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Cytokinetics, Inc. v. Pharm-Olam International, Ltd.

United States District Court, N.D. California

March 10, 2015



JEFFREY S. WHITE, District Judge.

Now before the Court is a motion to dismiss, or in the alternative, transfer the case, filed by Defendant Pharm-Olam International, Ltd. ("Defendant"). The Court has considered the parties' papers, relevant legal authority, and the record in this case, and it finds the motion suitable for disposition without oral argument, and therefore VACATES the hearing scheduled for March 20, 2015. See Civil L.R. 7-1(b). For the reasons that follow, the Court hereby DENIES the motion to transfer, and GRANTS IN PART AND DENIES IN PART the motion to dismiss.


The following facts are drawn from the complaint. Plaintiff Cytokinetics ("Plaintiff"), a clinical-stage biopharmaceutical company, is a Delaware corporation with its principal place of business in South San Francisco, California. (Compl. ¶¶ 1, 7.) Defendant, a provider of outsourced development services, is a limited partnership with global headquarters in Houston, Texas. ( Id. ¶¶ 2, 26.) Plaintiff hired Defendant to provide a variety of services, including building and maintaining a database for one of Plaintiff's clinical studies. ( Id. ¶ 47.)

On October 27, 2011, the parties entered into a Master Clinical Services Agreement ("the Agreement"). The Agreement was intended to permit the parties to contract for multiple projects through the creation of work orders. (Wolff Decl. Ex. D ¶ 2.) To the extent that any work order conflicted with the Agreement, the Agreement was to govern. ( Id. ¶ 3.2.) No work order was to have the power to amend the Agreement. ( Id. ) The parties further agreed that "[t]his Agreement will be governed and construed in accordance with the laws of the State of Delaware, USA." ( Id. ¶ 14.7(a).)

On July 16, 2012, the parties entered into a work order relating to Plaintiff's clinical study. (Compl. ¶ 46-47.) Pursuant to the work order, Defendant was to develop, validate, and maintain a database for Plaintiff. ( Id. ¶ 48.) To do so, Defendant subcontracted with non-party Datatrack International, an Ohio corporation that maintains an office in North Carolina. The database failed, resulting in 58 patients receiving the wrong treatment. ( Id. ¶¶ 95-98.)

On December 1, 2014, Plaintiff filed a complaint alleging three causes of action: (1) fraudulent inducement; (2) breach of contract; and (3) negligence. Defendant now moves the Court to dismiss the complaint, or in the alternative, to transfer the matter to the Middle District of North Carolina.

The Court shall address additional facts as necessary in the remainder of this Order.


A. Legal Standard Applicable to Motion to Transfer.

Pursuant to 28 U.S.C. § 1404(a), a district court may transfer a civil action to any district where the case could have been filed originally, for the convenience of the parties and witnesses, and in the interest of justice. The burden is on the moving party to demonstrate that the action should be transferred. Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979).

District courts use a two-step analysis to determine whether transfer is proper. Step one considers the threshold question of whether the action might have been brought in the district to which transfer is sought. Id. If venue is proper in the transferee district, the district court has discretion "to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness." Steward Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). The court considers relevant factors, such as the plaintiff's choice of forum, the local interest in the issue, the relative ease of access to evidence, the availability of compulsory process for unwilling witnesses and the cost involved in securing willing witnesses, the familiarity of each forum with applicable law, and the relative court congestion in each forum. Decker Coal. Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09 (1947)).

B. Legal Standard Applicable to Motion to Dismiss.

A motion to dismiss is proper under Federal Rule of Civil Procedure 12(b)(6) where the complaint fails to state a claim upon which relief can be granted. The Court's "inquiry is limited to the allegations in the complaint, which are accepted as true and construed in the light most favorable to the plaintiff." Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). Even under the liberal pleadings standard of Federal Rule of Civil Procedure 8(a)(2), "a plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of ...

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