LABMD, INC. v. TIVERSA HOLDING CORP. et al

Filing 129

MEMORANDUM OPINION. Signed by Judge Mark R. Hornak on 2/22/16. (bdb) (Main Document 129 replaced on 2/22/2016) (bdb). Modified on 2/22/16. (bdb) Document Modified/Replaced on 2/22/16 to correct typographical error. (bdb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
LABMD, INC.,
Plaintiff,
v.
TIVERSA HOLDING CORP. formerly
known as TIVERSA, INC.; ROBERT J.
BOBACK; M. ERIC JOHNSON; DOES 110
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)

Civil Action No. 2:15-cv-92
Judge Mark R. Hornak

MEMORANDUM OPINION
Mark R. Hornak, United States District Judge
On January 8, 2016 this Court issued a Memorandum Order, ECF No. 115, that largely
adopted Chief Magistrate Judge Kelly’s Report and Recommendation (“R&R”), ECF No. 70,
and dismissed LabMD’s Complaint in its entirety. Specifically, as to the Tiversa Defendants,
Counts I, VII, and VIII were dismissed as time barred and Counts II, III, IV, V, and VI were
dismissed on substantive grounds; as to Defendant Johnson, Counts I, II, III, VII, and VIII were
dismissed as time barred and Count VI was dismissed on substantive grounds.1
LabMD has now filed a Motion for Reconsideration, ECF No. 117, which the parties
have exhaustively briefed, ECF Nos. 118, 122, 123, 124. That Motion chiefly argues that: (1) the
application of the Pennsylvania Savings Statute, 42 Pa. Cons. Stat. § 5535, to the RICO claims
was reversible error; (2) under Jewelcor, Inc. v. Karfunkel, 517 F.3d 672 (3d Cir. 2008), the

1

Counts I, VII, and VIII were dismissed with prejudice as to all Defendants and Counts II and III were dismissed
with prejudice as to Defendant Johnson only. All other counts were dismissed without prejudice and leave to amend
was granted. An Amended Complaint has now been filed. ECF No. 126.

Pennsylvania Savings Statute does not apply to any claims here; (3) equitable tolling2 applies
because LabMD mistakenly initiated this suit in the wrong forum; and (4) the discovery rule
and/or equitable tolling preclude dismissal of claims against Defendant Johnson on timeliness
grounds.
Upon review of the papers and relevant legal and decisional authorities, the Court
concludes that application of the Pennsylvania Savings Statute was in error. That conclusion,
however, does not change the ultimate outcome of the Court’s previous ruling. For the reasons
stated below, LabMD’s Motion for Reconsideration will be denied.
I. STANDARD OF REVIEW
Motions for reconsideration are appropriate only “to correct manifest errors of law or fact
or to present newly discovered evidence.” Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir.
1985). Such a motion will “only be granted if the moving party demonstrates (1) an intervening
change in the controlling law; (2) the existence of new evidence that was unavailable when the
court issued its order; or (3) the need to correct a clear error of law or fact to prevent a manifest
injustice.” Peerless Ins. Co. v. Pa. Cyber Charter Sch., 19 F. Supp. 3d 635, 651 (W.D. Pa. 2014).
“The moving party bears a heavy burden to demonstrate that an order should be reconsidered,”
and rearguing or re-litigating old matters or expressing disagreement with the earlier ruling are
inappropriate bases for such a motion. Wonderland Nurserygoods Co. v. Thorley Indus., LLC,
No. 12-196, 2014 WL 2608117, at *1 (W.D. Pa. June 11, 2014).

2

While equitable tolling may not be “generally amenable to resolution on a Rule 12(b)(6) motion,” Cunningham et
al. v. M&T Bank Corp. et al., No. 15-1412, slip op. at 2 (3d Cir. Feb. 19, 2016) (citing In re Cmty. Bank of N. Va.,
622 F.3d 275, 301–02 (3d Cir. 2010)), this issue is not so fact-bound as to preclude consideration here. Equitable
tolling in this case primarily turns on set dates—when statements were published, when a suit was filed, when that
suit was terminated, etc.—so it is really just a matter of navigating a calendar and doing simple math. Based on the
uncontradicted evidence that LabMD itself has put into the record, dealing with equitable tolling at this juncture
makes good sense. That this is a motion for reconsideration, with a different judicial calculus than a regular motion
to dismiss also weighs in favor of deciding the issue now, rather than punting until after some discovery that will not
in any event change that calendar and the court docket information.

2

II. DISCUSSION
Count I: Conversion
Count I was dismissed as time-barred as to all Defendants. ECF No. 115, at 1. This Court
adopted the R&R’s analysis and conclusion as to this Count in full. The R&R invoked the
Pennsylvania Savings Statute, 42 Pa. Cons. Stat. § 5535(a)(1), and determined that it gave
LabMD one year from the termination of the Georgia action to file this suit in this Court. ECF
No. 70, at 6. Because it concluded that the Georgia action ended on February 5, 2013 and this
action was not filed until January 21, 2015, the R&R concluded that the Savings Statute did not
save this action.
Upon further review, the Court now concludes that its application of the Savings Statute
was in error. The Third Circuit in Jewelcor, Inc. v. Karfunkel, 517 F.3d 672 (3d Cir. 2008) held
that the Savings Statute does not apply unless the “civil action is commenced in and terminated
by a Pennsylvania state court,” id. at 675. While the Circuit’s holding was somewhat
anticipatory, see id. at 676 n.4, it is binding on this Court. Thus, the Court concludes the
Pennsylvania Savings Statute has no application here.
LabMD urges that this conclusion compels a reversal of the Court’s dismissal. ECF No.
118, at 5, 10. LabMD says that without the Savings Statute, it had until October 6, 2015 to file
this case. Id. at 10. The Court does not agree.
First, LabMD’s argument rests on a tortured understanding of the Savings Statute. The
purpose of that statute is to give parties more time to file, irrespective of the statute of
limitations. See 42 Pa. Cons. Stat. § 5535(a)(1). LabMD so recognized in its earlier briefs. ECF
No. 63, at 16 (applying the Savings Statute here “would toll the statute of limitations not only
during the pendency of the Georgia Action, but for a year after its termination.”). Simply put,

3

LabMD had all along been urging this Court to apply the Savings Statute it now says the Court
must ignore. But contrary to LabMD’s current argument, that would in no way shorten the
statute of limitations.
Nevertheless, the Court’s consideration of Jewelcor compels it to disregard the Savings
Statute. According to LabMD, this means that the time it spent mistakenly litigating in Georgia
(by its count, 719 days) is equitably tolled and its current conversion claims are timely. ECF No.
118, at 10. But that argument fails to account for the pronouncement of Pennsylvania state law
the Third Circuit cited in Jewelcor: “an action in one state does not toll the running of the statute
in another state.” Jewelcor, 517 F.3d at 675 (citing Royal-Globe Ins. Co. v. Hauck Mfg. Co., 335
A.2d 460, 462 (Pa. Super. Ct. 1975). As the Jewelcor Court noted, Pennsylvania law provides
the rule of decision on this point, and this is the state of the law in situations where the Savings
Statute does not apply, like this one. So no tolling, equitable or otherwise is appropriate under
Pennsylvania law.3
So then, the Court must determine anew when the statute of limitations on the conversion
claim ran. The Court concludes that the conversion claim was established by September 30, 2010
letter (which specifically mentioned conversion of the “1718 file”) so the statute of limitations
began to run then. Three hundred eighty-four (384) days elapsed from when the elements of
LabMD’s conversion claim accrued until the filing of the Georgia action.4 The R&R as adopted
noted that the Georgia action terminated on February 5, 2013 when the Eleventh Circuit affirmed
the district court’s dismissal. ECF No. 70, at 6. LabMD now argues that the Georgia action
3

Equitable tolling is just that—equitable. The Court finds no basis in the record to exercise is discretion to
essentially give an equitable break to a party who waited nearly two years after its first action was over to file here.
4

The R&R as adopted by this Court stated that the elements of the conversion claim were established “at the latest,
by the filing of the Georgia action in October 2011.” ECF No. 70, at 5–6. That statement was not, and is not, an
explicit finding of when the statute of limitations began to run. Rather, LabMD received the benefit of the doubt as
to the latest possible date that a conversion claim could be said to have been established.

4

actually terminated when the period for filing a petition for a writ of certiorari ran: October 6,
2013. ECF No. 118, at 3. But Jewelcor’s forecast of Pennsylvania law leads the Court to
conclude that the Georgia action did not toll the two year statute of limitations, so LabMD had
until September 30, 2012 to file its claim here. That it did not do.
Further, even if the Georgia action did toll the statute of limitations, and accepting
LabMD’s new and improved termination date of October 6, 2013 as the one, true, correct date
(which the Court does here only to dispose of LabMD’s argument), the conversion claim is still
time barred. LabMD would have had 730 days total (two years) to file the claim. Three hundred
and eighty-four of those days ticked by before it filed the Georgia action. Therefore, after
October 6, 2013 it would have had 346 more days to file in this Court (or until roughly
September 17, 2014). It did not file this action until January 21, 2015. The claim is time barred.
Finally, we can’t forget that consideration of the Savings Statute in the R&R came at
LabMD’s urging. See ECF No. 63, at 15–16. So to the extent it wishes to now have a do-over,
LabMD has waived any argument premised on the application (or more precisely, the nonapplication) of the Savings Statute. Motions for reconsideration are not to be “used to present
new legal theories or arguments which could have been made in support of the first motion.”
Payne v. Deluca, No. 02-1927, 2006 WL 3590014, at *2 (W.D. Pa. Dec. 11, 2006) (Hardiman,
J.).
The Motion for Reconsideration will be denied as to Count I.
Count II: Defamation
Count II was dismissed on substantive grounds as to the Tiversa Defendants and
dismissed as time barred as to Defendant Johnson. ECF No. 115, at 1–2. Because the Motion for

5

Reconsideration raises only statute of limitations issues, the dismissal of this Count as to the
Tiversa Defendants will not be disturbed.
As to Defendant Johnson, LabMD argues that “[t]he Court’s ruling fails to account for
the discovery rule or any equitable estoppel or equitable tolling of the statute of limitations.”5
ECF No. 118, at 11. In the absence of any citation to authority, LabMD charges that it would be
reversible error to “altogether reject [those] equitable doctrines.” Id.
As an initial matter, the Court dismissed this claim as to Defendant Johnson with
prejudice because it determined that the allegedly defamatory statements occurred in April 2009
and on February 23, 2010. ECF No. 115, at 1–2. The statute of limitations for defamation under
Pennsylvania law is one year. 42 Pa. Cons. Stat. § 5523. Therefore, the absolute latest the
defamation claim could be filed was February 23, 2011.6 The Georgia action was filed in
October 2011. Therefore, the claims were time barred then and there, and no amount of equitable
anything saves them.
The Motion for Reconsideration will be denied as to Count II against Defendant Johnson.
Count III: Tortious Interference with Business Relations
Count III was dismissed on substantive grounds as to the Tiversa Defendants and
dismissed as time barred as to Defendant Johnson. ECF No. 115, at 2. Because the Motion for
Reconsideration raises only statute of limitations issues, the dismissal of this Count as to the
Tiversa Defendants will not be disturbed.

5

This argument reflects the smorgasbord approach to pleading and argument that pervades a number of LabMD’s
papers.
6

This conclusion also renders the discovery rule inapplicable because that rule has to do when the limitations period
begins to run, rather than events that can stop the clock once it starts running. See Cunningham, No. 15-1412, slip
op. at 11.

6

As with Count II, LabMD argues that at least one of the discovery rule or equitable
estoppel or equitable tolling applies to Count III. But also like Count II, the statute of limitations
on tortious interference claims that are based on alleged defamatory statements is one year under
Pennsylvania law. Evans v. Phila. Newspapers, Inc., 601 A.2d 330, 334–35 (Pa. Super. Ct.
1991). The tortious interference claims against Defendant Johnson are unquestionably based on
his alleged defamatory statements that occurred, as discussed above, in April 2009 and February
2010. Thus, this count too was time barred when the Georgia action was filed and it remains time
barred here.7
The Motion for Reconsideration will be denied as to Count III against Defendant
Johnson.
Count IV: Fraud
Count IV was dismissed based on substantive deficiencies and leave to amend was
granted. ECF No. 115, at 2–3. The Motion for Reconsideration does not raise any argument that
the substantive dismissal was in error so the Motion for Reconsideration will be denied as to this
Count.
Count V: Negligent Misrepresentation
Count V was dismissed based on substantive deficiencies and leave to amend was
granted. ECF No. 115, at 3. The Motion for Reconsideration does not raise any argument that the
substantive dismissal was in error so the Motion for Reconsideration will be denied as to this
Count.

7

Moreover, it is plain that the discovery rule does not apply where the defamation was not done in a manner meant
to conceal the subject matter of the defamation. Barrett v. Catacombs Press, 64 F. Supp. 2d 440, 446 (E.D. Pa.
1999). Johnson’s statements were published in Computerworld magazine and an academic article. Despite there
being deep recesses of the academy into which the most fervently interested person dares not wander, such
publications cannot by any measure be said to conceal the subject matter of the defamation.

7

Count VI: Civil Conspiracy
Count VI was dismissed based on substantive deficiencies and leave to amend was
granted. ECF No. 115, at 3. The Motion for Reconsideration does not raise any argument that the
substantive dismissal was in error so the Motion for Reconsideration will be denied as to this
Count.
Counts VII and VIII: RICO
Counts VII and VIII were dismissed as time barred as to all Defendants. ECF No. 115, at
3. Notwithstanding its prior positions, LabMD argues now that the Pennsylvania Savings Statute
does not apply, and as discussed above, the Court agrees.
LabMD, however, mischaracterizes what Chief Magistrate Judge Kelly concluded and
what this Court adopted. In fact, the federal four year statute of limitations was the foundation of
the holding. ECF No. 70, at 17 (“The statute of limitations for a civil RICO claim is four years.”)
(citing Rotella v. Wood, 528 U.S. 549, 552 (2000)); ECF No. 115, at 3 (“the Report and
Recommendation is adopted in full”). So even without the Savings Statute adding an additional
year of time to file, the federal four year statute of limitations would have expired sometime in
2014 (four years after the claim accrued in 2010). This action was not filed until January 2015,
so it is time barred.
But LabMD’s arguments are not really about federal statutes of limitations preempting
state law or the application of the Savings Statute at all. Instead they rely, as they must, on
tolling during the pendency of the Georgia action. See ECF No. 118, at 7. Following a long
exegesis of the salutary purposes of equitable tolling, LabMD eventually gets to the rub: “the
Court should not treat any of the applicable statutes of limitations as if they were strict statutes of
repose with no consideration of the facts or equitable principles.” Id. at 8. This argument has the

8

rare qualities of both hitting the nail on the head but completely missing the board with the same
swing of the hammer.
First, the federal four year RICO statute of limitations is surely subject to equitable
tolling because it is, after all, a statute of limitations. See CTS Corp. v. Waldburger, 134 S. Ct.
2175 (2014). But equitable tolling is an equitable remedy—filing in the wrong forum does not
guarantee a party tolling as a matter of right. As the Third Circuit recently reaffirmed, equitable
tolling “can rescue a claim otherwise barred as untimely by a statute of limitations when a
plaintiff has been prevented from filing in a timely manner due to sufficiently inequitable
circumstances.” Cunningham et al. v. M&T Bank Corp. et al., No. 15-1412, slip op. at 7 (3d Cir.
Feb. 19, 2016) (citing Santos ex rel. Beato v. United States, 559 F.3d 189, 197 (3d Cir. 2009)).
However, it is “an extraordinary remedy which should be extended only sparingly,” id. (citing
Hedges v. United States, 404 F.3d 744, 751 (3d Cir. 2005)).
Further, the purposes of statutes of limitations—requiring “diligent prosecution of known
claims” and “preventing surprises through [plaintiffs’] revival of claims that have been allowed
to slumber”—strongly counsel against equitable tolling here. See Waldburger, 134 S. Ct. at
2183. Indeed, equitable tolling requires LabMD to demonstrate reasonable diligence in pursuit of
their claims, meaning that they “must establish that [they] pursued the cause of [their] injury with
those qualities of attention, knowledge, intelligence and judgment which society requires of its
members for the protection of their own interests and the interests of others.” Cunningham, No.
15-1412, slip op. at 8 (internal alterations and quotation marks omitted). It took LabMD nearly
two years after the Georgia action was done, done, done to file this one. LabMD has offered no
compelling reason for the delay and such delinquency is certainly not “reasonably diligent
prosecution.” Moreover, the RICO claims were not even asserted in the Georgia action, so

9

despite the years of antagonistic, belligerent litigation between these parties, equitable tolling is
inappropriate because statutes of limitations are also meant “to protect defendants from claims of
which they have not received notice within a reasonable time after they accrued.” See Advanced
Power Sys., Inc. v. Hi-Tech Sys., Inc., 801 F. Supp. 1450, 1456 n.6 (E.D. Pa. 1992). Simply put,
a prior lawsuit that did not even include these claims would not act to “equitably toll” the long
period of delay in their assertion here.
The bottom line is that even giving LabMD’s position a generous benefit of the doubt, the
Court should not equitably toll these statutes of limitations. LabMD’s Motion is most accurately
characterized as an attempted second (or third) bite at the apple after its arguments were not
accepted before. But it is plain that there was no intervening change in the law, no fundamental
misunderstanding of the law or the facts, and no new evidence that changes, or should change,
the result of the involved dismissal Order.
It would appear to the Court that by this Motion for Reconsideration, LabMD decided to
switch its position on the Savings Statute, and then essentially rehash slightly repackaged
arguments as to everything else. Not only is that wholly inconsistent with the high and exacting
standard for reconsideration, it also runs counter to the obligations of the Court and the parties
under Rule 1 of the Federal Rules of Civil Procedure. In short, this has gone on long enough.8

8

Jones v. United States, 135 S. Ct. 8, 9 (2014) (Scalia, J., dissenting from denial of certiorari).

10

III. CONCLUSION
LabMD’s Motion for Reconsideration is DENIED.

s/ Mark R. Hornak
Mark R. Hornak
United States District Judge

Dated: February 22, 2016
cc:

All counsel of record

11