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    Civil Procedure

    Laches in Cases Where Suit Is Commenced Within Limitations Period

    Posted by Paul A. Ferrer on February 16, 2018 at 7:10 AM

         Laches is "'a defense developed by courts of equity' to protect defendants against 'unreasonable, prejudicial delay in commencing suit.'" SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954, 960 (2017) (quoting Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1967, 1973 (2014)). It is a familiar statement of the law that laches generally does not apply when the statute of limitations applicable to a legal claim has not run. But many state courts continue to indicate that, in some circumstances, "laches may bar a legal claim even if the statutory period of limitations has not yet expired." Tenneco Inc. v. Amerisure Mut. Ins. Co., 281 Mich. App. 429, 456-57, 761 N.W.2d 846, 863-64 (2008); see also Veysey v. Nelson, 2017 UT App 77, ¶ 7, 397 P.3d 846, 848 ("[B]ecause laches may apply in situations where the statute of limitations has not yet run, the existence of a statute of limitations does not … automatically preclude application of the laches doctrine."), cert. denied, 400 P.3d 1046 (Utah 2017); Bldg. & Constr. Trades Council of N. Nev. v. State ex rel. Pub. Works Bd., 108 Nev. 605, 611, 836 P.2d 633, 637 (1992) ("Especially strong circumstances must exist . . . to sustain a defense of laches when the statute of limitations has not run.").  However, that no longer appears to be the case in federal court, at least with respect to a federal claim as to which Congress has expressly supplied a statute of limitations.

                In Petrella, the U.S. Supreme Court held that laches cannot defeat a damages claim brought within the three-year period prescribed by the Copyright Act's statute of limitations. 134 S. Ct. at 1972-75 (applying 17 U.S.C. § 507(b) (requiring a copyright holder claiming infringement to file suit "within three years after the claim accrued")); see also SCA Hygiene, 137 S. Ct. at 961 ("We saw in this language a congressional judgment that a claim filed within three years of accrual cannot be dismissed on timeliness grounds."). In so holding, the Court spoke in very broad terms: "[I]n the face of a statute of limitations enacted by Congress, laches cannot be invoked to bar legal relief." Petrella, 134 S. Ct. at 1974. Petrella's holding rested on both separation-of-powers principles and the traditional role of laches in equity. Since

    [t]he enactment of a statute of limitations necessarily reflects a congressional decision that the timeliness of covered claims is better judged on the basis of a generally hard and fast rule rather than the sort of case-specific judicial determination that occurs when a laches defense is asserted[,] . . . applying laches within a limitations period specified by Congress would give judges a "legislation-overriding" role that is beyond the Judiciary's power.

    SCA Hygiene, 137 S. Ct. at 960. In addition, laches was a defense developed in the equity courts to fill the gap created when the legislature had provided no fixed time limitation, but "where there is a statute of limitations, there is no gap to fill." Id. at 961.

                In 2017, the Court reaffirmed these principles in concluding that Petrella's reasoning applied to a similar provision in the Patent Act. Id. at 959 (applying 35 U.S.C. § 286 ("Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.")). If ever there was a case calling out for an equitable defense to the timeliness of an action, it was SCA Hygiene. There, the plaintiff (SCA) sent a letter in October 2003 alleging that the defendant (First Quality) was making and selling products infringing on its patent. First Quality responded that SCA's patent was invalid and could not support an infringement claim because one of First Quality's patents antedated SCA's patent. SCA sent First Quality no additional correspondence, and First Quality continued to develop and market its products. In July 2004, SCA, without notifying First Quality, asked the Patent and Trademark Office to reexamine the validity of SCA's patent in light of First Quality's patent. In March 2007, the PTO issued a certificate confirming the validity of SCA's patent. SCA waited more than three additional years after that to file a patent-infringement action against First Quality in August 2010, nearly seven years after sending the initial letter in October 2003. Even under those circumstances, however, the Supreme Court held that First Quality could not interpose laches as a defense against damages where the infringement occurred within the six-year period prescribed by the Patent Act. Id. at 967.

                Thus, in federal court, there appears to be no situation in which delay short of a statute of limitations provided by Congress can bar a federal claim under the equitable doctrine of laches. The Supreme Court did, however, indicate that SCA could be equitably estopped from asserting its infringement claim, and remanded for further proceedings in light of the Federal Circuit's holding that there were genuine issues of material fact as to First Quality's equitable-estoppel defense. Id.

    Topics: civil procedure, laches defense, limitations period

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