The U.S. District Court for the Northern District of California recently ruled that a patent legal malpractice plaintiff was not judicially estopped from re-filing its lawsuit in federal court after initially filing it in state court. In E-Pass Technologies v. Moses & Singer, LLP, the plaintiff patent-holder sued its attorneys for malpractice after they lost multiple patent-infringement lawsuits and thereby subjected the company to substantial attorney-fee awards. The company initially filed its malpractice suit in California state court and litigated the issue of whether the court had jurisdiction. Based on narrow construction of the claims proffered by the company’s attorneys, the California Court of Appeal ruled that the claims did not raise substantial issues of patent law.
Later, while the state court action remained pending, the company filed a similar action for malpractice against the same attorneys in U.S. District Court. The company did this because it felt that the state court decision upholding jurisdiction was unduly restrictive. The company averred that it would dismiss the state court action once the federal court ruled that it had jurisdiction over the claims.
The attorney defendants moved to dismiss the federal action on the ground that the company was judicially estopped from pursuing it based on representations the company made to the California Court of Appeal concerning the scope of the claims. In ruling on the motion, the District Court said that although it was sympathetic to the defendants’ allegations of forum shopping, the company was not judicially estopped from pursuing its claims in federal court. In this context, a necessary element of judicial estoppel was that the first court (here the state court) must have relied on an earlier representation from which the plaintiff later retreated. That had not occurred. Accordingly, the claims were allowed to proceed in District Court.
The unpublished decision can be found at 2011 U.S. Dist LEXIS 128018.