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After oral argument before The Honorable Michael A. Chagares, The Honorable Kent A. Jordan, and The Honorable Julio M. Fuentes, the United States Court of Appeals for the Third Circuit by Opinion entered in Encompass Insurance Co. v. Stone Mansion Restaurant Inc., No. 17-1479 (3d Cir. August 22, 2018) upheld the practice of snap removal after finding that (1) the language of 28 U.S.C. § 1441(b)(2) is unambiguous and [i]ts plain meaning precludes removal on the basis of in-state citizenship only when the defendant has been properly joined and served”; and (2) the interpretation permitting snap removal does not defy rationality or render the statute nonsensical or superfluous. Id. at * 8-13.

The Court recognized that the result of the practice may be peculiar to the extent that it allows defendants to use pre-service machinations to remove a case that it otherwise could not when the forum defendant rule applies; however, “the outcome is not so outlandish as to constitute an absurd or bizarre result.” Id. at *13. The Court also recognized that “[r]easonable minds might conclude that the procedural result demonstrates a need for change in the law; however, if such change is required, it is Congress – not the Judiciary – that must act.” Id. at *13.

A copy of the Opinion is attached.

Fox Rothschild LLP congratulates its partner, Greg Williams, for being included on the 2018 list of the “Most Influential Black Lawyers” by Savoy Magazine. This was Greg’s second time being selected to the prestigious list.

Greg is a trailblazer, trial attorney and litigator at Fox Rothschild LLP with more than 23 years of experience representing clients in business, intellectual property and real estate litigation. Greg is a former President of the Delaware State Bar Association, a former President of the Barristers’ Association of Philadelphia, Inc., and former Chair and member of the Delaware Judicial Nominating Commission. Greg also is the former Office Managing Partner of Fox Rothschild’s Wilmington Office and was the first African-American to serve as an Office Managing Partner and the first African-American to serve as a Member of the firm’s Executive Committee – the firm being more than 100 years old.

As author of the firm’s Delaware Intellectual Property Litigation blog, Greg analyzes and discusses intellectual property decisions rendered by the U.S. District Court for the District of Delaware.

Greg is a graduate of Villanova University School of Law and Millersville University.

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The Honorable Colm F. Connolly and The Honorable Maryellen Noreika both were sworn in as District Judges on the United States District Court for the District of Delaware this week.  They became the 26th and 27th individuals in the history of the Court to be appointed as District Judges.

The Court announced that Judges Connolly and Noreika will begin to be assigned new cases on August 15, 2018.  The Court will be eliminating the Vacant Judgeship (“VAC”) docket.  VAC cases that are currently assigned to a Magistrate Judge without consent of the parties to the jurisdiction of the Magistrate Judge will be reassigned to a District Judge – primarily Judges Connolly and Noreika.  The Court also will be phasing out the regular assignment of cases to Visiting Judges.  Cases that are currently assigned to a Visiting Judge will remain with the assigned Visiting Judge or may be reassigned to a Delaware District Judge – primarily Judges Connolly and Noreika.

The Court also announced that Senior Judge Sleet will be retiring from the bench at the end of September.  All cases assigned to Judgle Sleet (“GMS”) will be reassigned primarily to Judges Connolly and Noreika by a date on or around Judge Sleet’s retirement.  With the addition of Judges Connolly and Noreika, the Court is back to full strength.

A full copy of the Court’s Announcement is attached hereto.

By Memorandum Opinion entered by The Honorable Gregory M. Sleet in SurgiQuest v. Lexion Medical, LLC., Civil Action No. 14-382-GMS (D.Del. May 16, 2018), the Court denied Plaintiff/Counterclaim-Defendant SurgiQuest’s renewed motion for judgment as a matter of law (“JMOL Motion”) on the jury’s verdict which found that SurgiQuest had engaged in false and misleading advertising and unfair competition in violation of the Lanham Act and Delaware common law and awarded monetary damages to Defendant/Counterclaim-Plaintiff Lexion Medical, LLC. The Court also denied Lexion’s post-trial motions for permanent injunction, disgorgement of profits, attorneys’ fees and prejudgment interest. Id. at *2. The Court granted Lexion’s motion for postjudgment interest. Id. at *26.

In support of its JMOL motion on the jury’s award of monetary damages, SurgiQuest asserted that no reasonable jury could have awarded money damages because (1) Lexion failed to prove causation between the false advertising claims and damages; (2) the jury instructions on causation and damages were incorrect; and (3) the Court improperly admitted hearsay and salesperson confusion evidence. Id. at *4. In response, Lexion contended that SurgiQuest could not prove a lack of sufficient evidence because the pertinent statements were literally false, consumers purchased SurgiQuest’s product and stopped purchasing Lexion’s product, and the evidence of confusion showed that the false advertising actually deceived a portion of the buying public. Id. at *5.

After considering the entire record in the case, including the evidence in the record, the parties’ post-trial submissions, and the applicable law, the Court agreed with Lexion and concluded that (1) the evidence at trial was sufficient to support the jury’s verdict that there was a causal connection between the false advertising by SurgiQuest and Lexion’s loss; (2) the jury instructions were proper; and (3) the statements alleged by SurgiQuest to be hearsay and salesperson confusion evidence were properly admitted. Id. at *5-13. The Court also concluded that there was sufficient evidence to support the jury’s verdict awarding punitive damages to Lexion. Id. at*13-17.

A copy of the Memorandum Opinion is attached.

By Memorandum Opinion entered by The Honorable Richard G. Andrews in State of Delaware v. Purdue Pharma L.P. et al., Civil Action No. 18-383-RGA (D.Del. April 25, 2018), the Court granted Plaintiff State of Delaware’s Motion to Remand the action originally filed by Plaintiff in the Superior Court of Delaware against manufacturers, distributors, and pharmacy retailers of prescription opioids for their roles in Delaware’s opioid crisis. In granting the Motion to Remand the action back to Delaware Superior Court, the District Court found that it lacked federal subject matter jurisdiction over Plaintiff’s claims. Id. at *2.

Specifically, in the action, Plaintiff alleged that Defendants created and fueled the opioid crisis in Delaware by violating the Delaware Controlled Substances Act and the Federal Controlled Substances Act, among other things. Id. However, in its Complaint, Plaintiff alleged only state law claims of consumer fraud, nuisance, negligence, unjust enrichment, and civil conspiracy against McKesson Corporation. Id. Nonetheless, McKesson filed a notice removing the action to the District of Delaware asserting that there was federal question jurisdiction pursuant to the Federal Controlled Substances Act. Id. at *2-3. Thereafter, Plaintiff filed its Motion to Remand the action back to Delaware Superior Court. Id. at *3.

Because there was no dispute that Plaintiff’s claims arose under state law, McKesson had to show that a federal issue is (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution without disrupting the federal-state balance approved by Congress. Id. at *4. Ultimately, the Court found that “the federal issues in [the] case are not necessarily raised, substantial, and possible to entertain without disrupting the congressionally – approved balance between state and federal courts.” Id. at *11. Thus, the Court found that Plaintiff’s state law claims do not “arise under the Constitution, laws or treaties of the United States” and did not confer federal question jurisdiction pursuant to 28 U.S.C. § 1331. Id. at *11.

A copy of the Memorandum Opinion is attached.

By Memorandum Order entered by The Honorable Leonard P. Stark in Margaret Kay Young, et al. v. Bristol-Myers Squibb Co. and Pfizer Inc. and 32 similar actions, Civil Action Nos. 17-609-LPS through 17-641-LPS, (D.Del. June 27, 2017), the Court denied Plaintiffs’ motion to remand 33 removed Eliquis® actions to state court. Plaintiffs contended that Defendants’ removal of the actions to federal court was improper under 28 U.S.C. § 1441(b) because Defendants are citizens of Delaware. Id. at*2. Specifically, Plaintiffs contended that the “forum defendant rule” barred Defendants from removing the actions to federal court. Id. Defendants countered contending that, because they removed the cases to federal court before they were served with process, there was no forum defendant who was “properly joined and served” so § 1441(b) did not bar removal. Id.

The Court agreed with Defendants and denied Plaintiffs’ motion to remand. Id. at*3. In doing so, the Court noted that it saw no reason to depart from its prior decisions in Munchel, 2012 WL 4050072, and Hutchins, 2009 WL 192468. Id.

A copy of the Memorandum Order is attached.

Today, through a unanimous decision of the Court delivered by Justice Thomas (with the exception of Justice Gorsuch who took no part in the consideration or decision of the case), the U.S. Supreme Court in TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. _____ (2017) reversed the Federal Circuit in ruling that 28 U.S.C. § 1400(b) remains the only applicable patent venue statute, the term “residence” in 28 U.S.C. § 1400(b) refers only to the State of incorporation of a domestic corporation, and that 28 U.S.C. § 1391 did not supplement or modify § 1400(b) or the Supreme Court’s prior decision in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 226 (1957). Thus, given today’s ruling, patent infringement lawsuits will only be able to be filed in judicial districts in states where the infringing defendant is incorporated or in judicial districts where defendant has committed acts of infringement and has a regular and established place of business.

A copy of the U.S. Supreme Court’s Opinion is attached.

The general take away is that, if a patent infringement action is filed against a defendant in a state where defendant is not incorporated or in a state where defendant does not have a regular and established place of business and/or has not committed acts of infringement, the allegedly infringing defendant should move to dismiss or transfer the action for lack of venue.