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Argentum Medical, LLC v. Noble Biomaterials

May 21, 2009

ARGENTUM MEDICAL, LLC, PLAINTIFF,
v.
NOBLE BIOMATERIALS, AND DERMA SCIENCES, INC., DEFENDANTS.



The opinion of the court was delivered by: Richard Caputo United States District Judge

(JUDGE CAPUTO)

MEMORANDUM

Presently before the Court is Plaintiff Argentum Medical's "Motion to Strike Answer to Amended Complaint, Counterclaim, or in the Alternative, Motion to Dismiss Counterclaims Against Gregg Silver and Thomas Miller." (Doc. 112.) For the reasons detailed below, the Court will deny Argentum's motion to strike and alternative motion to dismiss Noble's counterclaims.

The Court has jurisdiction in this matter pursuant to 28 U.S.C. §§ 1331 and 1338.

BACKGROUND

The current case arises under the Patent Laws of the United States and was initiated by Plaintiff Argentum Medical, LLC ("Argentum") against Defendant Noble Biomaterials ("Noble") and Defendant Derma Sciences, Inc. ("Derma") in the Northern District of Illinois on December 3, 2007. (Compl., Doc. 1.) The Plaintiff, Argentum, is a limited liability company organized and existing under the laws of the State of Delaware with a principal place of business in Willowbrook, Illinois. (Doc 1 ¶ 2.) Argentum makes and sells, under the trade name SILVERLON, a silver-coated nylon wound and burn dressing covered by United States Patent Number 7,230,153 ("the '153 Patent"). (Doc. 113 at 1.) Defendant Noble is a corporation organized and existing under the laws of the State of Delaware with a principal place of business in Scranton, Pennsylvania. (Doc. 1 ¶ 3) Noble is in the business of manufacturing fibers microscopically coated in silver and other noble metals, and has sold these metalized fibers under the trade name X-STATIC for a number of years. (Doc. 117, at 2.) In 2005, Noble began producing and selling wound dressings and burn care products from X-STATIC fibers, selling these products under the trade name SILVERSEAL. (Id. at 4.) Defendant Derma is a corporation organized and existing under the laws of the State of Pennsylvania with a principal place of business in Princeton, New Jersey. (Doc. 1 ¶ 4.) Derma is a distributor of certain medical products, including products manufactured by Noble and marketed under the X-STATIC and SILVERSEAL trade names. (Doc. 56, Ex. A; Doc. 117, at 5.)

On April 21, 2008, Argentum filed an Amended Complaint bringing four (4) counts against the Defendants. (Am. Compl., Doc. 45.) Count I of the Amended Complaint alleged a patent infringement claims against Defendants Noble and Derma. Count II alleged a false designation of origin claim against Derma. Counts III and IV alleged state law claims for deceptive trade practices and tortious interference with a prospective economic advantage.

On May 12, 2008 Noble moved to dismiss Count I of Argentum's Amended Complaint pursuant to Federal Rules of Civil Procedure 12(b)(2), 12(b)(3), and 12(b)(6) or, in the alternative, transfer the case to the Middle District of Pennsylvania. (Doc. 46.) On May 16, 2008, Derma filed a Third Party Complaint against Noble, (Doc. 56), along with a separate motion to transfer this case to the Middle District of Pennsylvania or, in the alternative, stay the proceedings with respect to Derma pending resolution of Argentum's patent infringement claim against Noble (Doc. 57). On June 23, 2008, the Hon. George W. Lindberg found that Argentum had not provided evidence that Noble had "(1) sold or distributed the allegedly infringing products in Illinois, (2) knew that Illinois was the likely destination of the allegedly infringing products, or (3) took any action with respect to the allegedly infringing products that was purposefully directed toward Illinois" and had, "therefore failed to establish a prima facie case of personal jurisdiction." (Doc. 73, at 4.) Judge Lindberg, accordingly dismissed Count I as to Noble for lack of personal jurisdiction. (Id.) Judge Lindberg also found that "the factors argued by the parties establish that party and witness convenience would be better served . . ." and that "the interest of justice [would be] served by transferring this case to the Middle District of Pennsylvania." (Id., at 5-6.) The case was, accordingly, transferred to this Court on July 8, 2008. (Doc. 75.)

After obtaining the Court's leave to amend and add a party, Argentum filed its Second Amended Complaint on September 4, 2008, re-adding Noble to this case. (Doc 89.) On November 12, 2008, Noble filed its Answer to Argentum's Second Amended Complaint, also providing affirmative defenses and stating counterclaims against Argentum and two of its managers, Thomas Miller and Gregg Silver. (Doc. 102.) On December 1, 2008, Argentum filed its Answer to Derma Services' Counterclaim. (Doc. 105) On January 27, 2009, Argentum filed the current motion, requesting that this Court either strike or dismiss Noble's counterclaims against Miller and Silver (Doc. 112) along with a corresponding Brief in Support (Doc. 113). Noble filed a corresponding Brief in Opposition (Doc. 117) on February 18, 2009, and Argentum filed its Reply Brief (Doc. 122) on March 18, 2009. Thus, the Court finds that the current motion has been fully briefed and is currently ripe for disposition.

LEGAL STANDARD

A motion pursuant to Rule 12(b)(2) "is inherently a matter which requires resolution of factual issues outside the pleadings." Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 66, n.9 (3d Cir. 1984). When a defendant raises the question of whether the district court has personal jurisdiction over that defendant, the plaintiff bears the burden of showing personal jurisdiction exists. GE v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001); Mellon Bank (East) PSFS, Nat 'l Assn v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). A plaintiff may meet this burden by "establishing with reasonable particularity sufficient contacts between the defendant and the forum state." Farino, 960 F.2d at 1223 (internal quotation omitted.) However, the plaintiff may not rest solely on its pleadings to satisfy this burden. Red Square Corp. v. Novik, Inc., CA No. 07-498, 2007 U.S. Dist. LEXIS 56217, *6 (W.D. Pa. Aug. 2, 2007) (citing Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992)). "General averments in an unverified complaint or response without the support of 'sworn affidavits or other competent evidence' are insufficient to establish jurisdictional facts." Vector Security, Inc. v. Corum, CA No. 03-741, 2003 U.S. Dist. LEXIS 6573, *2 (E.D. Pa. Mar. 21, 2003) (quoting Time Share Vacation Club, 735 F.2d at 66, n.9); see also Farino, 960 F.2d at 1223. Otherwise, for purposes of deciding the motion to dismiss, this Court must "accept the plaintiff's allegations as true, and . . . construe disputed facts in favor of the plaintiff." Toys 'R' Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir. 2003) (citation omitted.)

If the plaintiff is successful in demonstrating that jurisdiction "comport[s] with fair play and substantial justice," the defendant must subsequently "present a compelling case that. . .render [s] jurisdiction unreasonable." Miller Yacht Sales, Inc. v. Smith, 384 F. 3d 93, 97 (3d Cir. 2004) (quoting Burger King Corp, v. Rudzewicz, 471 U.S. 462, 476-477 (1985)). Determining the reasonableness of exercising jurisdiction requires the court to consider several factors, e.g., 'the burden on the defendant, the forum state's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interest of the interstate judicial system in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies." Burger King, 471 U.S. at 477; Farino, 960 F.2d at 1222.

DISCUSSION

I. Argentum's Motion to Strike Noble's Counterclaims Against Miller and Silver

In its brief in support of the current motion, Argentum states that "[o]n their face, Noble's 'counterclaims' as against Silver and Miller are improper under the Federal Rules of Civil Procedure." (Doc. 113, at 5.) Argentum supports this statement by arguing that "neither Silver nor Miller is an 'opposing party' within the meaning of Rule 13. . ." and that Rule 13(h) "requires more than Noble's filing counterclaims . . . [because] the Court must determine if joinder of such parties, under Rules 19 or 20, is proper." (Id.) In response, Noble argues that "[t]he Federal rules have not required a party. . . to obtain leave of court to join counterclaim defendants in the last 43 years. . .." (Doc. 117, at 7.)

The District Court for the Eastern District of Pennsylvania was presented similar arguments in Neyer, Tiseo & Hindo, Ltd. V. Russell, No. 92-2983, 1993 U.S. Dist. LEXIS 2738 (E.D. Pa. March 2, 1993). The Neyer court reviewed decisions from numerous district courts, noting that, in some jurisdictions, "practice apparently continues to contemplate an order to join additional parties. . .." Neyer, 1993 U.S. Dist. LEXIS 2738, at *8-9 (citing Mountain States Sports, Inc. v. Sharman, 353 F. Supp. 613, 618 (D. Utah 1972)). The Court also observed that several courts have held that "leave of the court was not required to join an additional party pursuant to Rule 13(h). . . based. . . on the fact that the 1966 revision of Rule 13(h) dropped the words that 'the court shall order additional parties to be brought in' and thus eliminated the need to obtain leave of the court to bring in new parties." Id. at *9 (citing Northfield Ins. Co. v. Bender Shipbuilding & Repair Co., 122 F.R.D. 30, 31 (S.D. Ala. 1988); Vermont Castings, Inc. v. Evans Products Co., Grossman's Div., 510 F. Supp. 940 (D.Vt. 1981)). The Neyer court also noted that these prior decisions had "held that eliminating the need to obtain leave complied with the spirit of the Federal Rules of Civil Procedure by eliminating unnecessary motions." Id. On the basis of its review, the Neyer court held that

[t]he fact that some courts continue to comport with the practice of filing a motion for joining additional parties does not elevate that practice to a rule requirement. Instead, this court is persuaded by the spirit of the Federal Rules to eliminate unnecessary motions and by those courts that have held that Rule 13(h) does not require leave of the court to join additional parties.

Id., at *10. The Court agrees with the Neyer court's analysis, will apply it in the current case, and will not strike the counterclaims against Miller and Silver for failure of Noble to ...


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