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Azco Biotech Inc. v. Qiagen, N.V.

United States District Court, Ninth Circuit

June 26, 2013

AZCO BIOTECH INC., a Nevada Corporation; and J. ADAMS, an individual, Plaintiffs,
v.
QIAGEN, N. V. a Netherlands holding company; STEVEN GORDON, an individual; JINGYUE JIU, an individual; JERZY OLEJNIK, an individual; INTELLIGENT BIO-SYSTEMS, INC., a Delaware Corporation; and DOES 1-50, inclusive, Defendants.

ORDER DENYING PLAINTIFFS' APPLICATION TO SET RULE 26(f) DISCOVERY CONFERENCE, PERMIT INITIATION OF DISCOVERY AND SET EARLY NEUTRAL EVALUATION CONFERENCE [ECF No. 23]

DAVID H. BARTICK, Magistrate Judge.

On June 13, 2013, the parties jointly filed a document entitled "Joint Submission Regarding Plaintiffs' Application to Set Rule 26(f) Discovery Conference, Permit Initiation of Discovery and Set Early Neutral Evaluation Conference." (ECF No. 23.) Plaintiffs Azco Biotech Inc. ("Azco") and J. Adams ("Adams") request that the Court compel the parties to conduct a Rule 26(f)[1] conference within fifteen days and that the parties exchange initial disclosures fifteen days thereafter. ( Id. at 5:11-13.) Plaintiffs alternatively request leave to commence discovery on those issues that are not the subject of Defendants' pending motion to dismiss. ( Id. at 5:13-14.) Finally, Plaintiffs request that an Early Neutral Evaluation Conference be scheduled within forty-five days. ( Id. at 5:15-16.) Defendants oppose Plaintiffs' requests and contend that the Rule 26(f) conference, opening of discovery and scheduling of an Early Neutral Evaluation Conference should not occur until after District Judge Roger T. Benitez rules on the pending motion to dismiss. ( Id. at 6:17-20.)

After careful consideration of the parties' arguments, the status of this action and the applicable law, the Court DENIES Plaintiffs' requests.

I. BACKGROUND

On October 24, 2012, Plaintiffs filed this action against Defendants Qiagen, N.V. ("Qiagen"), Steven Gordon ("Gordon"), Jingyue Jiu ("Jiu"), Jerry Olejnik ("Olejnik") and Intelligent Bio-Systems, Inc. ("IBS"). (ECF No. 1.) Plaintiffs' Complaint is premised on the allegation that Gordon (the largest shareholder of IBS) sold out his friend and partner, Adams (the CEO and sole shareholder of Azco) by selling to Qiagen "what Azco and IBS had partnered to develop, promote, sell and service for the burgeoning DNA sequencing market." ( Id. at 2:13-17.) Plaintiffs also allege that Qiagen paid Gordon $138 million to abandon Adams "in return for the technologies, processes, customer lists, marketing, customer relations and other work product" that Azco and IBS had generated over the course of fifteen months of cooperative efforts. ( Id. at 2:17-20.)

Plaintiffs' Complaint asserts eighteen separate causes of action: (1) breach of written contract; (2) breach of oral contract; (3) breach of the implied covenant of good faith and fair dealing; (4) inducing breach of contract; (5) promissory estoppel; (6) promissory fraud (promise with no intent to perform); (7) fraud (deceit/intentional misrepresentation); (8) negligent misrepresentation; (9) breach of fiduciary duty; (10) aiding and abetting the breach of fiduciary duty; (11) intentional interference with prospective economic advantage; (12) negligent interference with prospective economic advantage; (13) unjust enrichment; (14) trade libel and defamation; (15) common count for goods and services rendered; (16) unfair business practices in violation of California Business and Professions Code ยง 17200, et seq.; (17) declaratory relief; and (18) injunctive relief.

On December 13, 2012, Defendants filed a Rule 12 motion to dismiss. (ECF No. 10.) Specifically, Qiagen moves under Rule 12(b)(2) for dismissal of all claims asserted against it on the basis that this Court lacks personal jurisdiction. ( Id. at 2:8-9.) Gordon, Jiu and Olejnik move under Rule 12(b)(6) for dismissal of all claims asserted against them on the basis that Plaintiff's Complaint fails to state a claim against them upon which relief can be granted. ( Id. at 2:10-12.) Finally, IBS moves under Rule 12(b)(6) for dismissal of claims 6-8, 13-16 and 18 on the basis that Plaintiff's Complaint fails to state a claim against IBS upon which relief can be granted. ( Id. at 2:13-14.)[2] Defendants' motion to dismiss is currently pending.

II. ANALYSIS

1. Rule 26(f) Conference and Scheduling Order

Plaintiffs initially request that the Court compel the parties to conduct a Rule 26(f) conference and to exchange initial disclosures so that discovery can commence. Plaintiffs argue that pursuant to Rule 16(b), a scheduling order must be issued now that all defendants have appeared. Rule 16 provides:

(1) Scheduling Order. Except in categories of actions exempted by local rule, the district judge-or a magistrate judge when authorized by local rule-must issue a scheduling order:
(A) after receiving the parties' report under Rule 26(f); or
(B) after consulting with the parties' attorneys and any unrepresented parties at a scheduling conference or by telephone, mail, or other means.
(2) Time to Issue. The judge must issue the scheduling order as soon as practicable, but in any event within the earlier of 120 days after any defendant has been served with the ...

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