District of Delaware

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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.

 

On April 13, 2017, the United States Court for the District of Delaware announced that The Honorable Gregory M. Sleet will take senior status as of May 1, 2017.  Judge Sleet has served as a District Judge for the District of Delaware since 1998.  He served as Chief Judge for the District of Delaware from 2007 to 2014.

The Court’s announcement notes that Judge Sleet has handled one of the busiest, most complex dockets in the nation during his nearly 19 years on the bench and has served with great distinction.  The Court’s announcement also notes that Judge Sleet intends to render substantial judicial service as a Senior Judge.

Given the announcement earlier this year that Senior Judge Sue Robinson will retire in August, the District of Delaware will have two District Judge vacancies as of May 1, 2017.  The Court hopes to fill the vacancies in a timely manner.

A copy of the Court’s announcement is attached.

By Memorandum Order entered by The Honorable Leonard P. Stark in Beijing Sinotau Medical Research Co., Ltd. v. Navidea Biopharmaceuticals, Inc., et al., Civil Action No. 17-110-LPS-MPT (D.Del. March 1, 2017), the Court granted defendants’ joint motion to stay the action filed by plaintiff in the District of Delaware pursuant to the “first-filed” rule. In granting the motion, the Court explained that (1) defendant Navidea had filed an action against plaintiff Beijing Sinotau in the Southern District of Ohio the day before plaintiff Beijing Sinotau filed the instant action in the District of Delaware; and (2) both actions relate to the same Asset Purchase Agreement between Navidea and Cardinal and the same Exclusive Licensing and Distribution Agreement relating to Beijing Sinotau and Navidea. Id. at *2.

The first-filed rule provides that “in all cases of federal concurrent jurisdiction, the court which first has possession of the subject must decide it.” Id. at*1-2. The rule “encourages sound judicial administration and promotes comity among federal courts of equal rank. It gives a court the power to enjoin the subsequent prosecution of proceedings involving the same parties and the same issues already before another district court.” Id. at *2.

A copy of the Memorandum Order is attached.

The United States District Court for the District of Delaware announced that, effective February 3, 2017, the Honorable Sue L. Robinson, transitioned to Senior Judge.  In the announcement, the Court also set forth certain changes to its case assignment practices given Judge Robinson’s transition to a Senior United States District Judge.  In short, Judge Robinson will not be assigned any new criminal cases or new civil cases.  Until the vacancy is filled, all new criminal cases will be assigned to Chief Judge Stark, Judge Sleet and Judge Andrews.  Until the vacancy is filled, all new civil cases will be assigned to Chief Judge Stark, Judge Sleet, Judge Andrews and a new docket referred to as “Vacant Judgeship” or “VAC”.  The cases assigned to VAC will also be referred to one of the Magistrate Judges – Judge Thynge (“MPT”), Judge Burke (“CJB”), and Fallon (“SRF”).

A copy of the Court’s Announcement is attached.