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First Quality Baby Products, LLC v. Kimberly-Clark Worldwide

June 15, 2009

FIRST QUALITY BABY PRODUCTS, LLC PLAINTIFF
v.
KIMBERLY-CLARK WORLDWIDE, INC., DEFENDANT



The opinion of the court was delivered by: William W. Caldwell United States District Judge

MEMORANDUM

I. Introduction

Plaintiffs First Quality Baby Products, LLC, First Quality Products, Inc., and First Quality Retail Services, LLC (collectively "First Quality") brought this action against Defendant Kimberly-Clark Worldwide, Inc. ("K-C") on February 25, 2009, seeking a declaratory judgment that their products do not infringe U.S. Patent No. 5,496,298 ("the '298 patent"), and/or that the '298 patent is invalid or unenforceable. Upon careful review of the briefs and the submissions of the parties, we will grant Defendant's motion to dismiss for lack of subject matter jurisdiction.

II. Background

First Quality is a private label manufacturer of diapers with its primary place of business in Lewistown, Pennsylvania. In its complaint, First Quality alleges it has offered for sale a new diaper product that has elastic ears with non-parallel sides. As of the date of its complaint, First Quality's new diaper product was in production and limited to a trial volume being sold by one retailer. An unrestricted launch of the new product was expected to occur in or about March of 2009.

In anticipation of being sued by K-C, the holder of the '298 patent, First Quality filed this declaratory judgment action seeking a declaration that its products do not infringe the '298 patent, and/or that the '298 patent is invalid or unenforceable. In response to the complaint, K-C filed the instant motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rules of Civil Procedure 12(b)(1), claiming that First Quality has not shown that an "actual controversy" existed at the time of the filing of its complaint. First Quality responded by filing an "Amended Complaint" alleging additional facts and new causes of action for declaratory judgment.*fn1

III. Discussion

A. Standard of Review

"'A motion to dismiss under Rule 12(b)(1) challenges the jurisdiction of the court to address the merits of the plaintiff's complaint.'" Vieth v. Pennsylvania, 188 F.Supp.2d 532, 537 (M.D. Pa. 2002)(quoting Ballenger v. Applied Digital Solutions, Inc., 189 F.Supp.2d 196, 199 (D.Del. 2002). The motion should be granted where the asserted claim is "'insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy.'" ORG, Ltd. v. Nartron Corp., 513 F.Supp.2d 149, 151-52 (M.D. Pa. 2007)(citing Coxson v. Pennsylvania, 935 F.Supp. 624, 626 (W.D. Pa. 1996)).

A motion to dismiss pursuant to Rule 12(b)(1) may be treated as either a facial or factual challenge to the court's subject matter jurisdiction. Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). When evaluating a factual attack, the court may consider evidence outside the pleadings. Gould Elecs. Inc., 220 F.3d at 176. The Plaintiff bears the burden of proving that jurisdiction exists. Edmunds Holding Co. v. Autobytel Inc., 598 F.Supp.2d 606, 608 (D.Del. 2009).

K-C is mounting a factual attack to jurisdiction. See Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993)("If the...motion denies or controverts the pleader's allegations..., the movant is deemed to be challenging the factual basis for...subject matter jurisdiction."). In support of its motion, K-C submitted a declaration by its vice president and chief counsel of litigation, Kyle K. Kappes. Mr. Kappes stated (1) neither he, nor anyone at K-C, had assessed whether First Quality's product infringed "any of K-C's patents because, prior to receipt of the samples [on March 4, 2009], K-C had not seen the product;" and (2) that "K-C had no communication with First Quality regarding any threat of enforcement of the '298 patent, any issues relating to the technology claimed in the '298 patent, or any threat of litigation against First Quality relating to its diaper product." Declaration of Kyle K. Kappes, at ¶¶ 7 and 9.

As K-C is factually attacking jurisdiction, the allegations in the complaint are not controlling. Id. "Only uncontroverted factual allegations are accepted as true." Id. Thus, the burden is on First Quality to produce sufficient evidence to establish subject matter jurisdiction. See Panavise Prods., Inc. v. National Prods., Inc, 306 F.App'x 570, 572 (Fed. Cir. 2009).

B. Declaratory Judgment

"The Declaratory Judgment Act provides that, '[i]n a case of actual controversy within its jurisdiction...any court of the United States...may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sough." MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007)(citing 28 U.S.C. ยง 2201(a))(emphasis added). The party claiming declaratory judgment jurisdiction has the burden of establishing that jurisdiction "existed at the time the claim for ...


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