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Amerisourcebergen Drug Corporation v. Ciolino Pharmacy Wholesale Distributors

May 24, 2011

AMERISOURCEBERGEN DRUG CORPORATION, PLAINTIFF,
v.
CIOLINO PHARMACY WHOLESALE DISTRIBUTORS, LLC, ET AL., DEFENDANTS.



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

MEMORANDUM OPINION

Plaintiff, AmerisourceBergen Drug Corporation, has initiated this breach of contract and unjust enrichment action against Defendants, Ciolino Pharmacy Wholesale Distributors, LLC, and Ciolino Pharmacy, Inc., alleging that the Defendants failed to pay for pharmaceuticals they ordered in December 2008. Presently before the Court is Defendants' "Motion to Dismiss for Lack of Jurisdiction and Improper Venue, and Motion to Partially Dismiss for Failure to State a Claim Upon which Relief can be Granted" (Doc. No. 8). For the following reasons, Defendants' motion will be granted.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff, AmerisourceBergen Drug Corporation (ABDC), is a supplier of medical and pharmaceutical products. ABDC is incorporated in Delaware and has its principal place of business in Pennsylvania. Defendant, Ciolino Pharmacy Wholesale Distributors, LLC, is a Louisiana limited liability company, which distributes pharmaceuticals in Metaire, Louisiana. Defendant, Ciolino Pharmacy, Inc., is a Louisiana corporation that operates several retail pharmacies, also in Metaire, Louisiana. (Compl. ¶¶ 1-6.) Steven Ciolino is the president and owner of both companies.

On December 9, 2008, Plaintiff and Defendants entered into a "Credit Application and Credit Agreement" (Credit Agreement), wherein the Defendants agreed to purchase pharmaceuticals from Plaintiff on credit. The Credit Agreement included a "Consent to Jurisdiction" provision, providing that "in any lawsuit initiated by ABDC against [the Defendants]," each party "irrevocably consent[s] to the exclusive jurisdiction of the United States District Court for the Eastern District of Pennsylvania," or any Pennsylvania state court sitting in Chester County, and that Defendants "waive[] any objection to improper venue."*fn1 The Credit Agreement also, however, included a provision allowing for written modification by the parties. See (Compl., Exs. A, B.)

On December 15, 2008, Defendant, Ciolino Pharmacy Wholesale Distributors, LLC, forwarded Plaintiff a separate "Supply Agreement[,]" which was signed by all parties. The Supply Agreement did not contain a forum selection clause and importantly provided that "[t]his Agreement supercedes prior oral or written agreements by the parties that relate to its subject matter other than the security interest, which is in addition to and not in lieu of any security interest created in other agreements." See (Compl. ¶¶ 8-11, Exs. A-C.)

On August 23, 2010, Plaintiff filed this action in the Court of Common Pleas of Chester County, Pennsylvania, alleging breach of contract and unjust enrichment. On September 29, 2010, Defendants removed the case to this Court, invoking diversity jurisdiction. (Doc. No. 1.) On October 26, 2010, Defendants filed a motion to dismiss.

II. STANDARD OF REVIEW

In evaluating a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the court must determine whether the plaintiff has set forth sufficient facts to establish a prima facie case of personal jurisdiction, accepting all of plaintiff's allegations as true and construing all disputed facts in plaintiff's favor. See Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368-69 (3d Cir. 2002). Motions to dismiss on the basis of improper venue under Rule 12(b)(3), alternatively, require the court to determine whether the forum is a fair and convenient place for trial.*fn2 Cottman Transmission Servs., Inc. v. Martino, 36 F.3d 291, 294 (3d Cir. 1994).

A defendant may consent to personal jurisdiction and venue pursuant to a valid forum selection clause. See Gandalf Systems Corp. v. Tri-Tek Information Systems and Services, 1992 WL 172596 at **2-3 (E.D.Pa. Jul. 13, 1992); Super 8 Worldwide, Inc. v. KNR Hotels, LLC, 2009 WL 4911942 at **2-3 (D.N.J. Dec. 11, 2009).

III. DISCUSSION

Defendants move to dismiss Plaintiff's complaint under Federal Rule of Civil Procedure 12(b)(2) and 12(b)(3), asserting that this Court lacks personal jurisdiction and that the Eastern District of Pennsylvania is an improper venue.*fn3 Although a forum selection clause was contained in the parties' Credit Agreement, Defendants assert that the clause was superceded by the terms of the Supply Agreement and is therefore invalid. Defendants further contend that Plaintiff has failed to otherwise sustain its burden to prove a prima facie case of personal jurisdiction. Plaintiff responds that the forum selection clause was not superceded by the Supply Agreement and Defendants, therefore, have no basis to challenge either jurisdiction or venue.

As noted supra, the Supply Agreement expressly "supercedes prior oral or written agreements by the parties that relate toits subject matter," with the exception of any "security interest created in other agreements." This superceding language necessarily includes the prior Credit Agreement because the "subject matter" of that agreement is, like the Supply Agreement, the sale of pharmaceuticals. According to the controlling Supply Agreement, the only aspect not superceded is "security interest created in other agreements[,]" which has nothing to do with jurisdiction or forum selection. We therefore conclude that the Supply Agreement invalidated the forum selection clause contained in the Credit Agreement.

Plaintiff disagrees and argues that the "supercedes" provision preserved every portion or clause of the Credit Agreement that was not related to the "subject matter" of the Supply Agreement. Plaintiff asserts that because the Credit Agreement's jurisdictional language was not included in the "subject matter" of the Supply Agreement, this clause is not superceded and remains in effect. There are several problems with this argument. First, the Supply Agreement could have, but does not reference or incorporate the Credit Agreement in any way. Second, with the exception of "security interest created in other agreements[,]" the ...


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