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Barnett v. Surefire Medical, Inc.

United States District Court, D. Maryland

September 25, 2017



          J. Frederick Motz, United States District Judge

         Plaintiff, Dr. Bradley Barnett, has sued Defendants Surefire Medical, Inc. ("Surefire") and Dr. Aravind Arepally (collectively, "Defendants") for damages arising out of the design of an anti-reflux catheter. Plaintiff has asserted claims for "correction of inventorship" on six different patents, along with one claim of unjust enrichment against Dr. Arepally. Defendants have filed a motion to dismiss the Complaint or, in the alternative, for transfer, citing a lack of personal jurisdiction in Maryland. [ECF No. 11], The issues have been fully briefed, [ECF Nos. 14, 15], and no hearing is necessary. See Local Rule 105.6 (D. Md. 2016). For the reasons stated below, Defendants' motion to dismiss will be granted, and the case will be dismissed without prejudice.


         The following facts are derived from the substantive declarations Defendants submitted in opposition to this motion. Surefire, a company that develops and sells cancer treatment systems, was incorporated in Delaware and maintains its principal place of business in Westminster, Colorado. Chomas Aug. 3, 2017 Decl., [ECF No. 11-3 at ¶¶ 2, 3]. Surefire sells its products throughout the United States, including Maryland, and also sells its products internationally to customers in thirteen different countries. Id. ¶ 4. Surefire does not have an office in Maryland, does not own or rent property in Maryland, and does not maintain a bank account in Maryland. Id. ¶ 7. Surefire has never done business, in Maryland or elsewhere, with Plaintiff. Id. ¶ 10. Surefire conducted the research supporting its technology at its place of business in Colorado, and is not conducting clinical trials in Maryland for technology development. Chomas Aug. 30, 2017 Decl., [ECF No. 15-2 at ¶¶ 2, 3, 4]. In the past five years, Maryland has accounted for between 2% to 4% of Surefire's total sales. Chomas Aug. 3, 2017 Decl., [ECF No. 11-3 at ¶ 5]. One of Surefire's 43 employees lives in Maryland and is responsible for sales in the Mid-Atlantic region. Id. ¶ 6.

         The other defendant, Dr. Arepally, is a resident of Georgia, and works at Piedmont Hospital in Atlanta. Arepally Aug. 4, 2017 Decl, [ECF No. 11-2 at ¶¶ 2, 3]. Dr. Arepally last resided in Maryland in 2008, before he co-founded Surefire in 2009. Id. ¶ 2, 5. The earliest patent application at issue in this case was filed on December 2, 2009. Id. ¶ 6. Dr. Arepally did not perform work in Maryland on the patented technology referred to in the Complaint. Id. ¶ 7. The technology at issue was conceived and reduced to practice after Dr. Arepally left Maryland. Arepally Aug. 31, 2017 Deck, [ECF No. 15-1 at ¶ 4]. Dr. Arepally owns a vacation home in Maryland, which he visits occasionally, but he has no other property or bank accounts in Maryland. Arepally Aug. 4, 2017 Deck, [ECF No. 11-2 at ¶ 10]. He does not transact business in Maryland, although he serves as an unpaid investigator in a multi-center trial being performed, in part, at the Johns Hopkins Medical Institute ("JHMI") in Maryland. Id. ¶ 9. That trial is unrelated to the technology mentioned in the Complaint. Id; Arepally Aug. 31, 2017 Deck, [ECF No. 15-1 at ¶ 5]. Dr, Arepally also serves as an unpaid consultant to another trial being conducted at JHMI for a medical treatment incorporating the Surefire Medical Infusion System, which uses the disputed technology. Id. ¶ 6.


         Defendants' motion to dismiss under Fed.R.Civ.P. 12(b)(2) challenges this Court's personal jurisdiction over them. The parties agree that, because this is a patent-related case, jurisdiction is governed by Federal Circuit law. See Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343, 1348 (Fed. Cir. 2002). "[W]hen, as here, the court addresses the question [of personal jurisdiction] 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 Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 (4th Cir. 2005) (quoting Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)); see also Electronics For Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003). "In the procedural posture of a motion to dismiss, a district court must accept the uncontroverted allegations in the plaintiffs complaint as true and resolve any factual conflicts in the affidavits in the plaintiffs favor." Electronics for Imaging, Inc., 340 F.3d at 1349 (citing Deprenyl, 297 F.3d at 1347; Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1087 (9th Cir. 2000)).


         Personal jurisdiction exists where either general jurisdiction or specific jurisdiction is established. See LSI Indus. Inc. v. Hubbell Lighting Inc., 232 F.3d 1369, 1375 (Fed. Cir. 2000).


         General jurisdiction is a fairly limited concept, since it only arises where "the continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against [defendant] on causes of action arising from dealings entirely distinct from those activities." International Shoe Co. v. Washington, 326 U.S. 310, 318 (1945). "For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.'' Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011). In the context of a corporation, the paradigm bases for general jurisdiction are "the place of incorporation and principal place of business." Daimler AG v. Bauman, __ U.S. __, 134 S.Ct. 746, 759 (2014). The Daimler court clarified that while those paradigms are not necessarily the only bases for general jurisdiction, it would be "unacceptably grasping" to approve the exercise of general jurisdiction wherever a corporation, "engages in a substantial, continuous, and systemic course of business." Id. at 761 (declining to find general jurisdiction lies in every state in which a corporate defendant has "sizeable" sales).

         In this case, Dr. Arepally, the individual defendant, is not domiciled in Maryland. Surefire is not incorporated and does not have its principal place of business in Maryland. Even taken in the light most favorable to Plaintiff, his allegation that "upon information and belief, each Defendant regularly solicits and conducts business in Maryland" is not sufficient to justify general jurisdiction. As an individual, Dr. Arepally would not be subject to general jurisdiction in Maryland by virtue of his business ties. As to Surefire, under the Daimler and Goodyear cases, Surefire's nationwide sales, of which Maryland contributes between 2% to 4%, would be insufficient to render Maryland akin to a "home state" for general jurisdiction purposes. See Daimler, 134 S.C. at 761, 762 (noting that allowing general jurisdiction in every state with sizeable sales would be an "exorbitant exercise[] of all-purpose jurisdiction"); Goodyear, 564 U.S. at 929 (rejecting notion that "any substantial manufacturer or seller of goods would be amenable to suit, on any claim for relief, wherever its products are distributed.").


         Turning to specific jurisdiction, the Federal Circuit has determined that an assertion of specific jurisdiction over an out-of-state defendant requires an assessment of whether the "forum state's long-arm statute permits service of process and whether [the] assertion of personal jurisdiction violates due process." Genetic Implant Sys., Inc. v. Core-Vent Corp.,123 F.3d 1455, 1458 (Fed. Cir. 1997) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-76 (1985)). Under Maryland's long-arm statute, Plaintiffs lynchpin of specific jurisdiction is that his claims arise out of acts performed in Maryland. Here, Plaintiff has not presented a prima facie case that Defendants' actions in Maryland gave rise to his cause of action. Plaintiff cites the sections of the Maryland long-arm statute which provide for personal jurisdiction where a defendant "[transacts any business or performs any character of work or service in the State" or "[h]as an interest in, uses, or possesses real property in the State." Pl. Opp. at 7 (citing Md. Code Ann., Cts. & Jud. Proc. ยงยง 6-103(b)(1) and (b)(5)) (West 2017). However, the preliminary provision of the long-arm statute states that "[i]f jurisdiction over a person is based solely upon this section, he may be sued only on a cause of action arising from any act enumerated ...

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