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Richard Yocum M.D v. Rockwell Medical Technologies

June 27, 2012

RICHARD YOCUM M.D.,
PLAINTIFF,
v.
ROCKWELL MEDICAL TECHNOLOGIES, INC., DEFENDANT.



The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge

ORDER DENYING MOTION TO DISMISS AND FOR TRANSFER OF VENUE [Doc. No. 10]

In this wrongful termination and wage-and-hour action, Defendant Rockwell Medical Technologies, Inc. ("Rockwell"), moves to dismiss for lack of jurisdiction and improper venue. In the alternative, Rockwell seeks transfer of venue to the Eastern District of Michigan. The Court finds the matter suitable for decision on the papers pursuant to Southern District of California Local Civil Rule 7.1 and DENIES Rockwell's motion in its entirety.

I.BACKGROUND

Founded in 1995, Rockwell is a publicly-traded biopharmaceutical company headquartered and incorporated in Michigan. Among other things, the company manufactures, sells, and distributes concentrate solutions and dialysis kits for use on patients with kidney diseases. In 2011, the company had a total revenue of nearly $50 million. Rockwell does not have any offices, and does not conduct business, in California.

Plaintiff is a medical doctor who resides in San Diego County, California. On February 23, 2009, Rockwell hired Plaintiff as its Vice President of Drug Development and Medical affairs.

Plaintiff's duties included leading development and execution of preclinical and clinical strategy, managing all drug development operations, and serving as the clinical lead in Food and Drug Administration meetings. Rockwell allowed Plaintiff to work primarily from San Diego and communicate with Rockwell by telephone or electronic mail.*fn1

Rockwell conducted clinical trials for a certain iron therapy drug throughout Plaintiff's employment. Plaintiff alleges he discovered various problems with the clinical trials and urged Rockwell's CEO, Robert Chioini, to conduct additional studies and publicly disclose the problems. Instead, Plaintiff alleges, Chioini ignored him and issued inaccurate press releases that misrepresented facts about the study and the Food and Drug Administration's concurrence with Rockwell's study procedures. The conflict between Plaintiff and Chioini continued for some time as Plaintiff continuously advised, warned, and challenged Chioini's decisions and actions. Chioini ignored or harshly criticized Plaintiff in response.

On September 17, 2011, Rockwell terminated Plaintiff's employment despite his good performance for the duration of the 2 years and 8 months he worked for the company. Plaintiff believes his termination was the result of his refusal to acquiesce in Chioini's public misrepresentations and the resulting continuous internal conflict with Chioini. Plaintiff claims his termination violated California public policy, and he suffered emotional distress as a result.

On January 20, 2012, Plaintiff filed suit in San Diego County Superior Court, asserting claims for wrongful termination in violation of public policy, three claims for unpaid wages pursuant to California Labor Code section 201, and for intentional infliction of emotional distress. [Doc. No. 1 at 6.]*fn2 He claims Rockwell failed to compensate him for 120 hours of accrued "time off" upon his termination in violation of section 201. His other two section 201 claims allege Rockwell failed to pay him bonuses he earned in 2010 and 2011.

Rockwell answered the complaint on March 6, 2012. [Doc. No. 3.] That same day, Rockwell removed the action to this Court based on diversity of citizenship. [Doc. No. 1.]

On March 15, 2012, Rockwell moved for dismissal under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and under Rule 12(b)(3) for improper venue pursuant to 28 U.S.C. section 1391. [Doc. No. 10.] In the alternative, Rockwell sought transfer of venue to the Eastern District of Michigan pursuant to 28 U.S.C. section 1404.

II.DISCUSSION

Rockwell asserts three central bases for dismissal: (1) there is no basis for the Court to exercise personal jurisdiction over Rockwell, (2) venue in this forum is improper, and (3) litigation in California would result in undue inconvenience and expense for the parties and witnesses in the action and would be counter to the interests of justice. For the following reasons, the Court determines that it has personal jurisdiction over Rockwell, venue is proper in the Southern District of California pursuant to 28 U.S.C. section 1441, and finds no compelling basis to disturb Plaintiff's choice of forum.

A. Timeliness of Rockwell's Motion to Dismiss

As an initial matter, Plaintiff argues that Rockwell's motion to dismiss is untimely because Rockwell filed the motion after it filed an Answer. Without any analysis or authority, Rockwell flatly asserts its motion is timely.

Plaintiff's position initially appears correct, as Rule 12(b) states that a motion to dismiss based on lack of personal jurisdiction and improper venue grounds "must be made before pleading if a responsive pleading is allowed." (emphasis added). Accordingly, it would seem that the Rule's use of mandatory language precludes Rockwell from bringing the instant motion. However, despite this seemingly unambiguous mandatory language, courts are split on allowing post-answer motions to dismiss, and no bright-line rule against allowing such a motion exists in the Ninth Circuit. See generally Moreno-Garcia v. Yakima Police Dep't, 2010 U.S. Dist. LEXIS 114656, *3-*4 (E.D. Wash. Oct. 27, 2010) (citing cases). Moreover, the only Ninth Circuit case that appears to have addressed the issue is not squarely on point because the motion to dismiss in that case was filed before the answer. Aetna Life Ins. Co. v. Alla Med. Servs., Inc., 855 F.2d 1470, 1474 (9th Cir. 1988) ("The 12(b)(6) motion to dismiss was filed . . . before an answer to the complaint was filed. Thus, the Defendants' motion to dismiss preceded the responsive pleading.") Thus, Aetna Life does not stand for the proposition that a defendant cannot file a post-answer motion to dismiss under Rule 12(b)(2) or Rule 12(b)(3). Indeed, district courts in this Circuit have heard post-answer motions to dismiss despite Aetna Life and the mandatory language in Rule 12(b). See, e.g., Vineyard v. Soto, 2011 U.S. Dist. LEXIS 129274, *9-*10 (D. Or. Nov. 7, 2011); Moreno-Garcia, 2010 U.S. Dist. LEXIS 11456 at *4.

Recently, the court in Dell Mktg., L.P. v. InCompass IT, Inc., 771 F. Supp. 2d 648, 650 (W.D. Tex. 2011), issued one of the more reasoned opinions on the matter. The Court finds the well-reasoned analysis in Dell Marketing persuasive, especially since Rockwell did not delay filing its motion. Because Rockwell brought its motion within a month of filing its Answer, accepting the motion comports with the purpose of Rule 12(b). See id. at 654 ("The defenses enumerated in Rule 12(b) are designed to allow a court to dispose of defective cases early, without having to consider the underlying merits; this saves resources for both courts and litigants. The purpose of these defenses would be needlessly defeated if a defendant was not allowed to assert such defenses in a motion simply because the defendant asserted them first in an answer."). The Court will therefore consider Rockwell's motion.

B. The Court Has Personal Jurisdiction Over Rockwell

Rockwell argues that the Court lacks general or specific personal jurisdiction over the company. Plaintiff does not contest the Court's lack of general jurisdiction, but argues specific jurisdiction exists. The Court finds that specific personal jurisdiction over Rockwell both exists and is reasonable.

Where, as here, there is no federal statute governing personal jurisdiction, the law of the state in which the Court sits applies. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). "Because California's long-arm jurisdictional statute is coextensive with federal due process requirements, the jurisdictional analyses under state law and federal due process are the same." Id. at 800-01; see also Yahoo! Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme, 433 F.3d 1199, 1205 (9th Cir. 2006) (en banc). "The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties, or relations." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985). Due process is satisfied if the Court has "either general jurisdiction or specific jurisdiction" over the defendant. Doe v. Am. Nat'l Red Cross, 112 F.3d 1048, 1050 (9th Cir. 1997).

1. Specific Jurisdiction

Specific personal jurisdiction requires that the defendant have "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Wash., 326 U.S. 310, 326 (1945); see also Burger King, 471 U.S. at 475. To determine whether specific jurisdiction exists, the Court employs "a three-part test to evaluate the nature and quality of [the defendant's] contacts" with the forum state. Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). Specific jurisdiction lies where:

(1) The non-resident defendant must purposefully direct [its] activities or consummate some transaction with the forum or resident thereof; or perform some act by which [it] purposefully avails [itself] of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and

(3) the exercise of jurisdiction must comport with fair play and substantial justice, ...


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