## Facts

- Jack Lemkin claimed he created eight drawings used in a provisional patent application for an adjustable-height pet feeder.
- Craig Miller and Mark Watkins, attorneys then working at Oldham & Oldham, LPA (O&O), prepared and filed the provisional patent application for their client Dr. Steve Tsengas (associated with OurPet’s Co., Inc.).
- The application materials identified the eight drawings as created by Tsengas; Lemkin alleged he told Miller and O&O that the drawings were his and that they failed to correct the attribution.
- O&O later sold its assets and transferred client matters and files to Hahn, Loeser & Parks (HLP).
- In 2005, Lemkin sued Miller, Watkins, and HLP in Ohio state court, asserting fraud and negligent misrepresentation and alleging HLP was O&O’s successor in interest.
- The Ohio trial court granted summary judgment to HLP on the successor-liability theory, holding that HLP was not a successor in interest to O&O under Ohio law.
- The Ohio court later dismissed Lemkin’s remaining claims against Miller and Watkins for lack of subject-matter jurisdiction, reasoning the claims arose under federal patent law within the exclusive jurisdiction of the federal courts; the Ohio appellate court affirmed that jurisdictional dismissal.
- In 2010, Lemkin filed suit in federal court asserting negligent misrepresentation, fraud, and gross and willful misconduct against Miller and Watkins, and asserted a claim seeking to hold HLP liable (including on a direct-liability theory).
- HLP moved to dismiss (or, alternatively, for summary judgment) based on res judicata arising from the Ohio state-court summary judgment.
- The federal court issued an order requiring HLP to show cause why its motion should not be denied on the theory that the state court lacked subject-matter jurisdiction in a case tied to patent-law allegations; HLP responded, and Lemkin did not.

## Issues

1. Whether the Ohio state court’s summary judgment in favor of HLP on successor liability was a final judgment by a court of competent jurisdiction entitled to preclusive effect in federal court.
2. Whether the state court’s later dismissal of the claims against Miller and Watkins for lack of patent-law jurisdiction prevented preclusion as to the earlier successor-liability judgment for HLP.
3. Whether Lemkin could avoid Ohio claim preclusion by asserting a new, direct-liability theory against HLP based on the same events.

## Decision

- The court granted HLP’s motion to dismiss and dismissed HLP from the federal action.
- The court held that the Ohio state court had subject-matter jurisdiction to decide the successor-liability question because it turned on Ohio corporate-successor law and did not require resolution of a substantial question of federal patent law.
- Because the state court was competent to decide successor liability, the state court’s summary judgment for HLP was treated as a final merits determination for preclusion purposes.
- Applying Ohio res judicata principles through 28 U.S.C. § 1738, the court concluded Lemkin’s renewed effort to impose liability on HLP arose from the same transaction as the earlier state suit and therefore was barred.
- The court found the subsequent state-court jurisdictional dismissal of claims against the individual attorneys did not strip preclusive effect from the earlier HLP judgment.
- The court denied as moot a pending motion to stay as it related to HLP.

## Legal Principles

- Under 28 U.S.C. § 1738, a federal court must give a state-court judgment the same preclusive effect it would receive in the courts of the rendering state.
- Under Ohio law, claim preclusion generally bars subsequent actions between the same parties (or their privies) on claims arising out of the same transaction or occurrence that were raised or could have been raised in the prior action, so long as there was a final judgment by a court of competent jurisdiction.
- A judgment is not preclusive if the rendering court lacked subject-matter jurisdiction over the claim it decided; however, jurisdiction is assessed claim by claim, and a court may be competent to decide a discrete state-law issue even if other claims in the case belong exclusively in federal court.
- Exclusive federal jurisdiction under 28 U.S.C. § 1338 applies when a well-pleaded complaint shows that patent law creates the cause of action or that the right to relief necessarily depends on resolution of a substantial question of patent law; state-law doctrines such as successor liability do not automatically fall within § 1338.
- A later jurisdictional dismissal of other claims does not negate the effect of an earlier, valid final judgment on a separate issue within the state court’s authority.
- Recasting a previously litigated attempt to hold a party liable as a new state-law theory does not avoid claim preclusion when the later claim rests on the same operative facts and seeks to impose the same liability previously rejected.

## Conclusion

The court dismissed Lemkin’s claims against HLP because an Ohio state court had already entered summary judgment that HLP was not a successor to O&O, the state court was competent to decide that successor-liability issue even though other patent-related claims were later dismissed for lack of jurisdiction, and Ohio claim preclusion therefore barred Lemkin’s renewed attempt to hold HLP liable in federal court based on the same events.


Lemkin v. Hahn, Loeser & Parks, 2011 WL 2555378 (2011)