By Eric Schweibenz
On February 15, 2012, U.S. District Court Judge Lee Yeakel, seated in the U.S. District Court for the Western District of Texas, issued an order staying a litigation between Plaintiff Freescale Semiconductor, Inc. and numerous defendants, including, among others, Vizio, Inc. and Sanyo Electric Co., Ltd.  The Defendants brought an unopposed motion to stay the district court action pursuant to 28 U.S.C. § 1659 and the court’s inherent authority to stay in light of an ongoing parallel Section 337 investigation between the parties.

By way of background, under 28 U.S.C. § 1659(a), upon timely request of a Section 337 respondent, who is also a party in a civil action, a “district court shall stay, until the determination of the Commission becomes final, proceedings in the civil action with respect to any claim that involves the same issues involved in the proceeding before the Commission.”  A respondent’s request for a stay is deemed timely only if made within (1) 30 days after being named as a respondent in the ITC proceeding, or (2) 30 days after the district court action is filed, whichever is later.  See our February 23, 2010 post for more details.

According to the order, Judge Yeakel “continues to doubt the constitutionality of the statute’s requirement that a district court ‘shall stay’ a case.”  While Judge Yeakel did not make a holding in this regard, he noted that this “provision appears to go beyond the legislative powers granted to Congress under Article I of the U.S. Constitution.”  Accordingly, Judge Yeakel denied the motion under 28 U.S.C. § 1659(a), but granted the motion pursuant to the Court’s inherent authority.      

In light of the Court's order here, defendants filing a motion to stay in a parallel district court action should provide district courts with the option of granting such motion pursuant to 28 U.S.C. § 1659(a) or the Court's inherent authority to stay ongoing litigation.