CARDIONET, INC. et al v. MEDI-LYNX CARDIAC MONITORING, LLC et al

Filing 16

MEMORANDUM OPINION. Signed by Judge Michael A. Shipp on 8/22/2016. (km)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

CARDIONET, INC., et al.,
Plaintiffs,
Civil Action No. 15-8592 (MAS) (TJB)

v.
MEMORANDUM OPINION

MEDI-LYNX CARDIAC MONITORING,
LLC, et al.,
Defendants.

SHIPP, District Judge

This matter comes before the Court on three separate motions to dismiss by Defendants
Medi-Lynx Cardiac Monitoring, LLC ("Medi-Lynx"), Janis Hardill ("Hardill"), and Michael
Solop ("Solop") (collectively, "Defendants") Plaintiffs CardioNet, Inc. ("CardioNet") and MedNet
Healthcare Technologies, Inc.'s ("MedNet") (collectively, "Plaintiffs") Complaint pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF Nos. 6-8.) Plaintiffs opposed the
motions (ECF Nos. 12-14), and Defendants replied (ECF No. 15). The Court has carefully
considered the parties' submissions and decides the matter without oral argument pursuant to Local
Civil Rule 78.1. For the reasons stated below, Defendants' motions are granted.

Background 1

I.

This is a dispute between competing companies regarding the alleged solicitation by MediLynx of Plaintiffs' employees. (See generally Notice of Removal Ex. A ("Compl."), ECF No. 1.)
CardioNet and MedNet are affiliated companies. (Id.

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9.) CardioNet provides "mobile cardiac

outpatient telemetry products and services to physicians, hospitals, and monitoring services in New
Jersey and around the country," and MedNet provides "remote cardiac monitoring products and
services to physicians, hospitals, and monitoring services in New Jersey and around the country."
(Id.

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6, 8.) Defendant Medi-Lynx also provides "remote cardiac monitoring products and

services to physicians, hospitals, and monitoring services, including in New Jersey and
Pennsylvania." (Id.

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10.) Medi-Lynx is Plaintiffs' direct competitor. (Id.

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10.)

Beginning in or about April or May 2015, Medi-Lynx "began a specific campaign to target
Plaintiffs' employees." (Id.

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14.) Hardill and Solop, both former employees of MedNet and

current employees of Medi-Lynx, "began to directly or indirectly contact current employees of
Plaintiffs in order to solicit their employment with Medi-Lynx." (Id.

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15-16.) Between April

25, 2015, and May 25, 2015, ten of Plaintiffs' employees voluntarily resigned to begin
employment with Medi-Lynx.

(Id.~

19.) "Many of the employees who voluntarily resigned from

Plaintiffs and began their employment with Medi-Lynx had been employed in the Clinical
Operations Department."

(Id.~

20.) In correspondence dated May 20, 2015, MedNet demanded

that Medi-Lynx cease and desist from soliciting or hiring Plaintiffs' employees. (Id.

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17-18.)

For the purpose of this motion, the Court accepts the facts alleged in the Complaint as true. See
Phillips v. Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (stating that on a Rule 12(b)(6)
motion to dismiss courts must "accept all factual allegations as true, construe the complaint in the
light most favorable to the plaintiff, and determine whether, under any reasonable reading of the
complaint, the plaintiff may be entitled to relief' ).
2

Plaintiffs alleged that "[t]he solicitation of such a large number of employees, all from
clinical operations, was done with the intent to staff Medi-Lynx's newly opened operation in
Newtown, Pennsylvania with experienced technical employees who had already been trained and
developed by Plaintiffs." (Id.

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21.) Plaintiffs state that Defendants have continued their efforts

to solicit and hire Plaintiffs' employees and that this conduct has harmed their business. (Id.

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27.) In the.Complaint, Plaintiffs assert two counts against Defendants for: (1) employee piracy/
tortious interference with employment relations; and (2) unjust enrichment.
II.

Legal Standard

Rule 8(a)(2) "requires only 'a short and plain statement of the claim showing that the
pleader is entitled to relief,' in order to 'give the defendant fair notice of what the ... claim is and
the grounds upon which it rests."' Bell At/. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957)). On a motion to dismiss for failure to state a claim, a

"defendant bears the burden of showing that no claim has been presented." Hedges v. United
States, 404 F.3d 744, 750 (3d Cir. 2005).

A district court conducts a three-part analysis when considering a Rule 12(b)( 6) motion.
Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). "First, the court must 'tak[e] note of the

elements a plaintiff must plead to state a claim."' Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675
(2009)). Second, the court must accept as true all of a plaintiff's well-pleaded factual allegations
and construe the complaint in the light most favorable to the plaintiff. Fowler v. UPMC Shadyside,
578 F.3d 203, 210-11 (3d Cir. 2009).

The court, however, must disregard any conclusory

allegations proffered in the complaint.

Id.

Finally, once the well-pleaded facts have been

identified and the conclusory allegations ignored, a court must next "determine whether the facts

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alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief."'
Id. at 211 (quoting Iqbal, 556 U.S. at 679).

III.

Analysis

Defendants separately move to dismiss Plaintiffs' Complaint arguing that, under New
Jersey law, Plaintiffs fail to plausibly plead a claim for tortious interference because Plaintiffs'
bare allegations fail to show that Defendants acted with malice. 2 Specifically, Defendants argue
that Plaintiffs' Complaint fails to provide any factual details regarding the circumstances of
Defendants' contacts with Plaintiffs' employees to satisfy the element of malice, because contact
alone is not enough to satisfy the malice requirement. In opposition, Plaintiffs argue that their
allegations of Defendants' solicitation of Plaintiffs' fully trained experienced staff for its newly
opened location are sufficient to defeat Defendants' motions to dismiss based on the Superior
Court of New Jersey's holding in Wear-Ever Aluminum, Inc. v. Townecraft Industries, Inc., 75
N.J. Super. 135 (Ch. Div. 1962).
Under New Jersey law, "[t]he mere persuasion of an employee to change jobs is not
wrongful; but if it is done to injure the employer, it is wrongful." Avtec Indus., Inc. v. Sony Corp.
of Am., 205 N.J. Super. 189, 193 (App. Div. 1985) (citing Wear-Ever Aluminum, Inc., 75 N.J.

Super. at 142). Guided by the decision in Wear-Ever, the Appellate Division in Avtec held that
"[i]t is by the means used that [a defendant's] right to interfere with [an employee's] subsisting

2

Defendants also argue that the Court should conduct a preliminary choice of law analysis "[s]ince
this controversy was brought in New Jersey but involves residents of Pennsylvania who are
employed in Pennsylvania and entities with offices in Pennsylvania who are competing in
Pennsylvania." (Defs.' Moving Brs. 4-5, ECF Nos. 6-1, 7-1, 8-1.) Due to the factual inquiry that
is necessary to properly weigh the Restatement factors and the limited relevant facts contained in
the Complaint; the Court finds it inappropriate at the motion to dismiss stage in this particular case
to decide choice of law. "Since Plaintiffs have made their allegations under New Jersey law, the
Court will apply New Jersey law for the purpose of examining Plaintiffs' claim under the Rule
12(b)(6) standard." Snyder v. Farnam Cos., 792 F. Supp. 2d 712, 721 (D.N.J. 2011).
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employment must be determined." Id. at 194. In the employee piracy context, the Avtec court
found that interference has been established where there was "egregious conduct directed toward
destruction of a competitor's business." Id. at 195 (citing Wear-Ever, 75 NJ. at 141 (finding
defendant used deceitful practices in which it secretly used plaintiffs manager to induce an entire
sales force to desert plaintiff for defendant)).
Here, Plaintiffs allege that: (1) Defendants, including two prior employees of Plaintiffs,
began to directly or indirectly contact current employees of Plaintiffs in order to solicit their
employment with Medi-Lynx (Comp!. ilil 14-16); (2) fourteen of Plaintiffs' employees voluntarily
resigned to begin employment with Medi-Lynx, many of whom worked in the Clinical Operations
Department (id.

ilil 19-20); and (3) Defendants took these actions "with the intent to staff Medi-

Lynx's newly opened operation in Newtown, Pennsylvania with experienced technical employees
who had already been trained and developed by Plaintiffs" (id.

il 21 ). These facts do not show that

Defendants acted without justification or excuse when they hired Plaintiffs' employees. 3 Unlike
the facts of Wear-Ever, Plaintiffs fail to allege any facts in the Complaint regarding the
circumstances surrounding Defendants' contacts with Plaintiffs' employees. Therefore, Plaintiffs
fail to state a claim for tortious interference under New Jersey law and Count One is dismissed.
Additionally, "New Jersey does not recognize unjust enrichment as an independent tort
cause of action." Warma Witter Kreisler, Inc. v. Samsung Elecs. Am., Inc., No. 08-5380, 2009
WL 4730187, at *7 (D.N.J. Dec. 3, 2009) (citing Castro v. NYT Television, 370 N.J. Super. 282,
299 (App. Div. 2004) (explaining that "the role of unjust enrichment in the law of torts is limited

3

Additionally, Plaintiffs allege additional facts not contained within the Complaint in their
opposition brief. A party, however, may not amend its pleadings through arguments or facts
alleged in opposition to a motion to dismiss. See Bell v. City ofPhi/a., 275 F. App'x. 157, 160 (3d
Cir. 2008) (noting that a plaintiff cannot amend the complaint through briefing).
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for the most part to its use as a justification for other torts such as fraud or conversion.")). "Rather,
in the tort setting, 'an unjust enrichment claim is essentially another way of stating a traditional
tort claim (i.e., if defendant is permitted to keep the benefit of his tortious conduct, he will be
unjustly enriched)."' Id. (quoting Steamfitters Local Union No. 420 Welfare Fund v. Philip

Morris, Inc., 171 F.3d 912, 936 (3d Cir. 1999)).

Accordingly, because Plaintiffs' unjust

enrichment claim sounds in tort, Count Two is dismissed.

IV.

Conclusion

For the reasons set forth above, Defendants' motions to dismiss are granted. An order
consistent with this Memorandum Opinion will be entered.

M~

UNITED STATES DISTRICT JUDGE

Dated: August aJ;.2016

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