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Maiden Biosciences, Inc. v. MPM Medical, Inc.

United States District Court, D. Maryland

May 29, 2018

MAIDEN BIOSCIENCES, INC., Plaintiff,
v.
MPM MEDICAL, INC., et al., Defendants.

          MEMORANDUM OPINION

          RICHARD D. BENNETT, UNITED STATES DISTRICT JUDGE

         Plaintiff Maiden Biosciences, Inc. (“Plaintiff” or “Maiden”) brings this action against MPM Medical, Inc. (“MPM”) and RBC Lifesciences, Inc. (“RBC”) (collectively, “Defendants”), alleging that Defendants breached a supply agreement for the purchase of custom-made wound dressings. (Am. Compl., ECF No. 13.) Presently before this Court is Defendants' Motion to Dismiss the Amended Complaint or, in the alternative, Transfer this case to the United States District Court for the Northern District of Texas.[1] (ECF No. 14.) The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2016). For the reasons stated below, Defendants' Motion to Transfer (ECF No. 14) is GRANTED.[2] All pending arguments, including Defendant RBC's argument that it is an improper Defendant, will remain pending for disposition in the transferee court.

         BACKGROUND

         When reviewing a motion to dismiss, this Court accepts as true the facts alleged in the plaintiff's complaint. See Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011). Defendant MPM Medical, Inc. (“MPM”), a Texas corporation, is a pharmaceutical supply company that sells products through medical, surgical, and pharmaceutical distributors. (ECF No. 14-3 at ¶ 9.) MPM's Vice President and General Manager, Gerald Pyle, testified that MPM has sixteen direct employees nationwide and does not actively engage in business in Maryland. (Id. at ¶ 10, 17.) He testified that, for instance, MPM does not directly advertise or target Maryland for its customers, and none of MPM's six nation-wide sales representatives are assigned to Maryland or live closer than Detroit, Michigan or Chicago, Illinois. (Id. at ¶ 18.) Defendant RBC Lifesciences, Inc. (“RBC”), a Nevada corporation, is the parent holding company of MPM. (Brown Aff., ECF No. 14-2 at ¶ 4; Pyle Aff., ECF No. 14-3 at ¶ 7.) RBC's Chief Executive Officer and President, Steven Brown, testified that RBC does not sell any products, own any real or personal property, or advertise in Maryland. (ECF No. 14-2 at ¶ 7.)

         Plaintiff Maiden Biosciences, Inc. (“Maiden”), a Maryland corporation, is a small biotech company that manufactures wound dressing. (Am. Compl., ECF No. 13 at ¶ 14.) Maiden was established in 2016 at the John Hopkin's University Montgomery County Campus in Montgomery County, Maryland. (Id.) Maiden only has two employees who are also the company's two owners. (Gorman Aff., ECF No. 17-2 at ¶ 15). One of the owners is Mark Gorman, [3] who is also the Chief Executive Officer and Director of Business and Development. (Id. at ¶ 4.) Prior to working for Maiden, from 2011 to 2016, Gorman worked for another wound care product manufacturer, Human Biosciences, Inc. (“HBS”). (Id. at ¶ 17.) During Gorman's employment with HBS, Defendant MPM purchased wound care products from HBS. (Id. at ¶ 18.) Specifically, the Amended Complaint alleges that Gorman received orders from Gerald Pyle for products including Triple Helix Collagen Powder and Triple Helix Sheets. (ECF No. 13 at ¶¶ 17, 19.)

         In April of 2016 at a Symposium on Advanced Wound Care, the Amended Complaint alleges that Pyle expressed to Gorman his disappointment with HBS and his concerns regarding the company's ability to continue to supply products to MPM. (Id. at ¶¶ 22-24; Gorman Aff., ECF No. 17-2 at ¶ 19.) Gorman testified that “as a result” of hearing Pyle's concerns, “[he] referred [Pyle] to Maiden.” (ECF No. 17-2 at ¶ 19.) Subsequently, Pyle contacted Maiden and expressed MPM's interest in purchasing products from Maiden. (Id. at ¶ 20.) On or around September 2, 2016, MPM and Maiden entered into a Supply Agreement (the “Agreement”). (ECF No. 13 at ¶ 24; ECF No. 1-2.) Pyle signed the Agreement electronically in Texas while Daniel Zang signed it electronically on behalf of Maiden in Maryland. (ECF No. 13 at ¶ 29.)

         The Agreement was between Maiden and its contract manufacturer Anteco Pharma, a Wisconsin corporation, and MPM. (ECF No. 1-2.) The Amended Complaint asserts that Anteco was “included solely for its role as the operator of the manufacturing facility used by Maiden.” (ECF No. 13 at ¶ 25 n. 4.) The Agreement also provides that its terms are governed by Texas state law. (ECF No. 1-2. at ¶ 12.5.) Under the Agreement, MPM was to purchase a minimum of 600, 000 units of Triple Helix Collagen from Maiden each calendar year with a prorated amount for 2016. (Id. at ¶ 2.11). Further, the Agreement prohibited MPM from contracting with any other manufacturer for the relevant products so long as Maiden and Anteco were not in default under the Agreement. (Id. at ¶ 2.1.C.)

         While MPM did place one order for 100, 000 Triple Helix Collagen units in February of 2017, Plaintiff alleges that MPM breached the Agreement by not ordering the prorated amount for 2016 or the total 600, 000 units in 2017. (ECF No. 13 at ¶¶ 46-47.) The Amended Complaint alleges that MPM's failure to abide by the Agreement is in part because MPM continued to purchase products from HBS, also violating the Agreement's exclusivity clause. (Id. at ¶ 36.) Further, Maiden alleges that MPM never paid for an order of Triple Helix Sheets. (Id. at ¶¶ 49-52.) On October 16, 2017, Plaintiff filed a Complaint in this Court, alleging two counts of breach of contract and unjust enrichment. (Compl., ECF No. 1; Am. Compl., ECF No. 13.) Defendants move to dismiss the Complaint, arguing that (1) RBC is not a proper Defendant, (2) this Court does not have personal jurisdiction over RBC or MPM, and (3) venue is improper under the doctrine of forum non conveniens. Alternatively, Defendants request that this Court transfer this action to the United States District Court for the Northern District of Texas under 28 U.S.C. § 1404.

         STANDARD OF REVIEW

         28 U.S.C. § 1404(a) provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). Notably, § 1404(a) “reflects an increased desire to have federal civil suits tried in the federal system at the place called for in the particular case by considerations of convenience and justice.” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). The movant bears the burden of showing that transfer to another venue is proper. See Stratagene v. Parsons Behle & Latimer, 315 F.Supp.2d 765, 771 (D. Md. 2004). A district court has great discretion in determining whether to transfer a case under § 1404(a), and the decision is made according to an “individualized, case-by-case consideration of convenience and fairness.” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988); Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 34 (1998); Capitol Payment Systems, Inc. v. Di Donato, No. ELH-16-882, 2017 WL 2242678, at *8 (D. Md. May 23, 2017).

         ANALYSIS

         In support of their motion to dismiss, Defendants MPM Medical, Inc. and RBC Lifesciences, Inc. contend that (1) RBC is not a proper Defendant, (2) this Court does not have personal jurisdiction over RBC or MPM, and (3) venue is improper under the doctrine of forum non conveniens. Alternatively, Defendants request that this Court transfer this action to the United States District Court for the Northern District of Texas under 28 U.S.C. § 1404. For the reasons that follow, this case will be transferred to the United States District Court for the Northern District of Texas.

         Venue is proper in diversity cases in the “judicial district in which a substantial part of the events or omissions giving rise to the claim occurred.” 28 U.S.C. § 1391(b)(2). Under 28 U.S.C. § 1406(a), “[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” In determining whether venue is proper for a breach of contract claim, “‘courts consider a number of factors, including where the contract was negotiated or executed, where it was to be performed, and where the alleged breach occurred.'” Structural Group, LLC v. Fyfe Co., LLC, No. CCB-14-78, 2014 WL 3955439, at *3 (D. Md. Aug. 11, 2014) (quoting Largotta v. Banner Promotions, Inc., 356 F.Supp.2d 388, 390 (S.D.N.Y. 2005)). On the other hand, a court may still transfer a case even if venue is proper if a defendant shows “by a preponderance of the evidence that the proposed transfer will better and more conveniently serve the interests of the parties and witnesses and better promote the interests of justice.” Strategene v. Parsons Behle & Latimer, 315 F.Supp.2d 765, 771 (D. Md. 2014). When ruling on a motion to transfer, a court must first determine whether the action could have been brought in the transferee district. Trs. of the Plumbers and Pipefitters Nat. Pension Fund v. Plumbing Serv.'s, Inc., 791 F.3d 436, 444 (4th Cir. 2015). If the action could have been brought in the transferee district, a court then must consider several factors, including “(1) the weight accorded to plaintiff's choice of venue; (2) witness convenience and access; (3) convenience of the parties; and (4) the interests of justice.” Id. (citations omitted). Without deciding whether this Court is in fact a proper venue for Plaintiff's claims, this Court finds that transfer is warranted under 28 U.S.C. § 1404.[4]

         I. This Case Could Have Been Brought in the United States District Court ...


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