Chandler v. Phoenix Services

Case: 21-10626     Document: 00516432408          Page: 1     Date Filed: 08/15/2022




           United States Court of Appeals
                for the Fifth Circuit                                 United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                                                       August 15, 2022
                                   No. 21-10626                         Lyle W. Cayce
                                                                             Clerk

   Ronald Chandler; Chandler Mfg., L.L.C.; Newco
   Enterprises, L.L.C.; Supertherm Fluid Heating
   Services, L.L.C.,

                                                            Plaintiffs—Appellants,

                                       versus

   Phoenix Services, L.L.C.; Mark H. Fisher,

                                                         Defendants—Appellees.


                  Appeal from the United States District Court
                      for the Northern District of Texas
                            USDC No. 7:19-CV-14


   Before Wiener, Graves, and Duncan, Circuit Judges.
   Stuart Kyle Duncan, Circuit Judge:
          Oilfield service companies brought antitrust claims against another
   company for enforcing a fraudulent fracking patent. This is called a Walker
   Process suit. See Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382
   U.S. 172 (1965). The district court dismissed some of the claims for lack of
   standing and others as time-barred. The case was then appealed to the
   Federal Circuit, which is where most antitrust cases of this ilk go. But the
   Federal Circuit found the case had no live patent issues—the underlying
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   patent had already been declared invalid—and so transferred the case to us.
   See Chandler v. Phoenix Servs. LLC, 1 F.4th 1013 (Fed. Cir. 2021).
          We differ with the Federal Circuit over whether we have appellate
   jurisdiction over Walker Process cases. Compare Xitronix Corp. v. KLA-Tencor
   Corp. (Xitronix II), 916 F.3d 429 (5th Cir. 2019), with Xitronix Corp. v. KLA-
   Tencor Corp. (Xitronix I), 882 F.3d 1075 (Fed. Cir. 2018). But the Supreme
   Court has told us to accept circuit-to-circuit transfers if the jurisdictional
   question is “plausible.” Christianson v. Colt Indus. Operating Corp., 486 U.S.
   800, 819 (1988). While we continue to disagree with the Federal Circuit on
   this point, we do not find the transfer implausible. We therefore accept the
   case and affirm the district court’s judgment.

                                         I.

                                         A.
          Plaintiffs are oil-field manufacturing and services companies
   (collectively, “Chandler”) 1 who brought Walker Process fraud and sham
   patent litigation claims against defendants Phoenix Services, LLC, and its
   CEO, Mark Fisher (collectively, “Phoenix”). A Walker Process claim is one
   under § 2 of the Sherman Act alleging enforcement of a fraudulently obtained
   patent. See Walker Process, 382 U.S. at 174 (“[T]he enforcement of a patent
   procured by fraud on the Patent Office may be violative of § 2 of the Sherman
   Act provided the other elements necessary to a § 2 case are present.”); 15
   U.S.C. § 2; see also, e.g., TransWeb, LLC v. 3M Innovative Props. Co., 812 F.3d
   1295, 1306 (Fed. Cir. 2016) (discussing Walker Process claims). The patent at




          1
             Plaintiffs are Ronald Chandler; Chandler Manufacturing, LLC; Newco
   Enterprises, LLC; and Supertherm Fluid Heating Services, LLC.




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   issue here is U.S. Patent No. 8,171,993 (the “’993 Patent”), which was issued
   to Mark Hefley, founder of Heat On-The-Fly, LLC (“HOTF”).
           We first sketch the patent’s background. The ’993 Patent covers a
   water-heating technology developed by Hefley for use in fracking. 2 Hefley
   first applied for the patent on September 18, 2009. The United States Patent
   and Trademark Office (“USPTO”) issued the patent on May 8, 2012.
   Litigation soon erupted, however. From early 2013 to 2018, HOTF and rival
   companies sparred over the ’993 Patent’s validity in federal district court in
   North Dakota. See generally Energy Heating, LLC v. Heat On-The-Fly, LLC,
   No. 4:13-CV-10, 2016 WL 10837799 (D.N.D. Jan. 14, 2016) [the “Energy
   Heating Litigation”]. This ended with the Federal Circuit upholding the
   district court’s finding that the patent was unenforceable due to Hefley’s
   inequitable conduct in procuring it. Energy Heating, LLC v. Heat On-The-Fly,
   LLC, 889 F.3d 1291, 1296 (Fed. Cir. 2018). The gist was that Hefley
   knowingly violated the “on-sale bar” by failing to disclose numerous non-
   experimental sales and public uses of his invention prior to the patent’s
   “critical date.” Id. at 1297–1303. 3



           2
             “Fracking is a ‘well stimulation’ technique” in which “oil and gas producers
   inject water, sand, and certain chemicals into tight-rock formations to create fissures in the
   rock that allow oil and gas to escape for collection in a well.” Wyoming v. Zinke, 871 F.3d
   1133, 1137 (10th Cir. 2017) (citation omitted). Hefley’s “invention relates to heating water
   on demand or inline during the frac[k]ing process, instead of using preheated water in large
   standing tanks.” Energy Heating, LLC v. Heat On-The-Fly, LLC, 889 F.3d 1291, 1297 (Fed.
   Cir. 2018) (citation omitted).
           3
             “A patent is invalid under the on-sale bar [in then-applicable 35 U.S.C. § 102(b)]
   if, before the critical date, the invention was both (1) the subject of a commercial sale or
   offer for sale and (2) ready for patenting.” Energy Heating, 889 F.3d at 1299 (citations
   omitted). The bar does not apply if a sale was “a bona fide experiment.” Id. at 1299–1300
   (citation omitted). For purposes of the bar, the “critical date” means one year before
   Hefley’s filing of his patent application on September 18, 2009—i.e., September 18, 2008.
   Id. at 1297. Although the subsection containing the on-sale bar was amended by the Leahy-




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           While the Energy Heating Litigation was pending in district court,
   Phoenix acquired HOTF and the ’993 Patent on January 31, 2014. Phoenix’s
   CEO, Fisher, became president of HOTF after the acquisition.
                                               B.
           In 2019, Chandler brought Walker Process and sham patent litigation
   claims against Phoenix in the U.S. District Court for the Northern District of
   Texas. See Chandler v. Phoenix Servs., 419 F. Supp. 3d 972, 977 (N.D. Tex.
   2019). A Walker Process claim requires showing that (1) the defendant
   obtained its patent by “knowing and willful fraud on the patent office and
   maintained and enforced the patent with knowledge of the fraudulent
   procurement,” and (2) the plaintiff can satisfy all other elements of a
   Sherman Act monopolization claim. TransWeb, 812 F.3d at 1306. A sham
   patent litigation claim posits antitrust liability on (1) an “objectively
   meritless” suit that (2) “conceals an attempt to interfere directly with the
   business relationships of a competitor.” C.R. Bard, Inc. v. M3 Sys., Inc., 157
   F.3d 1340, 1368 (Fed. Cir. 1998) (quoting Prof. Real Estate Invs., Inc. v.
   Columbia Pictures Indus., Inc., 508 U.S. 49, 60-61 (1993)) (cleaned up). This
   second theory also requires proof of a substantive antitrust violation. Ibid. To
   support its claims, Chandler alleged Phoenix was liable as HOTF’s parent
   company for two anticompetitive acts involving the ’993 Patent.
           First, in 2013, HOTF sent a cease-and-desist letter to Amerada Hess
   Corporation (“Hess”), the biggest customer of Supertherm Fluid Heating
   Services, LLC (“Supertherm”), one of the plaintiff companies here. The
   letter notified Hess of the ’993 Patent and asked it to “undertake the
   necessary steps to ensure that any possible infringement by your water



   Smith America Invents Act in 2011, the prior version was in force at all relevant times here.
   See id. at 1297 n.3.




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   heating contractors or subcontractors ceases.” Chandler alleged the letter
   contributed to Supertherm’s losing customers and eventually going out of
   business in 2016.
          Second, in 2014, HOTF (now under Phoenix’s ownership) asserted
   the ’993 Patent in a separate lawsuit in the U.S. District Court for the
   Northern District of Texas against Chandler and Newco Enterprises, LLC
   (“Newco”), two of the plaintiff companies here. See Newco Enters., LLC v.
   Super Heaters N.D., LLC, No. 7:14-CV-87, 2014 WL 11514928, at *1 (N.D.
   Tex. Dec. 19, 2014) [the “Newco Litigation”]. HOTF claimed Chandler and
   Newco had been “actively and knowingly inducing infringement of the ’993
   Patent” by their customers.
          Chandler and Phoenix cross-moved for summary judgment. On April
   13, 2020, the district court denied Chandler’s motion and granted Phoenix’s.
   Chandler v. Phoenix Servs., No. 7:19-CV-14, 2020 WL 1848047 (N.D. Tex.
   Apr. 13, 2020). The court ruled that (1) Chandler lacked standing on its claim
   for lost profits but had standing to seek attorneys’ fees; (2) Chandler’s claim
   was nonetheless time-barred under the four-year statute of limitations, see 15
   U.S.C. § 15b; and (3) Chandler failed to establish liability for Phoenix under
   single-enterprise liability or for Fisher under corporate-officer liability.
   Chandler, 2020 WL 1848047 at *7, *12, *15–16. Chandler timely appealed to
   the Federal Circuit, which found it lacked appellate jurisdiction and
   transferred the case to this court. See Chandler, 1 F.4th at 1014.

                                         II.

          First, we must address our appellate jurisdiction. See Castaneda v.
   Falcon, 166 F.3d 799, 801 (5th Cir. 1999). The Federal Circuit concluded that
   we, not it, have jurisdiction over this appeal and shipped the case to us. See
   Chandler, 1 F.4th at 1014. That decision is law-of-the-case. See Christianson,




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   486 U.S. at 816 & n.5 (1988) (“Federal courts routinely apply law-of-the-case
   principles to transfer decisions of coordinate courts[,]” including “transfer
   decisions that implicate the transferee’s jurisdiction.” (citations omitted)).
   We will revisit the Federal Circuit’s decision only in “extraordinary
   circumstances such as where [it] was clearly erroneous and would work a
   manifest injustice.” Id. at 817 (citation omitted). But “if [we] can find the
   transfer decision plausible, [our] jurisdictional inquiry is at an end.” Id. at 819
   (citation omitted). We conclude the Federal Circuit’s decision was plausible.
          The Federal Circuit has exclusive jurisdiction over a district court’s
   final decision “in any civil action arising under . . . any Act of Congress
   relating to patents[.]” 28 U.S.C. § 1295(a)(1). But here, adhering to its
   precedent in Xitronix I, the Federal Circuit ruled that Chandler’s Walker
   Process claim “does not present a substantial issue of patent law” and so falls
   outside § 1295(a)(1). Chandler, 1 F.4th at 1016 (quoting Xitronix I, 882 F.3d
   at 1078). In particular, the court emphasized “[t]he enforceability of the
   [’993 Patent] is no longer at issue” because its prior Energy Heating decision
   “declared the ’993 patent unenforceable.” Ibid. (citing Energy Heating, 889
   F.3d at 1302). That makes this case, the court explained, an “even weaker”
   candidate for Federal Circuit jurisdiction than Xitronix I. Ibid. Indeed, the
   court doubted there was even a “‘plausible’ basis for jurisdiction,” because
   “[t]he patent allegedly being enforced by Phoenix has already been ruled
   unenforceable” and so “[t]his case will not alter the validity of the ’993
   patent.” Id. at 1018.
          In transferring the case to us on the strength of Xitronix I, the Federal
   Circuit recognized that our court disagrees with Xitronix I. See id. at 1016–18
   (discussing Xitronix II). That is true. Following the transfer in Xitronix I, we
   held in Xitronix II that a Walker Process claim lacking any non-patent theories
   falls within the Federal Circuit’s exclusive jurisdiction. See Xitronix II, 916
   F.3d at 443–44. And we not only disagreed with Xitronix I but found aspects



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   of its reasoning “implausible.” Id. at 441. In particular, we doubted its view
   that the allocation of cases between the Federal Circuit and the regional
   circuits had been altered by Gunn v. Minton, 568 U.S. 251 (2013). See Xitronix
   II at 437–440 (discussing Gunn). 4 But even assuming Gunn applied in that
   realm, we deemed it “implausible” under Gunn’s own analysis that Xitronix
   failed to present a “substantial” patent issue. Id. at 440–43. As a result, we
   transferred Xitronix back to the Federal Circuit. Id. at 444. 5
           So, the question is: does our Xitronix II decision require us to find that
   the transfer in this case is likewise implausible and must be returned to
   sender? We think not. The Walker Process claim here differs from the one in
   Xitronix in an important respect: as the Federal Circuit pointed out, the ’993
   Patent has already been declared unenforceable. See Chandler, 1 F.4th at 1016
   (citing Energy Heating, 889 F.3d at 1302). That marks a key difference from
   Xitronix. There, the claim “concern[ed] a patent that [wa]s currently valid
   and enforceable” and “[t]h[e] litigation [thus] ha[d] the potential to render
   that patent effectively unenforceable.” Xitronix II, 916 F.3d at 441 (emphasis
   added). And that was the primary reason we thought the Federal Circuit had
   erred in its substantiality analysis: unlike the Federal Circuit, we saw a live


           4
             Gunn addressed whether a federal district court had exclusive patent jurisdiction
   over a state-law legal malpractice case arising from a patent infringement suit. See 568 U.S.
   at 253–56; 28 U.S.C. § 1338. The Supreme Court said no, applying its test for federal-
   question jurisdiction under § 1331—i.e., whether the federal issue is “(1) necessarily raised,
   (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without
   disrupting the federal-state balance approved by Congress.” Gunn, 568 U.S. at 258. In
   Xitronix II, we said that “Gunn gave no indication that it meant to alter Christianson or the
   allocation of cases among the circuit courts.” 916 F.3d at 438.
           5
            Although disagreeing with our analysis in Xitronix II, the Federal Circuit found
   our “conclusion that [it had] jurisdiction is not ‘implausible’” because “the underlying
   patent has not expired, and the resolution of the fraud question could affect its
   enforceability.” Xitronix Corp. v. KLA-Tencor Corp. (Xitronix III), 757 F. App’x 1008, 1010
   (Fed. Cir. 2019). So, the court accepted our retransfer. Ibid.




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   “dispute about the validity of the patent at issue” and so a fraud finding in
   the case would “render . . . [the] patent effectively unenforceable in future
   cases.” Id. at 439 (citations omitted).
          Not so here. The ’993 Patent “has already been ruled unenforceable”
   and so “[t]his case will not alter the validity of the ’993 patent.” Chandler, 1
   F.4th at 1018 (citation omitted). Consequently, the merits inquiry “may have
   little or no need to delve into patent law issues,” given Chandler “fail[s] to
   clearly raise any patent law questions not already addressed in Energy
   Heating” and focuses instead on “the nature of Phoenix’s relationship to
   [Hefley’s] inequitable conduct rather than on the conduct before the patent
   office itself.” Id. at 1016; cf. Xitronix II, 916 F.3d at 441 (observing “[t]his
   litigation has the potential . . . to declare the PTO proceeding tainted by
   illegality”).
          In sum, we cannot find the Federal Circuit’s decision implausible.
   That does not mean, we hasten to add, that it is correct. Our precedent
   dictates a different conclusion, namely that a standalone Walker Process claim
   belongs in the Federal Circuit. See Xitronix II, 916 F.3d at 443 (“Patent law
   is a necessary element of Walker Process claims.”). But in circuit-to-circuit
   transfer cases the Supreme Court has admonished us to “adher[e] strictly to
   principles of law of the case” and to reject transfers only in “exceptional”
   instances where the transfer was “clearly erroneous” and not “plausible.”
   Christianson, 486 U.S. at 819. The point of this restraint is to avoid “a
   perpetual game of jurisdictional ping-pong” unworthy of “a seemly system
   of judicial remedies.” Id. at 818–19 (citation omitted). We will engage in no
   unseemly jurisdictional ping-pong here. “While we do not agree with some
   of the legal analysis in the Transfer Order, we nevertheless conclude its
   ultimate conclusion that we have jurisdiction is not ‘implausible.’” Xitronix
   Corp. v. KLA-Tencor Corp. (Xitronix III), 757 F. App’x 1008, 1008–09 (Fed.
   Cir. 2019).



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                                         III.
          On to the merits. The district court granted summary judgment to
   Phoenix on two distinct grounds. First, it found Chandler lacked standing to
   pursue Walker Process and sham patent litigation claims for lost profits.
   Second, while Chandler did have standing to pursue such claims for fees
   spent litigating HOTF’s infringement suit, its claims were time-barred and
   not subject to tolling. Chandler contests both rulings, which we review de
   novo. Ledford v. Keen, 9 F.4th 335, 337 (5th Cir. 2021) (citation omitted).
                                          A.
          First, standing. The district court found a lack of injury-in-fact
   because Chandler failed to prove that HOTF’s 2013 cease-and-desist letter
   materially harmed Supertherm’s business. See Chandler, 2020 WL 1848047,
   at *6–7. We agree with the district court.
          As a threshold matter, antitrust plaintiffs must show “1) injury-in-
   fact, an injury to the plaintiff proximately caused by the defendants’ conduct;
   2) antitrust injury; and 3) proper plaintiff status, which assures that other
   parties are not better situated to bring suit.” Pulse Network, L.L.C. v. Visa,
   Inc., 30 F.4th 480, 488 (5th Cir. 2022) (citations omitted). Only the first
   element is at issue here. Causation is generally a jury question, but if the
   plaintiff fails “to present substantial evidence that [the] defendant’s illegal
   practices were a material cause of plaintiff’s injuries[,]” the court should
   direct a verdict. Taylor Pub. Co. v. Jostens, Inc., 216 F.3d 465, 485 (5th Cir.
   2000) (quoting Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d
   1373, 1383 (5th Cir. 1979)). The plaintiff need not prove the violation was the
   sole cause of the alleged injury, “but he does need to show that the violation
   was a material cause.” Alabama v. Blue Bird Body Co., 573 F.2d 309, 317 (5th
   Cir. 1978) (citing Zenith Radio Corp. v. Hazeltine Rsch., Inc., 395 U.S. 100, 114
   n.9 (1969)). That showing “may not be based on speculation. Rather, the




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   required causal link must be proved as a matter of fact and with a fair degree
   of certainty.” Ibid.
          Chandler argues that the 2013 cease-and-desist letter HOTF sent to
   Amerada Hess cost Supertherm work with Hess and eventually drove
   Supertherm out of business in 2016. As the district court found, however,
   Chandler failed to establish a “causal link” between the letter and
   Supertherm’s demise. Chandler, 2020 WL 1848047, at *7; see Blue Bird Body,
   573 F.2d at 317. After receiving the letter, Hess did not stop working with
   Supertherm, nor did Hess hire HOTF or any of Supertherm’s competitors
   who were licensed to use the ’993 Patent. Chandler, 2020 WL 1848047, at
   *7. Indeed, after Hess notified Supertherm about the letter in 2013, they
   never discussed it again. And while Hess gradually reduced its work with
   Supertherm over the next three years, it hired other vendors who also lacked
   a license for the ’993 Patent. Chandler thus provides no evidence that the
   cease-and-desist letter injured Supertherm’s business with Hess. Chandler
   merely points to a benign follow-up letter Hess sent Supertherm: “Please
   remember that as a contractor to Hess you are expected to hold all rights and
   permissions necessary to . . . perform the services provided.” This tells us
   next to nothing about Hess’s decision-making process, nor does it explain
   why Hess hired other non-licensed contractors in Supertherm’s place. 6




          6
             Also unavailing is Chandler’s reliance on a 2014 email from Phoenix’s lawyer,
   Devan Padmanabhan. Outlining the strategy in suing Chandler for infringement,
   Padmanabhan wrote “this suit would likely prevent Chandler from continuing to sell
   similar heaters to competing entities, thereby providing a competitive advantage in the
   marketplace.” Chandler argues this evidence shows Phoenix had a “plan to drive
   Supertherm from the market,” which “succeeded” when Supertherm went out of business
   in 2016. We disagree. This evidence does nothing to show why Supertherm lost business
   from Hess.




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          It is true, as Chandler points out, that Supertherm’s corporate officers
   testified fear of lawsuits led Supertherm to decline business from other
   prospective customers. But “[w]hen the fact of injury is in issue, the ‘isolated
   self-serving statements’ of a plaintiff’s corporate officers may not provide
   substantial evidence upon which a jury can rely.” H & B Equip. Co. v. Int’l
   Harvester Co., 577 F.2d 239, 247 (5th Cir. 1978) (citations omitted). Instead,
   Chandler “had to establish a tighter connection between [HOTF’s] behavior
   and [Supertherm’s] damages,” Taylor, 216 F.3d at 485, especially in light of
   the fact that “the fluctuating oil market and increase in competition among
   non-licensed fracking providers” were cutting into Supertherm’s business.
   In sum, the district court correctly found a lack of substantial evidence that
   the cease-and-desist letter materially caused Supertherm’s lost profits.
                                          B.
          But the district court did find that Chandler had standing to pursue its
   Walker Process and sham litigation claims seeking the fees it had to spend after
   HOTF asserted the ’993 Patent against Supertherm on December 22, 2014,
   and against the rest of the Chandler plaintiffs on July 18, 2014. Nonetheless,
   the court found these claims time-barred and dismissed them. Chandler says
   this was error, but we again agree with the district court.
          The statute of limitations for antitrust claims is four years. 15 U.S.C.
   § 15b; Acad. of Allergy & Asthma in Primary Care v. Quest Diagnostics, Inc.,
   998 F.3d 190, 196 (5th Cir. 2021). “Generally, a cause of action accrues and
   the statute begins to run when a defendant commits an act that injures a
   plaintiff’s business.” Zenith Radio, 401 U.S. at 338. “[I]f a plaintiff feels the
   adverse impact of an antitrust conspiracy on a particular date, a cause of
   action immediately accrues to him to recover all damages incurred by that
   date . . . .” Id. at 339. At the summary judgment stage, the defendant has the
   burden of demonstrating accrual. In re Beef Indus. Antitrust Litig., 600 F.2d




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   1148, 1170 (5th Cir. 1979). If the defendant establishes the statute of
   limitations has run on the plaintiff’s claims, the burden shifts to the plaintiff
   to show that an exception applies to toll the limitations period. Ibid.
          Chandler sued Phoenix on January 29, 2019. But both of the alleged
   antitrust violations happened more than four years earlier: (1) HOTF sent its
   cease-and-desist letter to Hess on September 11, 2014; and (2) HOTF filed
   its infringement claims against the Chandler parties on July 18, 2014, and
   December 22, 2014. So, the four-year limitations period has run on
   Chandler’s claims unless Chandler can show the period was tolled. Ibid.
          Chandler argues for tolling based only on fraudulent concealment. 7
   Chandler must therefore show: “first, that [HOTF] concealed the conduct
   complained of, and second, that [Chandler] failed, despite the exercise of due
   diligence on [their] part, to discover the facts that form the basis of [their]
   claim.” Texas v. Allan Constr. Co., 851 F.2d 1526, 1528 (5th Cir. 1988)
   (citation omitted); see also In re Beef Indus., 600 F.2d at 1169. The district
   court concluded that, even assuming Chandler could show concealment, it
   did not show its failure to discover the relevant facts despite due diligence.
          As the district court pointed out, Chandler’s lawyer “was in regular
   communication with . . . Energy Heating’s counsel” in the Energy Heating
   litigation. Chandler’s privilege log shows fifty-three emails with Energy
   Heating’s lawyer. And Chandler’s counsel confirmed they “certainly
   reviewed [the] work” of Energy Heating’s counsel. This presents an
   insurmountable problem for Chandler. On December 4, 2014—outside the
   four-year limitations period—Energy Heating amended its complaint to


          7
              We have recognized three exceptions for tolling the limitations period:
   (1) fraudulent concealment; (2) damages not initially ascertainable; and (3) continuing
   violation. In re Beef Indus., 600 F.2d at 1169; Kaiser Aluminum & Chem. Sales, Inc. v.
   Avondale Shipyards, Inc., 677 F.2d 1045, 1051–52 (5th Cir. 1982).




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   provide detailed allegations of HOTF’s inequitable conduct in procuring the
   ’993 Patent. Given Chandler’s close relationship with Energy Heating’s
   counsel, Chandler cannot credibly argue it “exercise[d] . . . due diligence”
   and yet failed to discover HOTF’s inequitable conduct. In re Beef Indus., 600
   F.2d at 1169. The raw facts of that conduct were pleaded in a complaint—
   one that Chandler’s counsel had every reason to know about—outside the
   limitations period. 8 All Phoenix must show at summary judgment is that
   Chandler “had access to information that would independently verify th[ose]
   allegations.” Allan Constr., 851 F.2d at 1533. Phoenix has done so here.
   Chandler cannot escape its “duty to investigate” when it “learned of facts
   ‘calculated to excite inquiry.’” In re Beef Indus., 600 F.2d at 1171 (quoting
   Clement A. Evans & Co. v. McAlpine, 434 F.2d 100, 102 (5th Cir. 1970)).
           Chandler argues this was error because the facts alleged in Energy
   Heating’s complaint were “susceptible to opposing inferences.” In other
   words, the Energy Heating Litigation could have gone the other way on
   Hefley’s deceptive intent in procuring the ’993 Patent. Chandler
   misunderstands the tolling inquiry. The question is not when Chandler
   would have a definitive judicial resolution of Hefley’s conduct, but whether
   Chandler was on notice of facts suggesting a potential claim. Chandler was.
   See, e.g., Prather v. Neva Paperbacks, Inc., 446 F.2d 338, 341 (5th Cir. 1971)




           8
             Moreover, in the HOTF-Chandler litigation in the Northern District of Texas,
   Newco and Chandler asserted the on-sale bar as a basis for the ’993 Patent’s invalidity.
   That assertion appeared in a document filed on October 27, 2014—four years and three
   months before the filing of the complaint in this case. Chandler’s patent attorney would
   later confirm in a 2020 deposition that the contention of invalidity was based on Hefley’s
   use of the invention for more than a year before the application. This evidence further
   confirms that Chandler knew about the underlying facts of this antitrust case outside the
   four-year limitations period.




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Case: 21-10626        Document: 00516432408              Page: 14       Date Filed: 08/15/2022




                                          No. 21-10626


   (“Once [the] plaintiff is on inquiry that it has a potential claim, the statute
   can start to run.” (citation omitted)).
           Because the district court correctly ruled that tolling does not apply,
   Chandler’s claims are time-barred. 9
                                               IV.
           The district court’s judgment is AFFIRMED.




           9
               We therefore do not consider the district court’s alternative ruling that neither
   Phoenix nor Fisher can be held liable under single-enterprise or corporate-officer standards
   of liability for HOTF’s alleged antitrust violations.




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