Reported / Citable
Background
AuthWallet, LLC sued Fiserv, Inc. for allegedly infringing U.S. Patent No. 8,099,368. The district court dismissed AuthWallet’s complaint without prejudice on February 28, 2025, and allowed 14 days to refile, but AuthWallet did not file a new complaint.
Fiserv later asserted a counterclaim and a third-party complaint against purported inventor Todd Coulter, seeking a declaration concerning the effect of an alleged agreement to dismiss AuthWallet’s infringement claims with prejudice. Coulter asserted claims against AuthWallet and Fiserv, while AuthWallet asserted a patent-ownership counterclaim against Coulter. After Coulter died, his successors were served with a suggestion of death, but no motion to substitute a successor or representative was filed.
The Court’s Holding
In a report and recommendation, Magistrate Judge Derek T. Gilliland recommended striking Fiserv’s counterclaim as untimely. Fiserv filed it without leave after the original claims had been dismissed and well after the applicable responsive-pleading deadline. The magistrate judge reasoned that a counterclaim presupposes an existing claim against the party asserting it.
The magistrate judge also recommended dismissing Fiserv’s third-party complaint without prejudice because Rule 14 permits impleader only when the third party may be liable for all or part of the plaintiff’s original claim. AuthWallet’s original claim had already been dismissed and was not refiled when Fiserv brought Coulter into the case.
Finally, because no substitution motion was filed within 90 days after Coulter’s successors were served, the magistrate judge recommended dismissing without prejudice AuthWallet’s counterclaim against Coulter and Coulter’s counterclaim and cross-claim under Rule 25(a)(1). The report further recommended denying all pending motions as moot.
Key Takeaways
- A counterclaim filed without leave after the original claims have been dismissed may be struck as untimely.
- Rule 14 impleader is improper when the proposed third-party defendant cannot be liable for any part of an original claim that is no longer pending.
- Under Rule 25(a)(1), claims involving a deceased party must be dismissed if no substitution motion is filed within 90 days after proper service of the suggestion of death.
Why It Matters
The recommendation underscores that counterclaims and third-party claims depend on compliance with the Federal Rules’ timing and procedural requirements. Dismissal of the original complaint prevented Fiserv from using later-filed responsive pleadings to keep the dispute pending in its existing procedural form.
It also illustrates Rule 25’s mandatory consequence when a deceased party’s successor or representative is served but no timely substitution motion follows. The document is a magistrate judge’s recommendation to the district judge, not a final order adopting those recommendations.