Sunoco Patent Trial 'Experiment' Nixed After Virus Objections

By Sarah Jarvis
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Law360 (July 13, 2020, 8:37 PM EDT) -- Delaware's chief federal judge on Monday ordered a postponement in a jury trial planned for next month between Sunoco and Magellan Midstream over gasoline patents, scrapping an earlier, experimental plan to have jurors attend in-person with witnesses testifying remotely due to the pandemic.

Chief U.S. District Judge Leonard Stark postponed the trial, which had been scheduled for August 3, after the parties wrote letters to the court on Friday and Saturday addressing delaying the trial. Sunoco Partners Marketing & Terminals LLC requested a postponement, citing increasing COVID-19 cases in Delaware, while Magellan Midstream Partners LP said the case was ready for trial.

"Although the court has attempted to fashion measures that would enable [the] trial to proceed in spite of the COVID-19 pandemic, Sunoco respectfully requests the court continue the trial dates until an in-person jury [trial] can proceed," Sunoco said.

Early last week, Judge Stark ruled that delaying the trial further because of the pandemic was not preferable. He had decided to hold the trial, which he called "something of an experiment," in a courtroom with jurors attending in-person, as well as the two fuel companies' lawyers and corporate representatives, though the latter groups would be extremely limited in their numbers. Meanwhile, the witnesses would have appeared by a live video link.

But Judge Stark reversed course after a teleconference with the parties Monday and continued the trial to an unspecified future date. 

Sunoco said in its letter to the court that Delaware's governor extended a state of emergency order until August 6, three days after the planned trial. The company said the proposed experimental trial would "jeopardize norms favoring in-person testimony and Seventh Amendment norms regarding juror selection, leading to potentially unfair results."

The company expressed concern that the disproportionate impact the virus has had on minority communities and the elderly risks "undermining the representative nature of the jury pool."

It also said it was concerned about the "substantial economic and personal costs" to its attorneys, who the judge asked to self-quarantine for 14 days before the trial upon arriving Delaware from their home in Houston, Texas. That imposes "disproportionate burdens and harms" on them since Magellan's counsel lives in Delaware and won't have to quarantine, and no one knows whether it will be safe for the trial to take place, Sunoco said.

But Magellan said, "the parties are ready, and the case was ready for trial." The company said it would have supported a short postponement of a month or so, but added that "fundamentally, the defendants would like to put this proceeding behind them."

"At present, all defendants can assume is that the court will be conducting remote trials for the indefinite future," Magellan said. "As a result, the defendants prefer to proceed as soon as the court believes it can safely conduct a jury trial."

Sunoco brought the 2017 infringement suit against Magellan over a group of patents for blending butane into gasoline, alleging Magellan willfully infringed five patents.

In March, the Patent Trial and Appeal Board invalidated claims in two of the Sunoco patents, finding U.S. Patents Nos. 9,606,548 and 9,494,948 invalid as anticipated. Sunoco told the federal court afterward that the PTAB decisions "have no legal effect on this court, this trial, or validity until appeals are exhausted." Sunoco indicated that it plans to appeal and "expects to reverse" the PTAB decisions.

Sunoco has asserted four of the same patents in a separate case against U.S. Venture Inc. and unit U.S. Oil Co. Inc. in Illinois federal court. After a bench trial, the judge ruled in January that U.S. Venture had infringed, awarding Sunoco $6 million in damages — though the company had originally sought $32 million.

Counsel for all parties did not immediately respond to requests for comment Monday.

The patents-in-suit are U.S. Patent Nos. 9,494,948 and 9,606,548.

Sunoco Partners is represented by John C. Phillips Jr., David A. Bilson and Megan C. Haney of Phillips McLaughlin & Hall PA, and John Keville and Michelle Replogle of Winston & Strawn LLP.

Magellan and Powder Stream Logistics are represented by Douglas E. McCann, Martina Hufnal and Dorothy Whelan of Fish & Richardson PC and David Moreland of Meunier Carlin & Curfman LLC.

The case is Sunoco Partners v. Powder Springs et al., case number 1:17-cv-01390, in the U.S. District Court for the District of Delaware.

--Additional reporting by Cara Salvatore. Editing by Steven Edelstone.

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