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Health-Robotics, LLC v. Bennett

June 16, 2009

HEALTH ROBOTICS, LLC, HEALTH ROBOTICS NORTH AMERICA, LLC, HR INVESTORS, LLC, JACK RISENHOOVER, AND PETER CAMP, PLAINTIFFS,
v.
JOHN A. BENNETT, DEVON ROBOTICS, LLC, DEVON INTERNATIONAL GROUP, AND: DEVON MEDICAL, INC., DEFENDANTS.



The opinion of the court was delivered by: Joyner, J.

MEMORANDUM AND ORDER

This dispute has been brought before the Court on motion of Defendants to dismiss Plaintiffs' Complaint for improper venue pursuant to Fed. R. Civ. P. 12(b)(3) and for failure to state a cause of action pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons articulated below, Defendants' Motion to Dismiss for Improper Venue (Doc. No. 20) shall be denied.

Background*fn1

According to the allegations contained in the Complaint, in the Spring of 2008, Plaintiffs had an exclusive agreement with a third party Italian company, Health-Robotics, Srl ("Italian company"), to distribute the CytoCare robot*fn2 in North America and other small territories. Plaintiffs also held exclusive options, up to certain dates, to negotiate obtaining the rights from the Italian company for the exclusive distribution of i.v. Station*fn3 and CytoCare for monoclonal antibodies. Based on orders received within six (6) months of the announcement of this technology, Plaintiffs expected i.v. Station to generate significant revenue. Plaintiffs hired Defendants to serve as their agents in Plaintiffs' negotiations with the Italian company to obtain the exclusive distribution rights for i.v. Station and CytoCare for monoclonal antibodies.

After this relationship was formed, Plaintiffs disclosed trade secrets and other confidential information to Defendants with the belief that Defendants would use that information to act in the best interest of Plaintiffs in the negotiations. Without Plaintiffs' knowledge, Defendants allegedly used the confidential information to their own benefit and to harm Plaintiffs by secretly negotiating with the Italian company to become the exclusive distributor of the CytoCare robot, i.v. Station, and CytoCare for monoclonal antibodies.

In October 2008, the Italian company informed Plaintiffs of its intention to terminate its past agreement with Plaintiffs unless Plaintiffs and Defendants reached an agreement that allowed Defendants to obtain exclusive rights to the CytoCare technologies. Plaintiffs allege this action taken by the Italian company was a direct result of Defendants' actions. On October 31, 2008, the parties reached an agreement ("Agreement") to the satisfaction of the Italian company. The Agreement terminated Plaintiffs' prior contracts with the Italian company, transferred the rights to the CytoCare technologies to Defendants, and stipulated to the compensation that Defendants must provide to Plaintiffs for accepting the Agreement. The Agreement also contains a forum selection clause that states that any dispute arising out of the Agreement must be litigated in Montgomery County in the Commonwealth of Pennsylvania.

On February 13, 2009, Plaintiffs commenced suit against Defendants in the United States District Court for the Eastern District of Pennsylvania alleging breach of contract, breach of fiduciary duty and tortious interference with actual and prospective contractual relations arising out of Defendants' using confidential information to negotiate secret agreements for themselves instead of Plaintiffs. In response to this, Defendants filed a Motion to Dismiss the Complaint for improper venue and failure to state a claim upon which relief could be granted on March 5, 2009, claiming that the forum selection clause covers Plaintiffs' Complaint.*fn4 On March 23, 2009, Plaintiffs filed their First Amended Complaint in which they retracted their breach of contract claim but still alleged both breach of fiduciary duty and tortious interference.*fn5 On March 30, 2009, Defendants filed a Motion to Dismiss Plaintiffs' First Amended Complaint for improper venue and for failure to state a claim upon which relief may be granted.*fn6

This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §1332.

Standards

Although as a general rule motions to dismiss for improper venue are entertained under Fed. R. Civ. P. 12(b)(3), the Third Circuit has held that dismissal under Rule 12(b)(6) is proper where a forum selection clause designates another court as the exclusive venue for litigation. See Salovaara v. Jackson Nat'l Life Ins. Co., 246 F.3d 289, 298-99 (3d Cir. 2001); Integrated Health Res., LLC v. Rossi Psychological Group, 537 F. Supp. 2d 672, 674 (D. N.J. 2008). Traditionally, when deciding a Rule 12(b)(3) motion to dismiss for improper venue, a court must accept as true the allegations in the complaint, although the parties may submit affidavits to support their positions. Leone v. Cataldo, 574 F.Supp. 2d 471, 483 (E.D. Pa. 2008). In a motion to dismiss for improper venue, the defendant, as the moving party, bears the burden of showing that venue is improper. Id. (citing Myers v. Am. Dental Ass'n, 695 F.2d 716, 724 (3d Cir. 1982); Cumberland Truck Equip. Co. v. Detroit Diesel Corp., 401 F. Supp. 2d 415, 418 (E. D. Pa. 2005)).

Similarly, in evaluating a motion to dismiss under Fed. R. Civ. P. 12(b)(6), we "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)(citations omitted). To survive a motion to dismiss, a civil plaintiff must allege facts that "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007). In other words, the plaintiff must provide "enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element[s]" of a particular cause of action and show "that the pleader is entitled to relief, in order to give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Phillips, 515 F.3d at 233-34 (quoting Twombly, 127 S.Ct. at 1964). In ruling on a Rule 12(b)(6) motion to dismiss, the court may consider documents "integral to or explicitly relied upon in the complaint." In re Rockefeller Ctr. Props., Inc. Sec. Litig., 184 F.3d 280, 287 (3d Cir. 1999).

Discussion

Motion to Dismiss for Improper Venue

When forming a contract, parties have the option to select, in advance of litigation, the forum and law under which any disputes arising will be settled. Botman Int'l, B.V. v. Int'l Produce Imps., Inc., 205 Fed. Appx. 937, 941, 2006 U.S. App. LEXIS 27114, at *9 (3d Cir. 2006). Typically, these forum selection clauses are treated as ordinary contract provisions and are subject to the ordinary rules of contract interpretation. See M/S Bremen v. Zapata Offshore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed. 2d 513 (1972); John Wyeth & Brother, Ltd. v. CIGNA Int'l Corp., 119 F.3d 1070, 1074 (3d Cir. 1997). The first step in analyzing a forum selection clause is to determine whether it states the parties' intentions unambiguously. Wyeth, 119 F.3d at 1074. An unambiguous clause is one that is reasonably capable of only one construction. Landtect Corp. v. State Mutual Life Assurance Co., 605 F.2d 75, 80 (3d Cir. 1979) (citing Gerhat v. Henry Disston & Sons, 290 F.2d 778, 784 (3d Cir. 1961)). When considering unambiguous clauses in a contract, the Court need only look at the writing itself to determine the parties' understanding. Vaccarello v. Vaccarello, 757 A.2d 909, 914, 563 Pa. 93 (Pa. 2000) (quoting Carosene v. Carosene, 688 A.2d 733, 735, ...


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