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Kurin, Inc. v. Magnolia Medical Technologies, Inc.

United States District Court, S.D. California

October 23, 2019

KURIN, INC., Plaintiff,
v.
MAGNOLIA MEDICAL TECHNOLOGIES, INC., Defendant.

          ORDER: (1) SUSTAINING PLAINTIFF'S OBJECTION TO ORDER DENYING PLAINTIFF'S MOTION TO COMPEL [ECF NO. 38]; AND (2) GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS [ECF NO. 28]

          HON. M. JAMES LORENZ UNITED STATES DISTRICT JUDGE

         Pending before the Court is Defendant Magnolia Medical Technologies, Inc.'s (“Magnolia”) motion for partial judgment on the pleadings [ ECF No. 28] and Plaintiff Kurin Inc.'s (“Kurin”) objection to an order denying Kurin's motion to compel responses to Kurin's first set of requests for production of documents (“RFP”) [ECF No. 38]. The Court shall determine these motions upon the moving papers without oral argument pursuant to Civil Local Rule 7.1.d.1. For the following reasons, Kurin's objection is SUSTAINED and Magnolia's motion is GRANTED IN PART and DENIED IN PART.

         I. Background

         Kurin is a medical device engineering company and developed the Kurin Lock™ -a specimen diversion device that reduces the risk of blood culture contamination and associated false positive blood culture results. Magnolia also is a medical device company that developed, manufactures, and markets another blood collection device, the Steripath.

         Magnolia began distributing the Steripath device in June 2014 and started selling it commercially about a year later. Kurin received its FDA 501(k) clearance to market the Kurin Lock™ on December 23, 2016 and launched its product around January 2017.

         Kurin and Magnolia are competitors as they both market their devices to healthcare providers seeking to reduce the number of false-positive blood cultures. On May 29, 2018, Kurin filed a Complaint claiming Magnolia made false and misleading representations to consumers in its marketing of Steripath. Particularly, Kurin alleges that Magnolia's representations, that Steripath is registered and listed as a Class I device and Steripath's “Rx Only” packaging, falsely imply that Steripath has been FDA reviewed and approved. Magnolia subsequently filed a motion for partial judgment on the pleadings as to Plaintiff's Lanham Act, 15 U.S.C. § 1125(a), claims and state law claims. After its motion to compel responses to Kurin's first set of RFPs was denied by the magistrate judge (the “April 11 order”), Kurin filed an objection to the order. Specifically, Kurin contends the April 11, 2019 order was contrary to law by relying on a relevance objection that Magnolia did not explicitly raise. Kurin also contends that the magistrate judge clearly erred even assuming the relevance objection was raised. Both the motion and the objection have been fully briefed by both parties.

         II. Legal Standard

         The Ninth Circuit reminds us that “Rule 12(c) is ‘functionally identical' to Rule 12(b)(6) and that ‘the same standard of review' applies to motions brought under either rule.” Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011) (citation omitted). A Rule 12(c) motion must demonstrate that the complaint lacks a cognizable legal theory or fails to allege facts sufficient to support such a theory. See Balisteri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). A complaint that sets forth a cognizable legal theory will defeat a motion for judgment on the pleadings where it contains “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the plaintiff pleads sufficient facts from which the court can reasonably infer that the defendant is liable for the misconduct alleged. Id. (citing Twombly, 550 U.S. at 556).

         A party may object to a federal magistrate judge's non-dispositive discovery order within fourteen days of the order's service. See Fed. R. Civ. P. 72(a). The district will uphold the magistrate judge's order unless it is “clearly erroneous or contrary to law.” Id.; 28 U.S.C. § 636(b)(1)(A). The “clearly erroneous” standard applies to the magistrate judge's factual determinations and discretionary decisions. Grimes v. City and Cty. of San Francisco, 951 F.2d 236, 240 (9th Cir. 1991). The clearly erroneous standard is “significantly deferential, requiring a definite and firm conviction that a mistake has been committed.” Concrete Pipe & Prods. v. Constr. Laborers Pension Trust, 508 U.S. 602, 623 (1993); Security Farms v. Int'l Brotherhood of Teamsters, 124 F.3d 999, 1014 (9th Cir. 1997). However, district courts apply the “contrary to law” standard after independently reviewing a magistrate judge's legal conclusions. Medical Imaging Centers of America, Inc. v. Lichtenstein, 917 F.Supp. 717, 719 (S.D. Cal. 1996) (“Section 636(b)(1) . . . has been interpreted to provide for de novo review by the district court on issues of law.”)

         III. Discussion

         Magnolia contends that Kurin's Lanham Act and state law claims should be dismissed to the extent the claims are based on the Steripath device's Class I designation and “Rx only” label because the U.S. Food and Drug Administration (“FDA”) has primary jurisdiction over those issues under the Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C.A. § 301 et seq.; 21 C.F.R. § 700.3. Accordingly, Magnolia request that Kurin's allegations and claims be narrowed to exclude these issues.

         In applying the doctrine of primary jurisdiction, courts “traditionally look for four factors identified in General Dynamics. Under this test, the doctrine applies where there is ‘(1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory scheme that (4) requires expertise or uniformity in administration.'”Davel Commc'ns Inc. v. Qwest Corp., 460 F.3d 1075, 10867-87 (9th Cir. 2006) (quoting United States v. Gen Dynamics Corp., 828 F.2d 1356, 1362 (9th Cir. 1987)).

         a. Lanham Act

         A Lanham Act cause of action grounded in false advertising requires a plaintiff to plead “an injury to a commercial interest in sales or business reputation proximately caused by the defendant's misrepresentations.” Lexmark Intern., Inc. v. Static ControlComponents, Inc., 572 U.S. 118, 140 (2014). Both parties agree that POM Wonderful LLCv. Coca-Cola Co., 573 U.S. 102 (2014) is the leading case on FDCA preclusion. See Docs. 28-1, 29. POM Wonderful instructs that the FDCA and the Lanham Act “complement each other in major respects, for each has its own scope and purpose. Although both statutes touch on [medical device] labeling, the Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety.” POM Wonderful, 573 U.S. at 115 (comparing Lexmark Intern., Inc. v. Static Control Components, Inc., 572 U.S. 118, 130 ...


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