ATM Company Sanctioned For ‘Objectively Frivolous’ Claim

 Law360 (April 3, 2025, 4:51 PM EDT) — A Georgia federal judge on Wednesday tossed an attempt to relitigate a patent infringement suit brought by an ATM technology company against a competitor, and sanctioned its attorneys for bringing the “objectively frivolous” claim that the competitor defrauded the court in a previous suit.

Handing an early win and attorney fees to NCR Voyix Corp., an Atlanta-based financial technology firm, U.S. District Judge Timothy Batten of the Northern District of Georgia ruled that a suit filed against the company by Capital Security Systems Inc. and alleging “fraud on the court” had “no reasonable chance of success,” which its attorneys should have known when they filed it.

The judge went on to find that the suit was a “back-door attempt” to revisit claims in a prior suit where Capital Security claimed that NCR infringed four of its patents, only to have the patents invalidated when it was found in default.

“CSS fails to provide clear and convincing evidence of the existence of a fraud. Instead, its amended complaint is rife with conclusory allegations,” Judge Batten said, which “fail to meet the high bar required to sustain a viable claim of fraud on the court.”

The order went on to give NCR’s counsel with Robbins Alloy Belinfante Littlefield LLC one week to file an accounting of its attorney fees, which Judge Batten intends to order Capital Security’s attorneys Samuel S. Woodhouse III and Stephen Michael Lobbin to pay.

The NCR-Capital Security spat, according to Judge Batten’s order, is just the latest in a series of lawsuits between the two producers of financial technology. In 2014, Capital Security first sued NCR in Georgia federal court, alleging that the later company ripped off four patents for check-scanning technology used in s.

NCR responded with a counterclaim that the patents were unenforceable, eventually prevailing by default after Capital Security’s counsel withdrew and the company never hired new attorneys, per the order.

Capital Security’s owner, Robin Gustin, then sued NCR again in 2019, this time in Florida, claiming that NCR lied about its alleged patent infringement in the first case and asserting $500 million in damages. But that claim also came up short and was dismissed later that year, with the decision upheld by the 11th Circuit.

In the latest suit, Capital Security again alleged that NCR had lied to the court in the original Georgia case, purportedly claiming in a deposition that one of the technologies at issue didn’t exist despite evidence to the contrary. That misrepresentation, Capital Security said, amounted to a fraud upon the court and was enough to strike the judgment in the underlying claim.

NCR, however, responded with a motion arguing that not only was Capital Security’s latest claim barred by res judicata, but that the complaint was rife with “unfounded conspiracy theories.”

“The amended complaint is an impermissible attack on a final judgment of this court. It is a frivolous waste of judicial resources, was filed solely for the purposes of vexation and harassment, and should subject plaintiff and its counsel to sanctions,” NCR said. “At the very least, it must be summarily dismissed.”

“Further, this is yet another example in a long history of sanctionable conduct by Mr. Lobbin, who has repeatedly faced sanctions as a result of his questionable litigation tactics,” the company added in a separate motion for sanctions, alleging that Lobbin had been hit with sanctions totaling more than $130,000 in a previous New York action.

Judge Batten agreed with those arguments in this week’s order, writing that Capital Security had its chance to allege fraud by NCR when it filed the Florida case.

“Had CSS’s counsel made a reasonable inquiry into the law, they would have realized that CSS could not now bring that claim or have the court reconsider its prior ruling in the underlying action,” the judge said. “This claim was based upon a legal theory that had no chance of success under existing law.”

In an email to Law360, Lobbin, counsel for Capital Security, said his client was “disappointed in the court’s decision” and disputed the finding that the claims could have been pressed in the prior Florida action.

“In its pursuit of justice in good faith, which is never easy against a well-resourced opponent, neither CSS nor its attorneys ever presented any position in bad faith,” Lobbin said.

Counsel for NRC didn’t respond to a request for comment.

Capital Security is represented by Stephen Michael Lobbin of SML Avvocati PC and by Samuel S. Woodhouse III of the Woodhouse Law Firm.

NCR is represented by Rachel Frazier Gage of Robbins Alloy Belinfante Littlefield LLC.

The case is Capital Security Systems Inc. v. NCR Voyix Corp., case number 1:23-cv-04691, in the

U.S. District Court for the Northern District of Georgia.

–Editing by Karin Roberts.

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Update: This story has been updated with comment from Capital Security’s counsel.

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