims.

[00:21:55] Speaker 03:
Which would entail dismissing the counterclaims.

[00:21:57] Speaker 03:
Absolutely.

[00:21:58] Speaker 03:
But there was nothing in her order that expressly did so.

[00:22:01] Speaker 03:
And there was nothing in this case that the circumstances can be such that she intended specifically to dismiss the counterclaims.

[00:22:10] Speaker 03:
This court has addressed this issue on a number of times, even when a court believes that it is dismissing an entire case.

[00:22:19] Speaker 03:
If there is not specific intention to dismiss all of the claims in the case in here, counterclaim of invalidity, then that is not a final and appealable judgment.

[00:22:32] Speaker 03:
On the issue of the Rule 59 motion, Your Honors, under the Seventh Circuit law, substantive post-trial motions that are filed within 28 days of a judgment

[00:22:47] Speaker 03:
are automatically treated as Rule 59 motions.

[00:22:50] Speaker 03:
So there's no dispute that this was filed within 28 days, that GE's motion for clarification was filed within 28 days of the September 29th motion.

[00:23:00] Speaker 03:
The issue is whether it was substantive.

[00:23:04] Speaker 03:
So Mr. Alexi makes much of the fact that it's called a motion for clarification.

[00:23:10] Speaker 03:
What GE asked for in that motion was not clerical.

[00:23:15] Speaker 03:
Dismissing a claim in a case is not clerical.

[00:23:19] Speaker 03:
So it's GE's position that that was very much a substantive motion that was filed.

[00:23:25] Speaker 03:
The district court viewed it as such as well.

[00:23:29] Speaker 03:
The court has no further questions.

[00:23:31] Speaker 03:
I'll leave my time.

[00:23:32] Speaker 01:
Thank you.

[00:23:37] Speaker 01:
Mr. Chizpansky, you have three minutes.

[00:23:40] Speaker 01:
Excuse me, you have two minutes.

[00:23:42] Speaker 00:
Just a few points.

[00:23:44] Speaker 00:
First, the district court in its second decision said that it believed that it had to expressly dismiss the counterclaim.

[00:24:01] Speaker 00:
That's not the law.

[00:24:02] Speaker 00:
The law is that the counterclaim can be effectively dismissed.

[00:24:07] Speaker 00:
In the cases where

[00:24:11] Speaker 00:
the court just dismisses a case on the basis of non-infringement and doesn't do anything with respect to the invalidity.

[00:24:22] Speaker 00:
At that point, that case is not dismissed because the court did not effectively deal with the counterclaim.

[00:24:31] Speaker 00:
In this case, the court effectively did deal with the counterclaim because it dismissed Mr. Alexis

[00:24:39] Speaker 00:
summary judgment motions on validity.

[00:24:41] Speaker 00:
The only way that it can dismiss that is if it had dismissed effectively the counterclaims for invalidity.

[00:24:53] Speaker 00:
So that's point number one.

[00:24:55] Speaker 00:
Point number two that I'd like to make is that G is referring to a Healy case for the proposition that the court can basically

[00:25:07] Speaker 00:
ignore local rule on filing late.

[00:25:15] Speaker 00:
The Healy case is specifically designated by the Seventh Circuit as being non-precedential.

[00:25:21] Speaker 00:
The reason it's being designated as non-precedential is because it had very unusual facts.

[00:25:31] Speaker 00:
In that case, Judge Zegel in the Northern District of

[00:25:35] Speaker 00:
Illinois has its own procedure for how to deal with costs.

[00:25:40] Speaker 00:
So, in the Healy case, the filing was late, but there was also a reliance on Judge Lezago's procedure.

[00:25:55] Speaker 00:
So, the Healy case is very unique, and that's why it's not presidential.

[00:26:00] Speaker 00:
I'm not sure that that's the Seventh Circuit law, that the court can ignore

[00:26:06] Speaker 00:
Rule 54.1, which specifically states if the filing is not made in time, the costs are waived.

[00:26:20] Speaker 00:
And Healy does not state that.

[00:26:26] Speaker 01:
You want to conclude, Mr. Francis?

[00:26:29] Speaker 01:
Sure.

[00:26:30] Speaker 00:
And the key distinction is between

[00:26:37] Speaker 00:
express and effective dismissal of claims.

[00:26:43] Speaker 00:
And I should like, I'd like to point one important, make one more point, and that is if it were true that every claim has to be expressly dismissed by court in order for the judgment to be final, then this last judgment is still not final.

[00:27:06] Speaker 00:
There is no final judgment because Mr. Alexei had two claims in his complaint.

[00:27:20] Speaker 00:
One is for direct infringement.

[00:27:24] Speaker 00:
The other was for induced infringement.

[00:27:28] Speaker 00:
Neither of the two orders that were entered by the court

[00:27:35] Speaker 00:
dismissed those two claims expressly.

[00:27:38] Speaker 00:
Now, effectively, they did.

[00:27:41] Speaker 00:
But the same thing happened with a counterclaim.

[00:27:45] Speaker 01:
OK.

[00:27:45] Speaker 01:
I think we have your argument, sir.

[00:27:46] Speaker 01:
Thank you very much.

[00:27:48] Speaker 01:
Thank all the parties for the argument.

[00:27:50] Speaker 01:
This court now stands amongst us.

[00:27:52] Speaker 01:
All rise.

[00:27:55] Speaker 03:
Your Honor, the court is adjourned for tomorrow morning.

[00:27:58] Speaker 03:
It's an o'clock a.m.