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Nuvasive, Inc v. North

July 22, 2011

NUVASIVE, INC.,
PLAINTIFF,
v.
NORTH, L.P. AND K&S CONSULTING DEFENDANT.



The opinion of the court was delivered by: Hon. Roger T. Benitez United States District Judge

ORDER: (1) GRANTING DEFENDANTS' MOTION TO DISMISS FOR LACK (2) DEFENDANTS' MOTION TO DISMISS FOR IMPROPER VENUE IS MOOT; AND RENAISSANCE SURGICAL CENTER OF PERSONAL JURISDICTION; (3) DEFENDANTS' MOTION TO ASC, L.P., TRANSFER VENUE IS MOOT [Docket Nos. 15, 17.]

NuVasive, Inc. ("Plaintiff") filed a Complaint alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and goods sold and delivered at agreed price. Renaissance Surgical Center North, L.P. ("Renaissance") and K&S Consulting ASC, L.P. ("K&S"), (collectively, "Defendants"), move to dismiss the Complaint for lack of personal jurisdiction and improper venue pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) or, in the alternative, to transfer the case to the Southern District of Texas pursuant to 28 U.S.C. § 1406(a). For the reasons set forth below, the Court GRANTS Defendants' Motion to Dismiss for lack of personal jurisdiction. Defendants' Motion to Dismiss for improper venue or alternatively to transfer venue is therefore deemed MOOT.

FACTUAL BACKGROUND

This action arises from Renaissance's alleged failure to pay for Plaintiff's products resulting in an outstanding balance of more than $420,000. Plaintiff is a Delaware corporation with its principal place of business in San Diego, California (Compl. ¶ 10), within the jurisdiction of the Southern District of California. Renaissance is a Texas limited partnership with its principal place of business in Humble, Texas (Id. ¶ 11), within the jurisdiction of the Southern District of Texas. K&S is a Texas limited partnership with its principal place of business in Houston, Texas (Id. ¶ 12), within the Southern District of Texas.

Plaintiff is a medical device company that sells products for the surgical treatment of spine disorders. (Id. ¶ 1.) It employs sales representatives that initiate contact with spinal surgeons who have a need for its products. (Id. ¶ 13.) If a surgeon wants to utilize Plaintiff's products, the sales representatives arrange with the surgeons and hospitals to ensure the surgeons have the products they need. (Id.) The hospitals are the actual purchasers of the products and are only charged for the instruments, equipment, and implants used during the surgeries. (Id. ¶¶ 14, 15.)

Renaissance is an ambulatory surgical center where doctors perform spinal surgeries. (Id.¶ 2.) In 2008, Plaintiff's Texas-based sales representative established a business relationship with several Renaissance neurosurgeons. (Id. ¶ 16.) The sales representative then dealt directly with Renaissance's material manager to order the Plaintiff's products that Renaissance's neurosurgeons desired. (See id. ¶ 17; Crimm Decl. ¶¶ 2, 3.)

Between 2008 and May 2009, Renaissance ordered Plaintiff's medical and surgical products and paid more than $925,000 to Plaintiff. (Compl. ¶ 19.) From May 2009 through April 2010, Renassiance continued to order, and Plaintiff delivered, various medical and surgical products. (Id. ¶ 20.) Renaissance failed to make payments for those products resulting in an outstanding balance of more than $420,000 due to Plaintiff. (Id. ¶ 20.)

K&S is a general partner of Renaissance. (Id. ¶ 12.) Plaintiff contends K&S is liable jointly and severally for Renaissance's alleged outstanding balance because the acts herein were done in "the ordinary course of the partnership business."*fn1 (Id. ¶ 27.)

On April 13, 2011, Plaintiff initiated this action to recover the outstanding balance due as a result of Renaissance's alleged failure to pay for ordered and used products. Specifically, Plaintiff claims Renaissance, and K&S as Renaissance's general partner, owe $421,682.24 plus related interest, finance charges, and attorneys fees. (Id. ¶¶ 3,5.)

DISCUSSION

A. PERSONAL JURISDICTION

Defendants move to dismiss the Complaint for lack of personal jurisdiction. Therefore, the burden falls upon the Plaintiff to demonstrate that the court may properly exercise personal jurisdiction over the Defendants. See Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006); Ziegler v. Indian River Cnty., 64 F.3d 470, 473 (9th Cir. 1995). Absent formal discovery or an evidentiary hearing, as here, a plaintiff need only make a prima facie showing that jurisdiction exists to survive a 12(b)(2) motion to dismiss. Pebble Beach, 453 F.3d at 1154; Ziegler, 64 F.3d at 473.

Plaintiff proffers two bases for personal jurisdiction over Defendants. First, Plaintiff argues the Court can exercise personal jurisdiction over Defendants because of a forum selection clause in the sales agreements. (Compl. ΒΆ 9; Opp., p. 2.) Second, Plaintiff argues Defendants have sufficient "minimum contacts" with California to ...


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