Rembrandt Diagnostics, LP v. Alere, Inc. et al
Filing
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ORDER on Motion to Lift Stay; Order to Show cause [Doc. No. 101 . Signed by Judge Cathy Ann Bencivengo on 3/28/2017. (jjg)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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REMBRANDT DIAGNOSTICS, LP.,
Case No.: 3:16-cv-0698-CAB-(NLS)
Plaintiff,
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v.
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ORDER ON MOTION TO LIFT
STAY
[Doc. No. 101]
ALERE, INC., ALERE TOXICOLOGY
SERVICES, INC., AMEDICA
BIOTECH, INC., AMEDITECH INC.,
INNOVACON, INC., INSTANT
TECHNOLOGIES, INC., U.S.
DIAGNOSTICS, INC., INSTANT TECH
SUBSIDIARY ACQUISITION INC. dba
U.S. DIAGNOSTICS, BRANAN
MEDICAL CORPORATION, and DOES
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Defendants.
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Before the Court is Plaintiff Rembrandt Diagnostics, LP’s motion to lift the stay of
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this litigation [Doc. No. 101] issued by the Court on October 19, 2016 [Doc. No. 86].
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Defendant Innovacon, Inc. filed a response. [Doc No. 102.] The Court finds this motion
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suitable for determination on the papers submitted and without oral argument in accordance
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with Civil Local Rule 7.1(d)(1). The motion to lift the stay is granted in so far as the Court
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3:16-cv-0698-CAB-(NLS)
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requires Plaintiff show cause that this case should not be dismissed for lack of diversity
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jurisdiction.
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I.
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This case originated as a patent infringement case. Plaintiff Rembrandt alleged that
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various defendants, including Innovacon, infringed U.S. Patent Nos. 6,548,019 and
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8,623,291. [Doc. No. 1.] Defendants answered on May 13, 2016 and asserted an
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affirmative defense of license. [Doc. No. 25.]
Background
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On August 4, 2016, Defendants notified the court they had filed a petition for Inter
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Partes Review of the two asserted patents with the Patent Office and requested a stay. [Doc.
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No. 35.] On August 5, 2016, Rembrandt filed an amended complaint alleging patent
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infringement of the ‘019 and ‘291, and in the alternative breach of contract and breach of
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the covenant of good faith and fair dealing regarding products subject to a license
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agreement between Rembrandt’s predecessor and Innovacon’s predecessor, which
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included a license to practice the ‘019 patent. [Doc. No. 41.] On September 1, 2016,
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Defendants moved to dismiss for lack of subject matter jurisdiction on the basis that the
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alleged license to Innovacon demonstrated that Rembrandt did not obtain sufficient rights
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to the patents to have jurisdiction to allege infringement. [Doc. No. 58.]
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On October 19, 2016, the Court granted in part and denied in part the motion to
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dismiss. [Doc. No. 85.] Rembrandt’s claim for infringement of the ‘019 patent was
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dismissed for lack of standing. The motion with regard to the ‘291 patent was denied and
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Rembrandt was given leave to amend regarding its breach of contract claims. The Court
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also granted a temporary stay, with the exception of the amendment of the pleadings,
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awaiting the Patent Office’s decision to institute IPR. [Doc No. 86.]
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Rembrandt filed a Second Amended Complaint (“SAC”) on October 31, 2016,
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alleging breach of contract and breach of the covenant against Innovacon, and infringement
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of the ‘291 patent against all defendants. [Doc. No. 90.] On February 17, 2017, the parties
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informed the Court that the Patent Office instituted IPR on all asserted claims of the ‘291
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patent and claims 1-5, 9, 11-16 of the ‘019 patent (leaving 2 dependent claim not subject
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3:16-cv-0698-CAB-(NLS)
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to review). [Doc. Nos. 98, 99.] Rembrandt indicated its intention to dismiss the claims of
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infringement of the ‘291 patent and proceed only on the contract claims and therefore
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requested the temporary stay be lifted. [Doc. No. 99.] On March 16, 2017, the Court
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entered the joint request to dismiss the claims of infringement of the ‘291 patent with
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prejudice. [Doc. No. 104.]
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This case now presents as a breach of contract and breach of the covenant case
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between Rembrandt, as the successor licensor, and Innovacon, as the successor licensee,
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to the license agreement attached as Exhibit 6, to the SAC. [Doc. No. 94 (sealed).]
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II.
SAC Does Not Properly Allege Diversity of the Parties
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The SAC alleges diversity jurisdiction under 28 U.S.C. §1332, as the basis of this
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Court’s subject matter jurisdiction over the alleged contract claims. [Doc. No. 90 at ¶1.]
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In light of Plaintiff’s dismissal of the federal question allegations, it has come to the Court’s
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attention that Rembrandt has not properly alleged diversity of the parties for purposes of
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subject matter jurisdiction. “Federal Rule of Civil Procedure 12(h)(3)provides that a court
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may raise the question of subject matter jurisdiction, sua sponte, at any time during the
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pendency of the action.” Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002).
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Plaintiff Rembrandt alleges that Innovacon is a California corporation with its
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principle place of business in California. [Id., at ¶8.] Plaintiff also alleges it is a limited
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partnership under the laws of Virginia with its principle place of business in Pennsylvania.
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[Id., at ¶3.] Plaintiff therefore concludes that they are citizens of different states and
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jurisdiction is proper under 28 U.S.C. §1332.
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Limited partnerships, however, for purposes of diversity jurisdiction are treated as
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citizens of every jurisdiction in which their partners are citizens. Carden v. Arkoma
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Assocs., 494 U.S. 185, 195 (1990); Johnson v. Columbia Props. Anchorage, LP, 437 F.3d
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894, 899 (9th Cir. 2006). The SAC fails to identify the citizenship of all the limited partners
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of Rembrandt making it impossible for the Court to determine whether there is complete
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diversity among the parties. See Lindley Contours, LLC, v. AABB Fitness Holdings, Inc.,
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414 Fed. Appx. 62, 64 (9th Cir. 2011) (the citizenship of each individual member must be
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identified).
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Plaintiff is hereby ORDERED TO SHOW CAUSE on or before April 7, 2017,
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why this matter should not be dismissed for lack of subject matter jurisdiction.
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Specifically, Plaintiff’s response to this Order requires evidence, via a declaration or
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otherwise, that all the partners of the limited partnership are diverse in citizenship from
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Defendant Innovacon. Failure to timely provide such evidence will result in dismissal for
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lack of subject matter jurisdiction.
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It is SO ORDERED.
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Dated: March 28, 2017
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3:16-cv-0698-CAB-(NLS)
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