Smith v. Wright Medical Group et al

Filing 34

MEMORANDUM DECISION AND ORDER taking under advisement 25 Motion to Dismiss for Lack of Jurisdiction. Parties to file an attorneys planning meeting report and submit a proposed scheduling order by 10/5/15 and conduct certain discovery. A supplementary opposition to the Motion may be filed on or before 12/18/15 and a supplementary reply may be filed on or before 12/30/15. Signed by Judge David Nuffer on 9/21/15 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
MARTIN L. SMITH,

MEMORANDUM DECISION AND
ORDER TAKING DEFENDANT’S
MOTION TO DISMISS UNDER
ADVISEMENT

Plaintiff,
v.
WRIGHT MEDICAL GROUP, INC., a
Delaware Corporation, and WRIGHT
MEDICAL TECHNOLOGY, INC., a
Delaware corporation,
Defendants.

Case No. 2:15-cv-00140-DN
District Judge David Nuffer

Defendant Wright Medical Group, Inc. (“WMG”) filed this motion to dismiss
(“Motion”) 1 in response to Plaintiff’s complaint. WMG alleges that dismissal is warranted
because of lack of personal jurisdiction. 2 Plaintiff, Martin L. Smith, opposes the Motion. 3 As
discussed below, Mr. Smith has raised sufficient factual questions concerning the relationship
between WMG and Wright Medical Technology (“WMT”). Therefore, the Motion is TAKEN
UNDER ADVISEMENT.
FACTUAL BACKGROUND
The Complaint alleges, among other things, that WMG is a Delaware corporation with its
principal place of business in Arlington, Tennessee; 4 that WMT is a subsidiary of WMG and is

1

Defendant Wright Medical Group’s Motion to Dismiss for Lack of Personal Jurisdiction (“Motion”), docket no.
25, filed May 13, 2015.
2

Id. at 1.

3

Plaintiff’s Response to Defendant Wright Medical Group’s Motion to Dismiss for Lack of Personal Jurisdiction
(“Opposition Memorandum”), docket no. 27, filed June 12, 2015.

4

Complaint and Jury Demand (“Complaint”) ¶ 2, docket no.1, filed March 3, 2015.

also a Delaware corporation with its principal place of business in Arlington, Tennessee; 5 and
that WMT is registered to do business in Utah. 6
The Complaint further alleges that Mr. Smith suffered injuries after undergoing hip
surgery on January, 9, 2006 at Intermountain LDS Hospital in Salt Lake City, Utah. 7 Mr. Smith
alleges that a Wright Medical PROFEMUR® hip device was implanted in his right hip by an
orthopedic surgeon at Intermountain LDS Hospital. 8 Mr. Smith alleges that in 2013, the
PROFEMUR® hip device implant failed, broke into two pieces inside his body, and had to be
surgically removed. 9 Mr. Smith alleges that he suffered severe physical injuries to his hip and
pelvis as a result of the device’s failure. 10
Mr. Smith advances several causes of action against WMG and WMT, including strict
products liability, 11 negligence, 12 breach of express warranty, 13 breach of implied warranty, 14
and negligent misrepresentation. 15 He alleges that both WMG and WMT were negligent with
regard to the design, manufacture, distribution, and marketing of the PROFEMUR® hip

5

Complaint ¶ 3-4. Declaration of James Lightman ¶ 4, attached as Exhibit A to Motion to Dismiss, docket no. 25-1,
filed May 13, 2015.
6

Complaint ¶¶ 3–4.

7

Id. ¶ 97.

8

Id. ¶ 97.

9

Id. ¶¶ 102–103.

10

Id. ¶ 167.

11

Id. ¶¶ 168–185.

12

Id. ¶¶ 186–193.

13

Id. ¶¶ 194–204.

14

Id. ¶¶ 205–211.

15

Id. ¶¶ 212–220.

2

device. 16 Mr. Smith ultimately alleges Defendant’s negligent omissions were the direct and
proximate cause of his injuries. 17
In response to the Complaint, WMG filed the Motion. WMG argues that “the exercise of
personal jurisdiction over WMG in the State of Utah would violate due process principles”
because WMG, the parent company of WMT, “has not conducted any activities in Utah,” and
“transacts no business, employs no persons, maintains no offices, and owns no real property in
the State of Utah.” 18 Mr. Smith opposes WMG’s Motion.
DISCUSSION
“[W]hen the court’s jurisdiction is contested, the plaintiff has the burden of proving
jurisdiction exists.” 19 “In the preliminary stages of litigation, however, the plaintiff’s burden is
light.” 20 When a motion to dismiss is decided on the basis of affidavits and other written
material, courts must take as true all the allegations in the plaintiff’s complaint only to the extent
they are uncontroverted by the defendant’s affidavit. 21 “If the parties present conflicting
affidavits, all factual disputes must be resolved in the plaintiff's favor . . . .” 22 “However, only the
well pled facts of plaintiff's complaint, as distinguished from mere conclusory allegations, must
be accepted as true.” 23

16

Id. ¶ 188.

17

See, e.g., id. ¶ 192.

18

Motion at 9 (citing Lightman Affidavit ¶ 6).

19

Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995).

20

Id. at 1505 (quoting Doe v. National Med. Servs., 974 F.2d 143, 145 (10th Cir. 1992)).

21

Wenz, 55 F.3d at 1505.

22

Id.

23

Id.

3

In the present case, WMG does not dispute that jurisdiction may be exercised over
WMT, 24 but argues that since “WMG is a Delaware holding company,” and “has no employees,
offices, or real property in the State of Utah,” jurisdiction may not be exercised over WMG. 25
Mr. Smith, on the other hand, contends that WMG’s SEC filings and a variety of press releases
establish WMG’s involvement over the design, manufacture, and marketing of the
PROFEMUR® hip device, and therefore, personal jurisdiction exists over WMG in Utah. 26
While “a court may not automatically exercise jurisdiction over a parent corporation merely
because such jurisdiction may be exercised over the parent’s subsidiary[,]” 27 the press releases
and SEC filings create issues of fact concerning the question of whether WMG exercised the
requisite degree of “control” over WMT to allow the exercise of personal jurisdiction over
WMG. 28 Specifically, there is a question regarding the identity, function, and relationship
between WMG and WMT. The Court finds that further discovery must be conducted before it
resolves these jurisdictional issues. Therefore, WMG’s Motion is TAKEN UNDER
ADVISEMENT until the parties conduct discovery regarding the relationship between WMG
and WMT.

24

Defendant Wright Medical Group’s Reply in Support of its Motion to Dismiss for Lack of Personal Jurisdiction
(“Reply”) at 10, docket no. 28, filed June 24, 2015.
25

Motion to Dismiss at 2.

26

Opposition Memorandum at 8–9.

27

Morrow v. Calico Resources Corp., Case No. 14-cv-03348-MEH, 2015 WL 535342 at *4 (D.Colo. Feb. 9, 2015)
(unpublished) (emphasis in original).
28
Pro Axess, Inc. v. Orlux Distribution, Inc.428 F.3d 1270, 1278 (10th Cir. 2005) (“Companies conducting business
through their subsidiaries can qualify as transacting business in a state [for purposes of specific personal
jurisdiction], provided the parent exercises sufficient control over the subsidiary.”).

4

ORDER
IT IS HEREBY ORDERED that this Motion 29 is TAKEN UNDER ADVISEMENT.
IT IS FURTHER ORDERED that the parties shall meet and confer, and on or before
October 5, 2015, file an attorneys’ planning meeting report and submit a proposed scheduling
order as outlined at http://www.utd.uscourts.gov/documents/ipt.html.
IT IS FURTHER ORDERED that jurisdictional discovery regarding the relationship of
WMG and WMT and the involvement of WMG in the manufacture and marketing of the Wright
Medical PROFEMUR® hip device is now permitted.
•

On or before October 5, 2015 Defendants shall make disclosures as described in Fed.
R. Civ. P. 26(a)(1)(A)(i) and (ii) on those subjects.

•

Written discovery requests and notices of deposition on these subjects may issue
without further delay.

•

This discovery may occur simultaneously with other discovery.

•

If a notice of deposition under Fed. R. Civ. P. 30(b)(6) is noticed on these subjects
only, that deposition shall not prevent further deposition of a witness under that rule
on other subjects.

29

Defendant Wright Medical Group’s Motion to Dismiss for Lack of Personal Jurisdiction (“Motion”), docket no.
25, filed May 13, 2015.

5

IT IS FURTHER ORDERED that Plaintiff may file a supplementary opposition to the
Motion on or before December 18, 2015. Defendant WMG may file a supplementary reply on or
before December 30, 2015.
Dated September 21, 2015.
BY THE COURT:
____________________________
David Nuffer
United States District Judge

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