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Rx Trials LLC v. Coastal Biomedical Research Inc.

United States District Court, D. Maryland

August 26, 2019

RX TRIALS, LLC, Successor-In-Interest to Rx TRIALS, INC., Plaintiff,
v.
COASTAL BIOMEDICAL RESEARCH, INC., ET AL. Defendants.

          MEMORANDUM OPINION

          J. Mark Coulson United States Magistrate Judge

         The case is before me for all proceedings by the consent of the parties pursuant to 28 U.S.C. § 636(c). (ECF Nos. 15 & 16). Now pending is Plaintiff's (“Rx Trials'”) Motion for Summary Judgment on all counts, against Coastal Biomedical Research, Inc. (“Coastal”) and Linda A. Glaser, M.D., (collectively, the “Defendants”). (ECF No. 27). No. response in opposition was filed and no hearing is needed. See Loc. R. 105.6 (D. Md. 2018). For the reasons stated below, the unopposed motion is DENIED.

         I. BACKGROUND

         Rx Trials is a limited liability company, organized under Maryland law, that specializes in clinical research trial efficiency and consulting. (ECF No. 3 at ¶ 2). Coastal is a corporation, organized under California law, that conducts clinical research trials and is owned and operated by Dr. Glaser. (Id. at ¶¶ 3, 66-68). On June 15, 2013, Rx Trials and Coastal entered into a Partner Site Agreement for consulting services and site management research. (ECF No. 27-1). Per the agreement, Coastal would utilize Rx Trial's clinical trial management software (the “Software”). (Id. at 20). Not only would the Software help with site management, but it would permit Rx Trials to keep track of the trials for billing purposes. In exchange for Rx Trial's services and Software, Coastal agreed to compensate Rx Trials by payment of a percentage of each month's revenue based on a tiered payment schedule outlined within the Agreement. (Id. at 22). The parties agreed that all clinical trials would utilize Rx Trial's services and software, and thus all trials were subject to the pricing schedule. (Id.). Furthermore, Coastal was to send Rx Trials all payments made to Coastal by trial sponsors and supply records of payment each month. (Id.). Once all the information on revenue was gathered, Rx Trials would issue an invoice to Coastal which would be due within thirty (30) days of receipt. (Id.).

         It is undisputed that Coastal ignored these obligations and breached the Agreement. Dr. Steven Geller, the managing member of Rx Trials, provides an affidavit in which he affirms that Coastal and Dr. Glaser stopped utilizing the Software, ceased updating Rx Trials as to what clinical trials Coastal was performing, and instructed trial sponsors to compensate Coastal in a manner that Rx Trials could not monitor. (Id. at 29). During this time Coastal conducted clinical trials that generated over $1.1 million in revenue. (Id.). The majority of this revenue, however, was never reported to Rx Trials as required by the Agreement.

         Once Rx Trials discovered Coastal's conduct it served a formal notice of default. Coastal never responded. Accordingly, Rx Trials filed this suit on July 26, 2018 alleging four counts: Count 1 - Breach of Contract against Coastal; Count II - Intentional Concealment against Dr. Glaser; Count III - Negligence against Coastal; and Count VI - Violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”). (ECF No. 3). Plaintiff seeks actual damages under the Agreement of $209, 060.30; treble damages under RICO of $627, 180.90; and attorneys' fees and costs. Despite this Court having already entered default judgment of all counts against Coastal (Counts I and III), Plaintiff now asks that this Court enter summary judgement on all counts against both Defendants on the merits. (ECF No. 27-1).

         II. STANDARD OF REVIEW

         Federal Rule of Civil Procedure 56(a) requires the Court to “grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The moving party can do so by demonstrating the absence of any genuine dispute of material fact or by showing an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). A dispute as to a material fact “is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” J.E. Dunn Const. Co. v. S.R.P. Dev. Ltd. P'ship, 115 F.Supp.3d 593, 600 (D. Md. 2015) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

         If a motion for summary judgment goes unopposed, the Court must still view the facts and draw reasonable inferences in the light most favorable to the nonmoving party.; Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008); Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 416 (4th Cir. 1993). Moreover, the movant still must show that the uncontroverted facts entitle the party to judgment as a matter of law. Custer, 12 F.3d at 416.

         III. DISCUSSION

         As an initial matter, the Court will decline Plaintiff's invitation to rule on Counts I and III again. Although the Fourth Circuit has a “strong policy that cases be decided on their merits, ” it is not absolute. United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir.1993). This Court's June 10, 2019 Order entered default judgment in favor of Plaintiff on all counts against Coastal. (ECF No. 24). Besides a vague desire that the counts be decided “on the merits[, ]” Plaintiff offers no reason for why the already issued default judgment is insufficient. Not only had the adversarial process been halted by Coastal's unresponsiveness, but Coastal failed to appoint Counsel after notice and in violation of the Local Rules. (ECF No. 23). These grounds for default remain unchallenged and unchanged. Absent a motion to set aside the judgement, there is no need to revisit what has already been done. Accordingly, Plaintiff's Motion for Summary Judgment on Counts I and III against Coastal, (ECF No. 27), is DENIED as moot.

         This leaves Plaintiff's counts against Dr. Glaser for intentional concealment and civil RICO violations.

         A. Intentional Concealment

         Plaintiff argues that Dr. Glaser's conduct amounts to intentional concealment because she, as an agent of Coastal, did not make the disclosures as required by the Agreement, did so to purposefully defraud, and ...


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