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4th Circuit: Failing to name defendant can be hazardous to your case

Plaintiffs’ counsel be advised: If you want a defendant ultimately to be on the hook for a damages award, make sure to name him or her as a defendant or at least mention the person when describing the alleged wrongdoing in the complaint.

A federal appeals court essentially delivered the above advisory in holding that the president of the former Rockville-based Life Technologies Corp. cannot be held personally liable for a $1.7 million damages award for the company’s infringement on the trademark of an identically named Delaware corporation that also provides scientific products and services.

In a published 3-0 decision Wednesday, the 4th U.S. Circuit Court of Appeals noted that Krishnamurthy Govindaraj was neither a named defendant nor was mentioned in the complaint before being wrongfully held jointly and severally liable for the damages by Senior U.S. District Judge Roger W. Titus in Greenbelt.

“Under well-established principles of due process a person is not subject to a judgment entered in litigation in which he has not been named as a party or been made a party by service of process,” Judge Barbara Milano Keenan wrote for the 4th Circuit. “Such service of process is fundamental to the imposition of any procedural restraint on a named defendant, and enables the court to exercise personal jurisdiction over him. By precluding entry of judgment against a non-party to a case, these due process principles ensure that a court does not adjudicate a personal claim or obligation unless the court has jurisdiction over the person of the defendant.”

Titus had assessed joint and several liability on Govindaraj because, although not a named defendant, he was clearly “the mastermind of the corporate entity” and essentially its alter ego.

But the 4th Circuit said even the brain of an outfit has a due process right not to be held liable without having been named and receiving notice of the litigation.

“In light of these due process limitations, a judgment entered against a corporation that is determined to be the alter ego of a non-party establishes personal liability of the non-party only if the non-party is notified that such liability may be imposed and is given a fair opportunity to defend the action resulting in the judgment,” wrote Keenan, joined by Judges G. Steven Agee and A. Marvin Quattlebaum Jr.

“Here, however, Govindaraj was not notified at any point during the litigation in the district court that the plaintiff was seeking to impose liability on him personally, or to collect a money judgment from him under a theory that he was the alter ego of the defendant corporation,” Keenan added. “Thus, Govindaraj did not have an opportunity to defend against personal liability with the array of defenses and procedures afforded to parties in accordance with their due process rights.”

However, Govindaraj is not totally off the hook.

The 4th Circuit ruled that Titus had validly held the former company president to have been in contempt of court for failing to comply with a magistrate judge’s order that he release his company’s email accounts to the plaintiff as part of the trial’s discovery process. The appellate panel sent the case back to district court to determine the sanction for Govindaraj’s contempt of court.

Govindaraj was represented on appeal by Michael R. Williams, of BSP Law in Kalamazoo, Michigan.

Life Technologies Corp. of Delaware was represented by Meghan Katherine Canty of Theodora Oringher P.C. of Costa Mesa, California.

The 4th Circuit rendered its decision in Life Technologies Corp., a Delaware corporation, v. Krishnamurthy Govindaraj, party in interest, No. 16-1703.


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