MHA, LLC v. SIEMENS HEALTHCARE DIAGNOSTICS, INC. et al

Filing 25

OPINION. Signed by Judge Jose L. Linares on 12/21/2015. (ld, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

MHA, LLC d!b/a Meadowlands Hospital
Medical Center,

Civil Action No.: 15-1573 (JLL)
OPINION

Plaintiff,
V.

SIEMENS HEALTHCARE DIAGNOSTICS,
INC.,
Defendant.
LINARES, District Judge.
This matter comes before the Court by way of Defendant Siemens Health
care Diagnostics
Inc. (“Siemens”)’s motion to lift temporary restraints entered by the New
Jersey Superior Court
on February 13, 2015, prior to the date that this action was removed to
the District Court for the
District of New Jersey.

(ECF No. 23, “Def’s. Mov. Br.”).’

Plaintiff MHA, LLC, d/b/a

Meadowlands Hospital Medical Center (“Meadowlands” or “the
Hospital”) opposes this motion.
(ECF No, 24, “P1’s. Opp. Br.”). The Court decides this matter withou
t oral argument pursuant to
Rule 78 of the Federal Rules of Civil Procedure. For the reasons set
forth below, the Court grants
Defendant’s motion to lift temporary restraints; however, pursua
nt to Defendant’s concession
(Def’ s. Mov. Br. at 18) the Court will order Defendant to continue to
provide critical reagents to
the Hospital until it makes appropriate alternative arrangements
or until further Order
l

of the Court.

While Defendant’s papers are filed as a “motion to lift temporary restrain
ts,” it is technically an opposition to
Plaintiff’s order to show cause as to why a preliminary injunction should
not be entered. (See ECF No. 22). For the
sake of docket consistency, the Court will refer to Plaintiff’s motion
for an order to show cause (ECF No. 1-2, “P1’s.
OTSC Mot.”) as “Plaintiff’s order to show cause motion,” will
refer to the instant motion (ECF No. 23, “Def’s.
Mov. Br.”) as a “Defendant’s motion to lift temporary restraints,” and
will refer to Plaintiff’s reply to the instant
motion (ECF No. 24, “P1’s. Opp. Br.”) as “Plaintiff’s opposition brief.”

1

BACKGROUND

Plaintiff Meadowlands is an Acute Care Hospital located in Secaucus, New Jersey. (ECF
No. 1-4, “Compl.” at 1). Defendant Siemens Healthcare Diagnostics, Inc. is in the busine
ss of
selling and leasing clinical equipment and supplies to healthcare providers, including hospita
ls.
(Id. ¶ 1-13). Through a series of written agreements and supplements to those agreem
ents,
executed as early as July 28, 2011, Siemens and Meadowlands have contracted for the sale
and
lease of various medical products and equipment (Id.
2

¶ 1). Specifically, Siemens has agreed to

sell Meadowlands certain “reagents,” or chemical substances used in conjunction with
diagnostic
tools to run clinical testing. (Id. ¶ 6; P1’s.

Opp. Br. at 1).

The parties have also entered into a lease

agreement relating to Siemens’ StreamLAB device, “a conveyor device that interfa
ces with
diagnostic equipment manufactured by Siemens.” (Compi.

¶ 9).

Plaintiff alleges that beginning in March 2013, only one month after the StreamLAB device
was installed, it malfunctioned at least once a week and that since March 2014, the device
entirely out of service and Defendant has failed to make repairs. (Id.

has been

¶J 14-23). On account of

what it viewed as a breach of contract as to the lease agreement, the Hospital ceased
making its
monthly lease payments for the device in or around October 2014. (Id. 29). On
January 9, 2014,
¶
allegedly out of retaliation for Meadowlands’ refusal to make lease payments
related to the
StreamLAB device, counsel for Siemens wrote to Meadowlands to advise
the Hospital that

2
While Meadowlands argues that it leased certain equipment from Siemens Diagno
stic Finance Co., LLC (“SDFC”)
rather than Siemens, and that therefore any right to challenge Meadowland’ failure
s
to make lease payments lies in
SDFC and not Siemens (P1’s. Opp. Br. at 14-15), Siemens explains that since the
execution of the lease agreement,
SDFC was merged into Siemens (Def s. Mov. Br. at 15-17). Accordingly, Siemen
s contends that it is the lessor of
the StreamLAB equipment in question, and therefore has a right to challenge Meado
wlands’ failure to make lease
payments. (Id. at 15-16). Because, as discussed below, the Court need not reach
Plaintiff’s likelihood of success on
the merits in consideration of Meadowland’s request for a preliminary injunct
ion, it need not opine on the
significance of the merger.

2

“Siemens intends to withhold the delivery of reagents and other products to [Meadowlands].” (Id.

¶ 32; P1’s. OTSC Mot. at 6-7).
Soon thereafter, on February 12, 2015, Plaintiff filed a Verified Complaint against Siemens
seeking temporary restraints in the Superior Court of New Jersey, Chancery Division. (P1’s. OTSC
Mot.). Plaintiff asserts claims against Siemens for breach of contract, breach of warranty, the New
Jersey Consumer Fraud Act, and violation of the Magnuson-Moss Federal Trade Commission
Improvement Act. (Compl. at 8-12). On February 13, 2015, the Honorable Judge Hector R.
Velazquez entered an order to show cause with temporary restraints, directing Siemens “to fulfill
orders for reagent and other products and supplies pursuant to its contracts with [P]laintiff.” (ECF
No. 1-3, “TRO” at 2). Before the date of the show cause hearing scheduled by Judge Velazquez,
Defendant removed this action to Federal Court on the grounds of diversity and federal question
jurisdiction. (ECF No. 1, “Notice of Removal” ¶J 7-13).
Since removal to this Court, the parties have engaged in numerous settlement discussions,
but to no avail. (See ECF Nos. 11, 17, 19). On September 28, 2015, counsel informed this Court
that the parties had reached an impasse in their negotiations. (ECF No. 21). After a final settlement
conference before the Honorable Magistrate Judge Joseph A. Dickson on October 5, 2015, the
Defendant was instructed to file its opposition to Plaintiff’s motion for a preliminary injunction.
(ECF No. 22). Defendant filed its opposition, labeled a “motion to lift temporary restraints” on
October 30, 2015 (ECF No. 23), and Plaintiff replied on November 19, 2015 (ECF No. 24, “P1’s.
Opp. Br.”). This matter is now ripe for adjudication.

LEGAL STANDARD

3

The granting of a preliminary injunction “is an extraordinary remedy.

.

.

which should be

granted only in limited circumstances.” Frank’s GMC Truck Center, Inc. v. General Motors
Corp., 847 F.2d 100, 102 (3d Cir. 1988).

“The purpose of such an injunction is to protect the

moving party from irreparable injury until the court can render a meaningful decision on
the
merits.” Caplan v. Feliheimer Eichen Braverman & Kaskly, 68 F.3d 828, 839 (3d Cir. 1995).
Before a court can enter a preliminary injunction, the moving party must show: “(1) a likelihood
of success on the merits; (2) that it will suffer irreparable harm if the injunction is denied; (3) that
granting preliminary relief will not result in even greater harm to the nonmoving party; and
(4)
that the public interest favors such relief.” Kos Pharms., Inc. v Andrx Corp., 369 F.3d 700, 708
(3d Cir. 2004); see also Ortho Pharm. corp. v. Amgen, Inc., 882 F.2d 806, 812 (3d Cir. 1989).
While a district court is required to balance these four factors, the Third Circuit has held
that a court may not enter a preliminary injunction where the plaintiff has not carried its burden
of
meeting the likelihood of success on the merits or irreparable injury prongs. See In re Arthur
Treacher ‘s Franchisee Litig., 689 F.2d 1137, 1143 (3d Cir. 1982) (“[A] failure to show a likelihood
of success or a failure to demonstrate irreparable injury[] must necessarily result in the denial
of a
preliminary injunction.”); see also Morton v. Beyer, 822 F.2d 364, 367 (3d Cir. 1987).
To that
end, the Court first considers whether Plaintiff has shown irreparable harm.

DISCUSSION

The TRO entered in State Court on February 13, 2015 remains in effective. (See TRO).
That Order directs Defendant “to fulfill orders for reagents and other products and
supplies
pursuant to its contracts with [P]laintiff.” (TRO at 2). Plaintiff requests a continuance
of Judge

4

Velazquez’s TRO, arguing that the hospital, as well as the patient community,
3
will suffer
irreparable harm if the Order is lifted. (P1’s. OTSC Mot. at 3-4; P1’s. Opp. Br. at 8-9).
In response,
Defendant has consented to continued restraints regarding the reagents and supplie
s it deems
“critical,” but asks this Court to lift the temporary restraints as to non-critical reagen

ts and supplies.

(Defs. Mov, Br. at 18).
Defendant asserts that no more than 29 percent “of the reagents and supplies which
are the
subject of PlaintifFs application, and which are now being supplied under
Court Order by
Siemens” are “critical” in nature. (ECF No. 23-1, Affidavit of James Donnelly,
Chief Scientific
Officer & Global Vice President of Medical Scientific and Statistical Affairs
of Siemens,
“Donnelly Aff.” ¶J 15, 18). By Siemens’ definition, “critical” reagents are those
necessary to run
tests “to be performed in a relatively short period of time to determine if
urgent medical
intervention is necessary, or if alternate care is required to avoid further harm.”
(Id. at

¶

17).

According to Siemens’ Chief Scientific Officer, Mr. James Donnelly, examples of
critical reagents
that Siemens provides to Meadowlands are Troponin, hCG, and Creatinine,
used for the diagnosis
of heart problems, ectopic pregnancy, and renal failure, respectively. (Id.

¶

18). Additionally,

Siemens has provided the Court with a spreadsheet, prepared in the ordina
ry course of business,
listing reagents and supplies that Meadowlands has purchased within the
past eighteen months
which indicates those products and supplies that are “Not Critical.” (ECF
No. 23-12, Ex. K to
Donnelly Aff,, “Spreadsheet”). Siemens has agreed to continue to provide
critical reagents and
supplies, but asks that the Court lift the TRO to the extent that it compels Siemen
s to provide non
critical reagents and supplies. (Donnelly Aff.

¶

21).

Siemens explains that the “non-critical”

products, while necessary for care, are not necessary “for the urgent deliver
y of care.” (Id.

¶ 18).

Stated differently, Plaintiff seeks the entry of an order preliminarily enjoini
ng Defendant from refusing to fulfill
orders for all reagents.

5

Thus, Defendant contends that Plaintiff has failed to show irreparable harm justifying the
entry of a preliminary injunction and accuses Plaintiff of offering only “a self-serving
and
conclusory statement that ‘irreparable harm will be caused to both [Meadowlands] and the
local
patient community, which will be unable to obtain emergency diagnostics.” (Def’s. Mov. Br.
at
9, quoting P1’s. OTSC Mot. at 4). With regards to the non-critical reagents, Mr. Donnelly attests
to the fact that there will not be harm to the patient population because Meadowlands may utilize
reference laboratories, at least one of which is within ten miles of the hospital, to have certain tests
performed. (Donnelly Aff.

¶ 20).

In Meadowlands’ motion for an order to show cause as to why preliminary restraints should
not be entered, it argued that absent a preliminary injunction, “irreparable harm will be caused
to
both the applicant Meadowlands and the local patient community, which will be unable to obtain
emergency diagnostics.” (P1’s. OTSC Mot. at 4). In its opposition to Defendant’s motion, Plainti
ff
does not clearly respond to the effect that Siemens’ concession to provide critical reagents has
on
Meadowlands’ request for a preliminary injunction. (See P1’s.

Opp. Br.

at 8). In fact, Plaintiff

appears to agree with Mr. Donnelly that that Troponin, hCG, and Creatinine, which Siemens
agrees
to continue providing, are critical reagents. (Id.). Moreover, Plaintiff does not take except
ion with
the Siemens’ Spreadsheet that identifies certain products and reagents as “Not Critical.”
As to Mr.
Donnelly’s suggestion that Meadowlands can contract with reference laboratories
for the
performance of tests not requiring “critical” reagents, Meadowlands responds that “[i]n
a non
emergent setting, these reagents are important for the timely delivery of care,
something
Meadowlands has made a priority since it came under new ownership in 2010.” (P1’s.
Opp. Br. at
10).

6

With regards to the irreparable harm inquiry, a plaintiff must establish more than
a risk of
irreparable injury. Hoxworth v. Blinder, Robinson & Co., 903 F.2d 186, 205
(3d Cir. 1990). He
must demonstrate “a clear showing of immediate irreparable injury.” Id.
(quoting ECRI v.
McGraw-Hill, Inc., 809 F.2d 223, 225 (3d Cir. 1987)). The Third Circuit
has long held that “the
requisite feared injury or harm must be irreparable—not merely serious
or substantial,” and it
“must be of a peculiar nature, so that compensation in money cannot atone for
it.” Glasco v. Hills,
558 F.2d 179, 181 (3d Cir. 1997). In other words, “[ijnjunctions will not be
issued merely to allay
the fears and apprehensions or to soothe the anxieties of the parties.” Contin
ental Group, Inc. v.
Amoco Chemicals Corp., 614 F.2d 351, 359 (3d Cir. 1980).
The Court finds that Plaintiff has failed to show how irreparable injury will
result if the
Court lifts the TRO. Meadowlands appears to argue that Siemens’ withho
lding of any reagents,
and not just the “critical” ones it has conceded it will supply, will harm
its patient population.
(P1’s, Opp. Br. at 10).

However, Plaintiff does not explain why contracting with reference

laboratories for the performance of non-urgent tests, as Mr. Donnelly sugges
t, will not suffice. In
other words, Meadowlands has not convinced the Court that the only way
to protect its patients is
to enter an injunction mandating Siemens to continue to provide all contrac
ted-for reagents and
supplies.
Plaintiff also contends that if an injunction is not entered, there will be
a delay in treatment
that will result in irreparable harm to Meadowlands’ reputation and good
will. (Id. at 10). While
Plaintiff is correct that harm to reputation and/or good will may
satisfy the irreparable harm
requirement, a plaintiff’s “blanket statement” that failure to issue
a preliminary injunction will
cause irreparable harm to one’s reputation and good will is insufficient.
See Stryker v. Hi-Temp
Specialty Metals, Inc., Civ. No. 11-6384, 2012 WL 715179, *5 (D.N.J
. Mar. 2, 2012); see also

7

American Financial Resources, Inc. v. Money Source, Inc., Civ. No. 14-65 1, 2014
WL 1705617,
*

12 (D.N.J. Apr. 29, 2014). Moreover, irreparable reputational harm is typically, and with
limited

exception, found in the specific context of allegations of trademark
infringement or
misappropriation of proprietary information or trade secrets. See, e.g. Roman
Chariot, LLC v.
JMRL Sales & Service, Inc., Civ. No. 06-626, 2006 WL 4483165,

*

(D.N.J. July 11,2006) (“If

injury to reputation and goodwill outside of the trademark context were irreparable,
[plaintiffj does
not demonstrate sufficient harm to its reputation or good will to warrant
a preliminary
injunction.”). Such is the case because in the trademark and trade secrets arena,
reputation is
“directly endangered by the defendant’s actions” and thus the defendant’s actions
“in and of
themselves” may constitute a harm to the plaintiffs reputation. Bennington Foods
LLC

St. Croix

Rennaissancc Group, LLP. 528 F.3d 176, 179-80 (3d Cir. 2008) (emphasis added)
(discussing
Pappan Enterprises, The. v. flardee ‘s Food Systems, Inc., 43 F.3d 800 (3d Cir.
1998) and
Fitzgerald v. Mountain Laurel Racing, Inc., 607 F.2d 589 (3d Cir. 1979)).
Flere, there is nothing in the record to demonstrate that Siemens’ actions in withho
lding
non-critical reagents and supplies, “in and of themselves,” will result in irrepar
able harm to the
Hospital’s reputation and/or good will.

Bennington Foods, 528 F.3d at 179-80; see also

Bennington Foods, 528 F.3d at 178-79 (reversing the district court’s grant
of a preliminary
injunction after the district court found that plaintiff would suffer an irrepar
able harm to his
reputation for being able to timely deliver products absent a preliminary injunct
ion). To begin,
there is no evidence that the Hospital maintains any particular reputation for timely

care. Plaintiffs

opposition brief merely stated that it has made “timely delivery of care” a “priori
ty” since 2010,
but Plaintiff has not cited to any evidence in the record, nor has the Court found
any evidence, that
Meadowlands in fact has a reputation for timely care. (P1’s.

8

Opp. Br. at 10).

Further, and as noted

above, Meadowlands has not explained why it would not be able to contrac
t with an outside
laboratory to effectuate the timely diagnosis of patients.
For these reasons, the Court finds that Plaintiff has not satisfied its burden of
showing
irreparable harm in the absence of an injunction. That is, no imminent injury
has been established
as the injury must be a presently existing threat, and not a remote or speculative
possibility of
future harm, as appears to be the case here. Acierno v. New Castle County, 40 F.3d
645, 655 (3d
Cir. 1994) (emphasis added). As we have found that Plaintiff “has not met this height
ened pleading
standard and that there is no possibility of irreparable harm on the record before
us, there is no
need to analyze the other prongs of the test.” Bennington Foods, 528 F.3d at 179.

CONCLUSION

For the reasons stated herein, Siemens’ motion to lift temporary restraints (ECF
No. 23) is
hereby granted, with the caveat that Siemens shall continue to supply all critical
reagents and
supplies that the parties have contracted for, including those not otherwise
designated as “Not
Critical” in the Spreadsheet attached as Exhibit K to the Donnelly Affidavit
(ECF No. 23-l2).

IT IS SO ORDERED.

DATED:

December

2015

*.
JOSJ. LINARES
UNJTED STATES DISTRICT JUDGE
Because Meadowlands does not appear to have taken issue with the designation
of certain reagents and supplies in
Exhibit K to the Donnelly Affidavit as “Not Critical,” the Court will assume
that Plaintiff concedes that same are, in
fact, not critical in nature.

9