MASIMO CORPORATION v. MINDRAY DS USA, INC. et al

Filing 46

OPINION. Signed by Judge Susan D. Wigenton on 9/1/2015. (anr)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
:
MASIMO CORPORATION,
:
:
Plaintiff/Counterclaim-Defendant,
:
:
v.
:
:
MINDRAY DS USA, INC, SHENZHEN
:
:
MINDRAY BIO-MEDICAL
ELECTRONICS CO., LTD, & MINDRAY :
:
MEDICAL INTERNATIONAL LTD.
:
:
Defendant/Counterclaim-Plaintiff.

Civil Action No. 15-0457 (SDW)(SCM)

OPINION
September 1, 2015

WIGENTON, District Judge.
Before this Court are five motions:
1) Motion to Remand this matter to the Superior Court of New Jersey pursuant to 28
U.S.C. § 1447(c) filed by Masimo Corporation (“Masimo” or “Plaintiff”) (Dkt. No.
19);
2) Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12 (b)(6), or
alternatively, a stay of this matter pending the resolution of a related case captioned
Masimo Corporation v. Mindray DS USA Inc., et al., Docket No. 8:12-CV-02206-CJCJPR, currently before the United States District Court for the Central District of
California (“the California Action”) filed by Defendant Mindray DS USA Inc.
(“Mindray DS”) (Dkt. No. 5);

3) Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12 (b)(2) and 12(b)(6)
filed by Defendant Mindray Medical International Ltd. (“MMIL” or “Mindray
International”) (Dkt. No. 6);
4) Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12 (b)(2) and 12 (b)(6)
filed by Defendant Shenzhen Mindray Bio-Medical Electronics Co., Ltd. (“Shenzen”
or “Shenzen Mindray”) (Dkt. No. 7); and
5) Cross-motion to Dismiss pursuant to Federal Rule of Civil Procedure 12 (b)(6) filed
by Masimo (Dkt. No. 24).
This Court heard oral argument on July 1, 2015. Jurisdiction is proper pursuant to 28 U.S.C.
§ 1332. Venue is proper pursuant to 28 U.S.C. § 1391. For the reasons set forth below, this Court
will grant Plaintiff’s motion to remand the state law claims, Defendants’ antitrust counterclaims,
and Plaintiff’s antitrust counter-counterclaims to the Superior Court of New Jersey, stay
Defendants’ patent counterclaims and as well as Plaintiff’s patent counter-counterclaims pending
the resolution of the California action, decline to exercise supplemental jurisdiction over
Defendants’ counterclaims and Plaintiff’s counter-counterclaims that are based upon state law, and
dismiss as moot Defendants’ motions to dismiss and Plaintiff’s cross-motion to dismiss
Defendants’ counterclaims.
FACTUAL AND PROCEDURAL HISTORY
Masimo, a Delaware corporation based in California, is a global medical technology
company that develops, manufactures and sells noninvasive patient monitoring technologies for
use in medical equipment manufactured and sold by Masimo as well as for use in medical devices
that are developed, manufactured, marketed, and sold by other companies.

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Defendants consist of three entities: (1) Mindray DS, a Delaware corporation
headquartered in Mahwah, New Jersey, imports, markets, sells, and distributes medical
equipment in the United States, including noninvasive monitoring technologies; (2) Shenzen
Mindray, a Chinese corporation, develops, manufactures, markets, exports and sells medical
equipment worldwide; and (3) Mindray International, a Cayman Islands corporation
headquartered in Shenzen, China, is the parent company of Shenzen Mindray and Mindray DS,
which, according to defendants, is essentially “a holding company that conducts no material
business activity.” Mindray DS’s Brief in Supp. Motion to Dismiss, Dkt. No. 5, p. 2.

A. The California Action
On December 21, 2012, Masimo filed claims of patent infringement against Mindray DS
and Shenzhen Mindray in the Central District of California. See Declaration of Jonathan Israel
(“Israel Decl.”), Ex. D (Masimo’s original complaint in the California Action). Masimo accused
Mindray DS and Shenzhen Mindray of infringing nine (9) patents that all relate to pulse oximetry
technology, which is covered by a 1997 Restated Purchasing and Licensing Agreement (the “1997
Agreement”) between Masimo and Mindray DS. 1 The 1997 Agreement contained a forum
selection clause designating New Jersey as the proper forum for disputes arising from that
agreement. In addition, Masimo asserted six non-patent state law claims against Shenzhen
Mindray only, namely: (I) breach of contract, (II) breach of the covenant of good faith and fair
dealing, (III) accounting, (IV) interference with prospective economic advantage, (V) declaratory
relief, and (VI) unfair competition. See Israel Decl., Ex. D, at ¶¶ 102-144. These non-patent claims
relate to the Chinese Mindray Agreement (aka “the Shenzen Agreement”), and amendments

1

Although the 1997 Agreement was actually signed by Mindray DS’s predecessor-in-interest, Datascope Corp.,
Mindray DS became bound by the Agreement when it acquired Datascope Corp. in 2008.

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thereto, entered into between Masimo and Shenzen Mindray in 2002, and effective between 2003
and 2012. 2 See id. ¶¶ 31-54.
On February 4, 2013, Mindray DS moved to dismiss the California Action for improper
venue or, in the alternative, to sever and transfer the portion of the case relating to the 1997
agreement to the District of New Jersey. On February 28, 2013, the California court determined
that the forum selection clause in the 1997 Agreement required Masimo to pursue its claims
against Mindray DS in the District of New Jersey, if at all. Consequently, Shenzhen Mindray
became the sole defendant in the California Action. Shenzhen Mindray subsequently moved for
judgment on the patent infringement claims, arguing that as a Chinese entity, it did not engage in
infringing acts within the United States. Masimo responded that the patent infringement claims
against Shenzhen Mindray were premised upon the U.S.-based infringing acts of its subsidiary,
Mindray DS. The California court ruled against Masimo, dismissing the patent infringement
claims alleged against Shenzhen Mindray.
On August 5, 2013, Masimo filed an Amended Complaint in the California Action in which
it continued to base its infringement claims against Shenzhen Mindray on the alleged infringing
acts of Mindray DS. In response, Shenzhen Mindray filed extensive counterclaims for relief
including multiple claims asserting non-infringement, invalidity, and unenforceability of the
patents that Masimo alleges Mindray DS directly infringes. Additionally, Shenzhen Mindray
alleged multiple antitrust counterclaims directly related to its patent counterclaims. Shenzhen
Mindray’s counterclaims are also based, in part, on Shenzen Mindray’s allegation that Masimo
violated the 1997 Agreement.

2

Mindray DS is not a party to the Chinese Mindray Agreement, which expired in 2012.

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B. The New Jersey Action—First Removal & Remand (Civil Action 2:14-cv-0405-SDWMCA)
On December 11, 2013, Masimo filed suit in the Superior Court of New Jersey against
Mindray DS, Shenzhen Mindray, and Mindray Medical. However, Masimo did not assert the
patent infringement claims against Mindray DS that had been previously dismissed in the
California Action pursuant to the forum selection clause. Instead, Masimo asserted only state law
and contract claims arising under the 1997 Agreement. Specifically, Masimo claimed Mindray
DS and its affiliates breached the 1997 agreement by failing to adopt “primarily” Masimo’s pulse
oximetry technology in manufacturing their products as provided by the agreement after Mindray
DS became affiliated with Shenzen Mindray and Mindray Medical. The causes of action alleged
are: (1) Breach of Contract; (2) Breach of the Implied Covenant of Good Faith and Fair Dealing;
(3) Declaratory Relief; (4) Tortious Interference with Prospective Economic Advantage; (5)
Tortious Interference with Contract. See Dkt. No. 1, Notice of Removal.
On January 17, 2014, Mindray DS filed its Notice of Removal to federal court. It claimed,
inter alia, that this Court has original jurisdiction over its anticipated patent infringement
counterclaims pursuant to 28 U.S.C. § 1454. See Dkt. No. 1. On January 27, 2014 Mindray DS
moved to dismiss or stay the action based on the first-filed rule arguing that the New Jersey action
was duplicative of the pending California Action. See Dkt. No. 2. Thereafter, Masimo sought
remand on the ground that Defendants had not properly pled the patent infringement counterclaims
upon which removal was based at the time that the Notice of Removal was filed. See Dkt. No. 13.
Mindray DS responded that its express assertion in its Notice of Removal of its intention to allege
patent counterclaims should suffice to confer jurisdiction upon this Court. See Dkt. No. 15.
Masimo countered that a party must assert its federal claims in an affirmative pleading, such as a

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complaint or an answer, which must be duly filed prior to removal to federal court. Dkt. No. 17 at
10.
After Plaintiff’s Motion to Remand had been fully briefed, on May 21, 2014, Mindray DS
filed its Answer and Counterclaims. See Dkt. No. 34. In a letter dated June 3, 2014, Mindray DS
contended that its recently filed Answer and Counterclaims rendered Plaintiff’s pending Motion
to Remand moot, and requested that Plaintiff withdraw the motion. See Dkt. No. 39, Ex. A.
Plaintiff maintained that removal remained improper under 28 U.S.C. § 1454 because Mindray
DS’s Answer and Counterclaims asserting federal counterclaims did not predate the Notice of
Removal. See Dkt. No. 39, Ex. B.
In a report and recommendation (“R&R”) filed on June 11, 2014, (then Magistrate) Judge
Arleo recommended that the matter be remanded to the Superior Court of New Jersey. See Dkt.
No. 46. Judge Arleo noted that failure to remand might result in a federal court ruling on purely
state law issues before any federal claims have been duly asserted in the case. This Court adopted
Judge Arleo’s R&R and remanded the matter to state court. See Dkt. No. 60, Order Adopting
R&R.

C. The New Jersey Action—Second Removal (Civil Action 2:15-cv-00457-SDW-SCM)
On January 22, 2015, Plaintiff filed the instant matter in the Superior Court of New Jersey;
Defendants filed a Notice of Removal on the same day. Dkt. No. 1, Notice of Removal, ¶12.
Defendants base removal on: (1) their duly asserted patent and antitrust counterclaims, and (2)
Plaintiff’s patent and antitrust counter-counterclaims. 3 See generally Defs.’ Mem. in Opp’n to

3

On February 26, 2015, Plaintiff filed patent and antitrust counter-counterclaims in response to Defendants’ patent
and antitrust counterclaims. See Dkt. No. 22, Pl. Answer to Counterclaim and Counter-Counterclaim.

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Mot. to Remand, Dkt. No. 34. The following is a summary of the motions pending before this
Court:
a. Masimo’s Motion to Remand
Plaintiff moves to remand this matter to state court. See Dkt. No. 19. Plaintiff asserts that
remand should be granted for five reasons: (1) the relevant removal statute precludes review of
the permissive, non-compulsory, patent counterclaims at issue here, (2) antitrust counterclaims do
not provide a basis for removal, (3) there is no basis for this Court to exercise supplemental
jurisdiction over Plaintiff’s underlying state contract claims, (4) Defendants’ removal was
untimely, and finally (5) Plaintiff’s patent and antitrust counter-counterclaims were made
conditional on Defendants’ pending motions in order to preserve Plaintiff’s ability to argue those
claims later, if at all. See generally Pl.’s Reply Br., Dkt. No. 35 (arguing that, at minimum, the
state contract claims should be remanded).

b. Defendants’ Motions to Dismiss for Failure to State a Claim
Defendants Mindray DS, Shenzen Mindray, and Mindray International each filed motions
to dismiss the complaint. Mindray DS argues that the first-filed rule effectively bars Masimo from
instituting a duplicative action in New Jersey while the California Action is pending, as both
actions “target substantially the same party and the same allegedly wrongful conduct.” See
Mindray DS Brief in Supp. Mot. To Dismiss, Dkt. No. 5, p. 5-9. Alternatively, Mindray DS
requests a stay of this matter until the California Action is resolved.
Shenzen Mindray seeks dismissal on jurisdictional grounds; it posits that Masimo’s theory
of liability and jurisdiction—that Shenzen is Mindray DS’s alter ego—is specious, conclusory,
and bereft of factual support. See Shenzen Brief in Supp. Mot. To Dismiss, Dkt. No. 7, p. 2-3.

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Lastly, Mindray International moves for dismissal of the complaint for reasons identical
to those advanced by Shenzen Mindray. It asserts that as a Cayman Islands corporation with no
minimum contacts with New Jersey, this Court has no basis to exercise personal jurisdiction.
Further Mindray International posits that “Masimo’s legally conclusory alter ego allegations do
not, and cannot, support in personam jurisdiction over MMIL.” See MMIL Brief in Supp. Mot.
To Dismiss, Dkt. No. 6, p. 1.
c. Masimo’s Cross-Motion to Dismiss Defendants’ Counterclaims
Plaintiff cross-moves to dismiss Defendants’ counterclaims pursuant to Federal Rule of
Civil Procedure 12(b)(6). See Dkt. No. 24, p. 21. Plaintiff bases its motion on the first-filed rule,
arguing that the Defendants’ filing of almost identical patent and anti-trust counterclaims in the
California Action bars the adjudication of said claims in the New Jersey Action. Id. Furthermore,
Plaintiff argues that because Defendants successfully argued, in the California Action, that the
forum selection clause directed resolution of Plaintiff’s contract claim to New Jersey, Defendants
are claim precluded from arguing before this Court that New Jersey is an improper venue. See
generally Pl.’s Cross Mot. to Dismiss, Dkt. No. 24 (also arguing for judicial estoppel).

DISCUSSION
A. Motion to Remand
a. Legal Standard
As a preliminary matter, a district court has subject matter jurisdiction “of all civil actions
arising under the Constitution, laws, or treaties of the United States,” pursuant to 28 U.S.C. § 1331.
A claim “arises under” federal law if “a well-pleaded complaint establishes either that federal law
creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of

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a substantial question of federal law.” Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation
Trust for S. Cal., 463 U.S. 1, 27-8, 103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983).
A civil action brought in state court may be removed to federal court if the federal court
has original jurisdiction to hear the matter. 28 U.S.C. § 1441(a). A district court has original
jurisdiction over an action when there is diversity jurisdiction pursuant to 28 U.S.C. § 1332 or
when there is federal question jurisdiction pursuant to 28 U.S.C. § 1331. Cabibbo v. Parsons
Inspection & Maintenance Corp., 2009 U.S. Dist. LEXIS 87537, 2009 WL 3074731, at *3 (D.N.J.
Sept. 23, 2009). “[T]he party asserting federal jurisdiction in a removal case bears the burden of
showing, at all stages of the litigation, that the case is properly before the federal court.” Frederico
v. Home Depot, 507 F.3d 188, 193 (3d Cir. 2007) (internal citations omitted).
Where a case has been removed to federal court on the basis of federal question jurisdiction,
a district court may remand the case back to state court when all federal claims have been dropped
and only pendent state law claims remain. Monk v. New Jersey, 2014 U.S. Dist. LEXIS 140276,
2014 WL 4931309, at *3 (D.N.J. Oct. 2, 2014) (internal citations omitted); see also CarnegieMellon Univ. v. Cohill, 484 U.S. 343, 347, 108 S. Ct. 614, 98 L. Ed. 2d 720 (1988). A district court
“may decline to exercise supplemental jurisdiction over a claim. . . if . . .the district court has
dismissed all claims over which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3). “The general
approach is for a district court to. . .hold that supplemental jurisdiction should not be exercised
when there is no longer any basis for original jurisdiction.” Schaffer v. Twp. of Franklin, 2010 U.S.
Dist. LEXIS 18447, 2010 WL 715349, *1 (D.N.J. Mar. 1, 2010).
In this District, courts have declined to exercise supplemental jurisdiction over state law
claims where the federal claims were eliminated by amendment, and the action was in its early
stages. See, e.g., Alicea v. Outback Steakhouse, et al., 2011 U.S. Dist. LEXIS 65551, 2011 WL

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2444235 (D.N.J. June 9, 2011) and 2011 U.S. Dist. LEXIS 47571, 2011 WL 1675036 (D.N.J. May
3, 2011) (declining to exercise supplemental jurisdiction and remanding the action where Plaintiff
amended complaint and dropped federal claims); Bonanni v. Purdy, 2013 U.S. Dist. LEXIS
175055, 2013 WL 6579129, at *2 (D.N.J. Dec. 13, 2013) (remanding and declining to retain
supplemental jurisdiction where Plaintiff amended complaint to eliminate federal claim where
initial reference to federal claim was allegedly inadvertent); Pacheco v. Rosenberg, 2013 U.S.
Dist. LEXIS 19272, 2013 WL 588246 (D.N.J. Feb. 13, 2013) and 2013 U.S. Dist. LEXIS 20071,
2013 WL 588225, at *5 (D.N.J. Jan. 24, 2013) (remanding the action and declining to exercise
supplemental jurisdiction over state claims, where party voluntarily dismissed federal claims);
Cabibbo, 2009 U.S. Dist. LEXIS 87537, 2009 WL 3074731, at *7 (remanding the action after
Plaintiff amended complaint to leave only state law claims). See also Andre Simmons v. New Jersey
Dept. of Corrections, 2015 U.S. Dist. LEXIS 70796, 2015 WL 3488137, *4 (D.N.J. June 2, 2015)
(“Where the federal claims are dismissed at an early stage in the litigation, courts generally decline
to exercise supplemental jurisdiction over state claims.”).
While courts consider the possibility of forum manipulation when a party drops or
dismisses its federal claims, this is “but one factor to be considered among the factors of economy,
convenience, fairness, and comity.” See Cabibbo, 2009 U.S. Dist. LEXIS 87537, 2009 WL
3074731, at *7 (citing Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 357, 108 S. Ct. 614, 98 L.
Ed. 2d 720 (1988)). In Cabibbo, the court remanded an action despite defendants’ suggestion that
plaintiff's withdrawal of preempted claims after removal constituted forum manipulation. 2009
U.S. Dist. LEXIS 87537, [WL] at *7. The court noted that, in withdrawing the claims, plaintiff
may have realized that those claims were unlikely to succeed. Id. The court also noted that it had

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not expended substantial resources on the case; the case was in its initial phases; and plaintiff was
attempting to vindicate substantive state rights independent of the former claims. Id.

b. Analysis
Masimo argues that this case was improperly removed in the first instance. In Plaintiff’s
view, thirty-four of Defendants’ thirty-five counterclaims are duplicative and should be dismissed
pursuant to the “first filed rule” as they were initially filed in the California Action and are still
pending before that court. Plaintiff further argues that Defendants invoke federal question
jurisdiction based on non-compulsory patent infringement counterclaims—that is, the patent
infringement counterclaims are not essential to resolution of the underlying contract law claims—
and therefore do not meet the requirements of 28 U.S.C. §1454, the federal statute which permits
removal based on a counterclaim. As to Defendants’ antitrust counterclaims, Plaintiff contends
that they do not provide a basis for removal because they remain subject to the well-pleaded
complaint rule, which “provides that federal jurisdiction exists only when a federal question is
presented on the face of the plaintiff’s properly pleaded complaint.” Caterpillar Inc. v. Williams,
482 U.S. 386, 392 (1987) (emphasis added).
As an initial matter, it should be noted that Masimo conceded during oral argument that
the Defendants’ patent counterclaims would not be appropriate for remand and “should be
adjudicated” in federal court. See Dkt. No. 45, 11:11-23.
In response to Plaintiff’s contention that Defendants’ antitrust counterclaims do not benefit
from the so-called “Holmes Group fix” Defendants point to subsection (d)(1) of Section 1454,
which reads:
(d) Remand. If a civil action is removed solely under this
section, the district court—
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(1) shall remand all claims that are neither a basis for
removal under subsection (a) nor within the original or
supplemental jurisdiction of the district court under any Act of
Congress . . .
28 U.S.C. §1454(d)(1) (emphasis added).
Essentially, Defendants contend that removal can be sought upon the filing of any counterclaim
which implicates the areas of law that fall within the original or supplemental jurisdiction of the
federal court. Defendants maintain that antitrust claims, and their counterclaims brought under the
Sherman Act are squarely within this Court’s original and exclusive jurisdiction and are therefore
a proper basis for removal. However, the purpose of Section 1454, which can be discerned from
its legislative history, belies Defendants’ theory.
Under the well-pleaded complaint rule, a suit “arises under” federal law, and is appropriate
for removal, only when a federal question is presented on the face of the plaintiff’s properly
pleaded complaint. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-12,
77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983); Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149,
152, 29 S. Ct. 42, 53 L. Ed. 126 (1908). Because a federal defense or counterclaim to a plaintiff’s
state law cause of action ordinarily does not appear on the face of a well-pleaded complaint, the
defendant’s pleadings, barring certain statutory exceptions, are routinely deemed insufficient to
justify removal to federal court. See e.g. Caterpillar, Inc. v. Williams, 482 U.S. 386, 398, 96 L. Ed.
2d 318, 107 S. Ct. 2425 (1987) (“The fact that a defendant might ultimately prove that a plaintiff’s
claims are pre-empted under [a federal statute] does not establish that they are removable to federal
court.”); Gully v. First Nat’l Bank, 299 U.S. 109, 115-18, 81 L. Ed. 70, 57 S. Ct. 96 (1936)
(similar).
Generally, federal district courts have original jurisdiction over “any civil action arising
under any Act of Congress relating to patents.” 28 U.S.C. § 1338(a). Such claims, if filed in state
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court, may be removed to federal court under 28 U.S.C. § 1441. In Holmes Group v. Vernado
Circulation Systems, Inc., the Supreme Court limited this jurisdiction by holding that the ability of
the Federal Circuit, which hears virtually all appeals of patent cases, to hear cases “arising under”
federal law was governed by the well pleaded complaint rule, thus requiring subject matter
jurisdiction to be determined by the plaintiff’s complaint. 535 U.S. 826, 830, 153 L. Ed. 2d 13, 19,
122 S. Ct. 1889, 1893 (2002).
In response to Holmes, Congress enacted the Leahy-Smith America Invents Act (“AIA”)
(Pub. L. No. 112–29, § 19(c)(1), 125 Stat. 332 (2011)), also known as the “Holmes Group Fix”
(H.R. Rep. No. 112-98, at 81 (2011)), which effectively nullified Holmes by allowing federal
patent law counterclaims to serve as a basis for removal to federal court. In so doing, Congress
devised a new removal statute dedicated to the removal of patent cases.
While the legislative history of the AIA, also known as House Report on H.R. 1249
(“House Report”), provides little clarification about the Holmes Group fix in particular, it notes:
“The Act clarifies the jurisdiction of the U.S. District Courts and stipulates that the U.S. Court of
Appeals for the Federal Circuit has jurisdiction over appeals involving compulsory patent
counterclaims.” H.R. 1249, Pub. L. No. 112-29 (2006) (adopted from Committee Report
accompanying H.R. 2955, in which it appears) (emphasis added). In addition, when Representative
Lamar Smith, Chairman of the Subcommittee on Courts, the Internet, and Intellectual Property
introduced H.R. 2955 to the full House on June 16, 2005, he explained that the bill, if signed into
law, would serve the following three goals:
First, to prevent state courts from acquiring jurisdiction over
patent matters, the bill amends the second sentence of §1338(a) as
follows: “No state court shall have jurisdiction over any claim for
relief arising under any Act of Congress relating to patents, plant
variety protection, or copyrights.”

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Second, H.R. 2955 amends 28 U.S.C. § 1295 (the statute
defining Federal Circuit jurisdiction) by giving the court exclusive
appellate jurisdiction “of an appeal from a final decision of a [U.S.
district court] in any civil action in which a party has asserted a claim
for relief arising under any Act of Congress relating to patents or
plant variety protection.”
Finally, H.R. 2955 creates a new federal removal statute that
would allow patent issues in a state action to be removed to U.S.
district court while other state or supplementary matters would be
remanded back.
This ensures that federal courts will continue to exercise
exclusive jurisdiction over patent cases as they have since at least
1836.
This provision also promotes administrative efficiencies by
obviating the need for a state litigant to file a second suit to address
patent claims in federal court.
Id., p. 18 (emphases added).
Clearly, by enacting Section 1454, Congress sought to ensure that patent law claims would
be adjudicated in federal court. If it had intended to undo the well-pleaded complaint rule by
permitting removal based upon any and all counterclaims that raise a federal question, it would
have done so more explicitly. While this Court acknowledges that 1454(d)(1) is somewhat
ambiguous, it nonetheless rejects the expansive reading that Defendants propose. As such,
Defendants’ antitrust counterclaims are subject to remand.
In light of the foregoing, the only impediment to remand is the Defendants’ patent
counterclaims and Plaintiff’s patent counter-counterclaims. Rule 42(b) provides that the Court
may order a separate trial of claims, counterclaims, or issues “in furtherance of convenience or to
avoid prejudice, or when separate trials will be conducive to expedition and economy.” Fed. R.
Civ. Proc. 42(b); see also Ellingson Timber Co. v. Great N. Ry. Co., 424 F.2d 497, 499 (9th Cir.
1970) (“One of the purposes of Rule 42(b) is to permit deferral of costly and possibly unnecessary
discovery proceedings pending resolution of potentially dispositive preliminary issues.”). Here,
the patent counterclaims at bar have also been asserted in the California Action, where trial is

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scheduled to commence within months. In furtherance of judicial expedition and economy, the
patent law counterclaims and counter-counterclaims in this matter will be severed and stayed
pending the resolution of the California Action.
Furthermore, because Plaintiff’s claims are based upon state law and Defendants’ antitrust
counterclaims do not trigger exclusive federal question jurisdiction pursuant to Section 1454, those
claims will be remanded to the Superior Court of New Jersey. This Court also declines to exercise
supplemental jurisdiction over any state law counterclaims that may have been asserted in this
matter. Such claims are likewise remanded to the state court.
B. Defendants’ Motions to Dismiss
Defendants Mindray DS, Shenzen Mindray and Mindray Medical filed separate motions
seeking to dismiss the complaint, however, because this matter has been partially remanded and
partially stayed, the pending motions to dismiss will be dismissed as moot. See Dkt. Nos. 5, 6, 7.
C. Plaintiff’s Cross-Motion to Dismiss
Similarly, given this Court’s ruling on Plaintiff’s motion to remand, Plaintiff’s crossmotion to dismiss will be dismissed as moot. See Dkt. No. 24.

CONCLUSION
For the reasons expressed above, Plaintiff’s motion to remand (Dkt. No. 19.) is
GRANTED IN PART. Plaintiff’s state law claims, Defendants’ antitrust counterclaims, and
Plaintiff’s antitrust counter-counterclaims will be remanded to state court. Defendants’ patent
counterclaims as well as Plaintiff’s patent counter-counterclaims are hereby severed and stayed
pursuant to Rule 42(b) pending the resolution of a related matter in the United States District Court

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for the Central District of California. As a result, this matter will be ADMINISTRATIVELY
TERMINATED with the right to reopen upon the conclusion of the California Action.
Defendants’ motions to dismiss (Dkt. Nos. 5, 6, and 7) and Plaintiff’s cross-motion to dismiss
(Dkt. No. 24) are DISMISSED AS MOOT. An appropriate order will be filed with this Opinion.

s/ Susan D. Wigenton
SUSAN D. WIGENTON
UNITED STATES DISTRICT JUDGE
Orig: Clerk
cc:
Parties
Steven C. Mannion, U.S.M.J.

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