Bays et al v. CorCell Inc. et al
Filing
30
MEMORANDUM OPINION AND ORDER granting Progenitor Cell Therapy, LLC's 4 MOTION to Dismiss for Lack of Personal Jurisdiction; further directing that Progenitor's additional motions to dismiss for improper venue and to transfer for forum n on conveniens are denied without prejudice as moot. Denying without prejudice Bergen Community Blood Center's initial 6 MOTION to Dismiss; and granting Bergen Community Blood Center's 8 AMENDED MOTION to Dismiss for Lack of Personal Jurisdiction. Denying without prejudice Cord Blood America Inc.'s 9 MOTION to Dismiss. Further directing as follows: plaintiffs are given leave until 7/16/2012 to conduct jurisdictional discovery respecting CorCell and Cord Blood's contacts with this forum; and that Cord Blood is given leave, by motion, to renew its challenge to personal jurisdiction by 7/23/2012. Signed by Judge John T. Copenhaver, Jr. on 5/8/2012. (cc: attys; any unrepresented parties) (cbo)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
LINDSAY BAYS,
individually and as Mother,
Guardian, and Next of Friend to
LUKE BAYS,
Minor child,
Plaintiffs,
v.
Civil Action No. 2:11-0939
CORCELL INC.,
a Corporation, and
CORD BLOOD AMERICA,
a Corporation, and
PROGENITOR CELL THERAPY, LLC,
a Corporation and
BERGEN COMMUNITY BLOOD CENTER
a Corporation,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending are defendant Progenitor Cell Therapy, LLC's
("Progenitor"), motions to dismiss for lack of personal
jurisdiction, to dismiss for improper venue, and to transfer due
to forum non conveniens, filed November 30, 2011, defendant
Bergen Community Blood Center’s ("Bergen") motion and amended
motion to dismiss for lack of personal jurisdiction, filed
November 30, 2011, and defendant Cord Blood America Inc.’s
("Cord Blood") motion to dismiss, filed December 5, 2011.
Bergen’s amended motion to dismiss is identical to the
motion it originally filed seeking that same relief except for
the addition of an exhibit inadvertently omitted.
It is,
accordingly, ORDERED that the initial motion to dismiss be, and
it hereby is, denied without prejudice.
I.
Plaintiff Lindsay Bays is a West Virginia resident.
She is the guardian, next friend, and mother of Luke Bays.
is four-years old.
Jersey.
Luke
CorCell is a citizen of Pennsylvania and New
It is a wholly-owned subsidiary of Cord Blood, which is
a citizen of Florida and Nevada.
Delaware and New Jersey.
Progenitor is a citizen of
Bergen is a New Jersey citizen.
On February 12, 2007, Ms. Bays and her husband
contracted with CorCell under a Participation Agreement to
collect and store the blood from her umbilical cord at the time
of Luke's birth.
CorCell had previously marketed and displayed
its services to Ms. Bays as a means for preserving stem cells.
Those stem cells are said to allow the rebuilding of an
individual's blood system to allow for other types of
regenerative therapies.
CorCell marketed its services as
2
allowing for the treatment and improvement of life quality for
those Bays' family members who might fall prey to a serious
illness such as leukemia, anemia, Hodgkins Disease, Alzheimer's
disease and cerebral palsy.
At the same time that the Participation Agreement was
executed, an Informed Consent and Release accord was signed by
Ms. Bays and her husband.
It provided materially as follows:
As a participant in The CorCell Program, I, on behalf
of myself, my unborn child . . . hereby release and
forever discharge CorCell . . . or any or its
affiliates, successors, assigns, officers, directors,
employees, agents, independent contractors and
subcontractors from any kind and all actions, causes
of action, claims and demands and any and all other
claims of every kind, nature and description
whatsoever, both in law and equity, which may arise
from or relate in any way to my participation in The
CorCell Program, and/or the collection or transport of
[any sample] contemplated hereunder, and agree not to
institute any action or suit against said parties
except if such actions arise out of willful or
malicious conduct by CorCell . . . .
Also, as a participant in The CorCell Program, I, on
behalf of myself and my unborn child . . . agree, that
if CorCell is found liable for willful or malicious
conduct, the amount of damages that you [sic] may
recover from CorCell shall not be greater than and
shall be limited to the amount of money paid by me . .
. to CorCell under this Agreement. CorCell will not
be liable for any other damage. CorCell will only be
responsible for exercising ordinary care in the
performance of its duties under this Agreement.
CorCell will not be liable for any damage caused by
third parties. On surrender of the Cord Blood, all
3
liability of CorCell will terminate. You should
understand that CorCell is not making any warranty
with respect to the services performed by CorCell
under this Agreement.
I understand the meaning and consequences of this
Informed Consent and Release, having discussed it with
my attorney to the extent that I deemed appropriate.
(Inform. Consent and Rel. at 1).
On February 26, 2007, Luke was born at Women and
Children's Hospital ("the hospital") in Charleston.
Pursuant to
the Participation Agreement, the umbilical cord cell blood ("the
sample") was collected by the hospital and sent to CorCell's
lab.
When the sample arrived, CorCell transferred it to a
Bergen storage facility pursuant to a contract between those two
entities.
In October of 2007, however, CorCell ceased using
Bergen's storage facility.
It contracted instead with
Progenitor, which maintained a New Jersey storage facility.
Ms.
Bays paid monthly storage fees to Cord Blood, not CorCell, to
assure the safekeeping of the sample in the event it was needed.
As Luke matured, developmental delays appeared.
At
two years of age, he was diagnosed with cerebral palsy. In June
2009, Ms. Bays was referred to the Pediatric Blood and Marrow
Transplant Program ("Program") at Duke University.
The planned
course of treatment involved use of the sample as a therapy for
4
Luke’s condition.
Following preliminary screening, the Program
accepted Luke as a candidate for autoreinfusion treatment.
The autoreinfusion therapy was planned for September
22, 2009.
During the retrieval and pre-shipping process for the
sample, however, CorCell and Progenitor noticed barcode
discrepancies.
This raised serious questions respecting whether
the sample belonged to Ms. Bays.
Laboratory testing of the sample followed, which was
designed to confirm that it originated with Ms. Bays.
sample was then shipped to the Program.
The
Upon receipt of the
sample, however, the Program noted labeling concerns that
revived the earlier uncertainty about the sample's origin.
That
uncertainty led the Program to conclude that the medical risks
of the planned autoreinfusion treatment were too great.
On
October 2, 2009, Ms. Bays was informed by the Program at Duke
that it was rescinding Luke's admission.
As part of its quality control protocol, Cord Blood,
not CorCell, conducted an internal investigation into the
matter.
It concluded that the sample was first mislabeled by
Bergen and then shipped to the Program by Progenitor without
accompanying documentation confirming its identity.
5
On September 21, 2011, Ms. Bays instituted this action
in the Circuit Court of Kanawha County.
She alleges claims for
(1) breach of contract by CorCell, along with its alleged
"negligent[] hiring and . . . [retention]" of Bergen and
Progenitor, (2) breach of contract by Bergen and Progenitor of
their written accord with CorCell and Cord Blood, a contract to
which Ms. Bays alleges she is a third-party beneficiary, (3)
negligence against all defendants, (4) violation by all
defendants of the West Virginia Medical Professional Liability
Act ("MPLA"), West Virginia Code sections 55–7B–1, et seq.,
assuming arguendo that the MPLA applies under these
circumstances, (5) intentional infliction of emotional distress
by all defendants, and (6) successor liability.
She seeks
compensatory and punitive damages.
Progenitor moves to dismiss for lack of personal
jurisdiction and improper venue or, in the alternative, to
transfer due to forum non conveniens.
for lack of personal jurisdiction.
Bergen moves to dismiss
Cord Blood moves to dismiss
for lack of personal jurisdiction and failure to state a claim.
6
II.
A.
Governing Standards
1. Rule 12(b)(6)
Federal Rule of Civil Procedure 8(a)(2) requires that
a pleader provide “a short and plain statement of the claim
showing . . . entitle[ment] to relief.”
Fed. R. Civ. P.
8(a)(2); Erickson v. Pardus, 551 U.S. 89, 93 (2007).
Rule
12(b)(6) correspondingly permits a defendant to challenge a
complaint when it “fail[s] to state a claim upon which relief
can be granted . . . .”
Fed. R. Civ. P. 12(b)(6).
The required “short and plain statement” must provide
“‘fair notice of what the . . . claim is and the grounds upon
which it rests.’”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
545 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957),
overruled on other grounds, Twombly, 550 U.S. at 563); see also
Anderson v. Sara Lee Corp., 508 F.3d 181, 188 (4th Cir. 2007).
In order to survive a motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’”
Ashcroft v.
Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S.
7
at 570); see also Monroe v. City of Charlottesville, 579 F.3d
380, 386 (4th Cir. 2009).
Application of the Rule 12(b)(6) standard requires
that the court “‘accept as true all of the factual allegations
contained in the complaint . . . .’”
Erickson, 551 U.S. at 94
(quoting Twombly, 550 U.S. at 555-556); see also South Carolina
Dept. Of Health And Environmental Control v. Commerce and
Industry Ins. Co., 372 F.3d 245, 255 (4th Cir. 2004) (quoting
Franks v. Ross, 313 F.3d 184, 192 (4th Cir. 2002)).
The court
must also “draw[] all reasonable . . . inferences from th[e]
facts in the plaintiff's favor . . . .”
Edwards v. City of
Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).
2. Personal Jurisdiction
Personal jurisdiction differs from subject-matter
jurisdiction.
It is designed to protect an individual liberty
interest rather than an institutional interest.
J. McIntyre
Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780, 2789 (2011)
(plurality); Constantine v. Rectors and Visitors of George Mason
University, 411 F.3d 474, 480 (4th Cir. 2005); Insurance Corp.
of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694,
702 (1982) (“The requirement that a court have personal
8
jurisdiction . . . represents a restriction on judicial power .
. . as a matter of individual liberty.”).
A Rule 12(b)(2) motion to dismiss for lack of personal
jurisdiction involves both procedural and substantive
components. On the procedural side,
the plaintiff ultimately bears the burden of proving
to the district court judge the existence of
jurisdiction over the defendant by a preponderance of
the evidence. Combs v. Bakker, 886 F.2d 673, 676 (4th
Cir. 1989). “But when, as here, the court addresses
the question on the basis only of motion papers,
supporting legal memoranda and the relevant
allegations of a complaint, the burden on the
plaintiff is simply to make a prima facie showing of a
sufficient jurisdictional basis to survive the
jurisdictional challenge.”
New Wellington Financial Corp. v. Flagship Resort Development
Corp., 416 F.3d 290, 294 (4th Cir. 2005) (emphasis added)
(citations omitted); Mitrano v. Hawes, 377 F.3d 402, 407 (4th
Cir. 2004); Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs.,
Inc., 334 F.3d 390, 396 (4th Cir. 2003).
Importantly, “‘[a] threshold prima facie finding . . .
[of] personal jurisdiction . . . does not finally settle the
issue; plaintiff must eventually prove the existence of personal
jurisdiction by a preponderance of the evidence, either at trial
or at a pretrial evidentiary hearing.’”
New Wellington, 416
F.3d at 294 n.5 (quoting Production Group Int'l v. Goldman, 337
F. Supp.2d 788, 793 n. 2 (E.D. Va. 2004) (citation omitted)).
9
Respecting the substantive component, the nonmovant is
First, he must identify, and bring the
faced with two hurdles.
nonresident within, the terms of an applicable state long-arm
statute.
Second, the nonmovant must show that the exercise of
personal jurisdiction would be consistent with the Due Process
Clause of the Fourteenth Amendment.
See Consulting Engineers
Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009);
Mitrano, 377 F.3d at 407; English & Smith v. Metzger, 901 F.2d
36, 38 (4th Cir. 1990).
Inasmuch as our court of appeals has held that the
West Virginia long-arm statute is coextensive with the proper
reach of due process,
In re Celotex Corp., 124 F.3d 619, 627
(4th Cir. 1997), the two-part inquiry merges into one, namely,
whether the exercise of personal jurisdiction over the
nonresident defendant will comport with due process.
The due process requirement is satisfied if the
defendant has “minimum contacts” with the forum.
These contacts
must be of a quality and quantum that requiring the nonresident
party to defend its interests within the state would “not offend
traditional notions of fair play and substantial justice.”
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
(internal quotation marks omitted); Goodyear Dunlop Tires
10
Operations, S.A. v. Brown, 131 S. Ct. 2846, 2848 (2011);
Mitrano, 377 F.3d at 407; Carefirst, 334 F.3d at 396.
In sum, “[a] defendant should be able to anticipate
being sued in a court that can exercise personal jurisdiction
over him; thus, to justify an exercise of jurisdiction, a
defendant's actions must have been ‘directed at the forum state
in more than a random, fortuitous, or attenuated way.’”
Mitrano, 377 F.3d at 407 (citing ESAB Group, Inc. v. Centricut,
Inc., 126 F.3d 617, 625 (4th Cir. 1997)); ePlus, 313 F.3d at
176.
Put another way, “there must ‘be some act by which the
defendant purposefully avails itself of the privilege of
conducting activities within the forum State, thus invoking the
benefits and protections of its laws.’”
Base Metal Trading,
Ltd. v. OJSC "Novokuznetsky Aluminum Factory, 283 F.3d 208, 213
(4th Cir. 2002) (quoting Hanson v. Denckla, 357 U.S. 235, 253
(1958); see also Burger King Corp. v. Rudzewicz, 471 U.S. 462,
474-76 (1985).
The standard for determining whether a court may
exercise personal jurisdiction over a nonresident defendant
depends on whether that defendant's contacts with the forum
state provide the basis for the suit. See Mitrano, 377 F.3d at
406-07; Carefirst, 334 F.3d at 397.
11
If so, the court applies
the standard for specific jurisdiction, as more fully discussed
in the recent Goodyear decision:
First, the Court recognized that jurisdiction could be
asserted where the corporation's in-state activity is
“continuous and systematic” and gave rise to the
episode-in-suit. It also observed that the commission
of “single or occasional acts” in a State may be
sufficient to render a corporation answerable in that
State with respect to those acts, though not with
respect to matters unrelated to the forum connections.
These two categories compose what is now known as
“specific jurisdiction.”
Goodyear, 131 S. Ct. at 2848-49 (citations omitted).
If the specific contacts do not provide the basis for
the suit, the International Shoe standard may still be satisfied
in terms of the second basis for the exercise of judicial power,
namely, general jurisdiction, explained more fully in the recent
plurality opinion in J. McIntyre:
A person may submit to a State's authority in a number of
ways. There is, of course, explicit consent. Presence
within a State at the time suit commences through service
of process is another example. Citizenship or domicile -or, by analogy, incorporation or principal place of
business for corporations -- also indicates general
submission to a State's powers. Each of these examples
reveals circumstances, or a course of conduct, from which
it is proper to infer an intention to benefit from and thus
an intention to submit to the laws of the forum State.
These examples support exercise of the general jurisdiction
of the State's courts and allow the State to resolve both
matters that originate within the State and those based on
activities and events elsewhere. By contrast, those who
live or operate primarily outside a State have a due
process right not to be subjected to judgment in its courts
as a general matter.
J. McIntyre, 131 S. Ct. at 2787 (citations omitted).
12
While the standards governing general jurisdiction are
essentially confined to the foregoing excerpt, the requirements
for specific jurisdiction require coverage in greater depth.
In
determining whether specific jurisdiction exists, the court
considers (1) the extent to which the defendant has purposefully
availed himself of the privilege of conducting activities in the
state; (2) whether the plaintiff's claims arise out of those
activities directed at the state; and (3) whether the exercise
of personal jurisdiction would be constitutionally reasonable.
Mitrano, 377 F.3d at 407; Carefirst, 334 F.3d at 397; ALS Scan,
Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th
Cir. 2002) (alteration & internal quotation marks omitted).
The reasonableness inquiry is guided by additional
factors, as noted by Judge Wilkinson in reliance upon settled
precedent: “Overall, courts ‘must consider [1] the burden on the
defendant, [2] the interests of the forum State, and [3] the
plaintiff's interest in obtaining relief’ when determining
whether the exercise of jurisdiction is reasonable in any given
case.”
Base Metal Trading, Ltd. v. OJSC Novokuznetsky Aluminum
Factory, 283 F.3d 208, 213-14 (4th Cir. 2002) (quoting Asahi
Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113 (1987)).
In making its determination, the court does not simply
engage in “contact counting”:
13
We should not “merely . . . count the contacts and
quantitatively compare this case to other preceding
cases.” Id. Even a single contact may be sufficient to
create jurisdiction when the cause of action arises
out of that single contact, provided that the
principle of “fair play and substantial justice” is
not thereby offended. Id. (citing Burger King Corp.
v. Rudzewicz, 471 U.S. 462, 477-78, 105 S.Ct. 2174, 85
L.Ed.2d 528 (1985)); see McGee v. Int'l Life Ins. Co.,
355 U.S. 220, 223-24, 78 S.Ct. 199, 2 L.Ed.2d 223
(1957).
Carefirst, 334 F.3d at 397.
At all points, the touchstone of the inquiry remains
the defendant’s contacts with the forum.
See ESAB, 126 F.3d at
626 (stating “[a]lthough the place that the plaintiff feels
[i.e., senses] the alleged injury is plainly relevant to the
[jurisdictional] inquiry, it must ultimately be accompanied by
the defendant's own [sufficient minimum] contacts with the state
if jurisdiction . . . is to be upheld.”) (quoted in New Haven
Advocate, 315 F.3d at 262)).
B.
Progenitor's Motions
George S. Goldberger is Progenitor's Vice President of
Business Development.
He avers that Progenitor is neither
qualified nor registered to do business in West Virginia.
also testifies as follows:
Progenitor, at all times relevant to the Complaint,
did not: (a) have any offices or other places of
14
He
business in West Virginia; (b) maintain any employees
in West Virginia; (c) have an appointed agent for
service of process in West Virginia; (d) own any real
estate property in West Virginia; (e) maintain any
telephone listings or bank accounts in West Virginia;
(f) actively advertise or market its services to West
Virginia citizens within the meaning of applicable
law; and (g) ship the subject blood product from West
Virginia or to West Virginia.
(Aff. of George S. Goldberger ¶ 6).
Mr. Goldberger's affidavit
forms the basis for Progenitor's assertion that it may not
constitutionally be called to court in West Virginia.1
Plaintiffs do not dispute Mr. Goldberger’s sworn allegations.
Plaintiffs respond by alleging that Progenitor is
subject to both general and specific jurisdiction.
Respecting
the exercise of general jurisdiction, plaintiffs seem only to
speculate.
(See Pls.' Resp. at 4 ("The volume of the cord blood
stored by Progenitor and the identities of the owners of that
cord blood is not known at this time" and "[T]he number of West
Virginia residents using Progenitor to store cord blood could
well be substantial." (emphasis added))).
Assuming discovery on those matters would support
plaintiffs’ viewpoint, the contention misses the mark.
1
The
Progenitor also asserts that it engaged in no
jurisdiction-giving act under the West Virginia long-arm
statute. In light of Celotex, the court need not reach the
assertion.
15
question is not how many West Virginians' blood is stored with
Progenitor but, instead, how, if at all, Progenitor
affirmatively expressed "an intention to benefit from and thus
an intention to submit to the laws of" West Virginia.
J. McIntyre, 131 S. Ct. at 2787 (citations omitted).
No such
intention is shown presently nor is the promise of it forecast.
In sum, there are no continuous and systematic contacts by
Progenitor with West Virginia and no proffer that discovery
might generate any.
At bottom, Progenitor makes money from its
contractual relationship with CorCell or Cord Blood and not from
availing itself of the beneftis and protections of doing
business in West Virginia.
Second, plaintiffs assert that Progenitor is subject
to specific jurisdiction inasmuch as it became plaintiffs'
bailee for hire by taking custody of the sample and agreeing to
store it at its New Jersey facility.
In apparent recognition of
the fact that no express contract existed between plaintiffs and
Progenitor, they assert that an implied contract to that effect
arose by implication.
While conceding that the sample was
delivered to the Program at Duke in North Carolina, plaintiffs
asserts that they could have demanded it be delivered to them in
West Virginia.
16
Again, as plaintiffs concede, they had no express
contract with Progenitor.
Their contract was with CorCell.
Any
bailment created under this scenario results in CorCell being
deemed the bailor and Bergen and Progenitor as the bailees.
That unassailable fact aside, there is no basis in law for
exercising personal jurisdiction under the implied bailment
theory suggested by plaintiffs.
That tenuous model, and the
follow-on, comparatively weaker theories relied upon by
plaintiffs, would result in the exercise of personal
jurisdiction under circumstances that plainly do not comport
with traditional notions of fair play and substantial justice
and are otherwise constitutionally unreasonable.
Specific
jurisdiction does not exist.
Plaintiffs also offer no legally worthwhile basis for
inquiring further into the matter through jurisdictional
discovery.
See Carefirst of Maryland, Inc. v. Carefirst
Pregnancy Centers, Inc., 334 F.3d 390, 402 (4th Cir.
2003)(affirming denial of request for jurisdictional discovery
where the movant's specific affidavits were coupled with the
nonmovant's lack of any concrete proffer supporting entitlement
to further inquiry).
The court, accordingly, ORDERS that Progenitor's
motion to dismiss for lack of personal jurisdiction be, and it
17
hereby is, granted.
In light of this ruling, it is further
ORDERED that Progenitor's additional motions to dismiss for
improper venue and to transfer for forum non conveniens be, and
they hereby are, denied without prejudice as moot.
C.
Bergen's Motion
Bergen offers the affidavit of Dennis Todd, its
President and Chief Executive Officer.
Mr. Todd avers that
Bergen has no facilities in West Virginia, does not advertise in
West Virginia, and lacks a telephone listing, business address,
bank account, or any real or personal property in the state at
this or any other time.
Mr. Todd also asserts that Bergen does
not cause any broadcasts of its advertisements into West
Virginia and that its website is purely informational in nature
and not soliciting business.
Plaintiffs do not dispute these
sworn allegations.
Bergen candidly concedes that it shipped some
"platelet packs" into Charleston at the request of a hospital in
November 2011, after this action was instituted.
The sale was
"not as the result of any sales efforts or advertisements
promulgated by Bergen."
(Aff. of Dennis Todd ¶ 7).
Bergen
terms the shipments as "isolated incidents that . . . never
18
occurred prior to or since the given dates. (Id.)
It also notes
the mislabeling of the sample in this case occurred at its
facility in New Jersey.
In response to these uncontested factual averments,
plaintiffs first raise the same bailee-for-hire contention
previously rejected in relation to Progenitor.
That assertion
is not well taken for the reasons earlier expressed.
Plaintiffs
also offer the same jurisdictional discovery request, saying it
would support general jurisdiction over Bergen.
As with the
same entreaty relating to Progenitor, the assertion is
speculative and not forecast to give rise to jurisdictional
fodder.2
2
Respecting both Progenitor and Bergen, a single allegation
in the complaint states as follows:
At all times relevant herein, all of the Defendants .
. . were principals and/or agents of each other and
were regularly conducting business by soliciting and
marketing their blood collecting and storing
activities within Kanawha County and West Virginia and
therefore are subject to personal jurisdiction in West
Virginia.
(Compl. ¶ 6). This unadorned assertion matters little in
the jurisdictional calculus. See Nemet Chevrolet, Ltd. v.
Consumeraffairs.com, Inc., 591 F.3d 250, 253-54 (4th Cir.
2009) (“[W]e need not accept the legal conclusions drawn
from the facts, and we need not accept as true unwarranted
inferences, unreasonable conclusions or arguments.”)
(quoting Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir.
2008)). Additionally, "[i]n the typical case, the contacts
19
The court, accordingly, ORDERS that Bergen's motion to
dismiss for lack of personal jurisdiction be, and it hereby is,
granted.
D.
Cord Blood’s Motion to Dismiss for Lack of Personal
Jurisdiction and Failure to State a Claim
Cord Blood offers the affidavit of Joseph R. Vicente,
its Chief Operating Officer.
Mr. Vicente submits a number of
sworn allegations designed to distance his principal from this
forum.
He notes that Cord Blood has never been licensed or
registered to do business in this state.
He states additionally
that Cord Blood has (1) never offered, advertised, or solicited
its services in West Virginia, (2) has not engaged in a
persistent course of business here, (3) has not derived
substantial revenue for cord blood services rendered here, (4)
has not owned or rented any real or personal property in the
state, (5) has never had an office or any other facilities, nor
any employees or agents, located here, (6) has not, and has
never been required, to pay West Virginia taxes, (7) has never
of a company are not attributed to a corporate agent for
jurisdictional purposes." ePlus Technology, Inc. v. Aboud,
313 F.3d 166, 177 (2002).
20
had a telephone listing or mailing address in the state, and (8)
has made no in-person contact with plaintiffs here.
Unlike the record respecting Progenitor and Bergen,
there are jurisdictional allegations of sorts in plaintiffs'
response brief that favor plaintiffs' position.
First, as
plaintiffs have noted, Cord Blood admits the following contact
with West Virginia:
[Cord Blood] has agreements with certain health care
insurance companies wherein insureds may receive
preferred pricing for cord blood services. Prospective
mothers are provided preferred pricing information
from their health care insurance company regarding the
cord blood services, and if interested, the
prospective mother contacts Cord Blood America, Inc.
to request additional information regarding the cord
blood services.
Cord Blood . . . currently has a preferred pricing
arrangement with Highmark West Virginia, Inc., d/b/a
Mountain State Blue Cross Blue Shield.
(Aff. of Joseph R. Vicente ¶¶ 15-16).
Second, Mr. Vicente notes
the payment arrangement undertaken by Ms. Bays.
She sent annual
remittances not to CorCell but rather to Cord Blood at its
offices outside West Virginia.
Third, while asserting Ms. Bays entered into the
Participation Agreement with CorCell, Mr. Vicente also notes a
relevant transaction between that entity and Cord Blood.
Cord
Blood entered into an Asset Purchase Agreement with CorCell on a
date unstated by Cord Blood.
As a part of the Asset Purchase
21
Agreement, Cord Blood purchased use of the CorCell trade name.
There was also apparently one or more Existing Samples Purchase
Agreements between Cord Blood and CorCell, which likely dealt
with the inventory of samples in CorCell's custody or control at
the time of the execution of those agreements.
Plaintiffs assert in their response memorandum that
their investigation following the institution of this action
reveals that "at the time that . . . [Ms. Bays] was solicited,
Cord Blood . . . was already controlling CorCell['s] . . .
operations and doing business under the general name of
'CorCell' and 'The CorCell Program.'"
(Resp. at 4).
They peg
the date of the Asset Purchase Agreement as October 2006.
The
discussion that follows thereafter in the response memorandum,
which is admittedly unverified and based upon unauthenticated
exhibits, discloses a rather complex timeline surrounding the
CorCell and Cord Blood asset-purchase transaction.
For this and
other reasons, plaintiffs state "justice requires" they be given
an opportunity through discovery to illuminate "the complex
contractual relationships and corporate dealings of these [two]
Defendants . . . ."
(Resp. at 7).
Unlike the circumstances surrounding the Progenitor
and Bergen motions discussed supra, plaintiffs have provided a
sufficient basis to justify a tailored period of jurisdictional
22
discovery to more fully develop the proffer found in their
response memorandum.
The court, accordingly, ORDERS that Cord Blood's
motion to dismiss be, and it hereby is, denied without
prejudice.3
It is further ORDERED as follows:
1. That plaintiffs be, and they hereby are, given leave
until July 16, 2012, to conduct jurisdictional
discovery respecting CorCell and Cord Blood's contacts
with this forum; and
2. That Cord Blood be, and it hereby is, given leave, by
motion, to renew its challenge to personal jurisdiction no later than July 23, 2012.
3
The court notes that Cord Blood also moves to dismiss
pursuant to Rule 12(b)(6) based upon (1) the Informed
Consent and Release putatively absolving CorCell of
liability, (2) the failure to state a claim for intentional
infliction of emotional distress, and (3) the inartful
pleading of plaintiffs' successor liability claim. The
better course from a sequencing standpoint is to hold the
analysis of these contentions in abeyance pending
development and disposition of the personal jurisdiction
challenge, which may obviate the need to address the Rule
12(b)(6) issues.
23
The Clerk is directed to transmit copies of this order
to all counsel of record and any unrepresented parties.
ENTER:
May 8, 2012
John T. Copenhaver, Jr.
United States District Judge
24
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