JOHN T. COPENHAVER, District Judge.
Pending are defendant Progenitor Cell Therapy, LLC's ("Progenitor"), motions to dismiss for lack of personal jurisdiction, to dismiss for improper venue, and to transfer due to forum non conveniens, filed November 30, 2011, defendant Bergen Community Blood Center's ("Bergen") motion and amended motion to dismiss for lack of personal jurisdiction, filed November 30, 2011, and defendant Cord Blood America Inc.'s ("Cord Blood") motion to dismiss, filed December 5, 2011.
Bergen's amended motion to dismiss is identical to the motion it originally filed seeking that same relief except for the addition of an exhibit inadvertently omitted. It is, accordingly, ORDERED that the initial motion to dismiss be, and it hereby is, denied without prejudice.
Plaintiff Lindsay Bays is a West Virginia resident. She is the guardian, next friend, and mother of Luke Bays. Luke is four-years old. CorCell is a citizen of Pennsylvania and New Jersey. It is a wholly-owned subsidiary of Cord Blood, which is a citizen of Florida and Nevada. Progenitor is a citizen of Delaware and New Jersey. Bergen is a New Jersey citizen.
On February 12, 2007, Ms. Bays and her husband contracted with CorCell under a Participation Agreement to collect and store the blood from her umbilical cord at the time of Luke's birth. CorCell had previously marketed and displayed its services to Ms. Bays as a means for preserving stem cells. Those stem cells are said to allow the rebuilding of an individual's blood system to allow for other types of regenerative therapies. CorCell marketed its services as allowing for the treatment and improvement of life quality for those Bays' family members who might fall prey to a serious illness such as leukemia, anemia, Hodgkins Disease, Alzheimer's disease and cerebral palsy.
At the same time that the Participation Agreement was executed, an Informed Consent and Release accord was signed by Ms. Bays and her husband. It provided materially as follows:
(Inform. Consent and Rel. at 1).
On February 26, 2007, Luke was born at Women and Children's Hospital ("the hospital") in Charleston. Pursuant to the Participation Agreement, the umbilical cord cell blood ("the sample") was collected by the hospital and sent to CorCell's lab. When the sample arrived, CorCell transferred it to a Bergen storage facility pursuant to a contract between those two entities. In October of 2007, however, CorCell ceased using Bergen's storage facility. It contracted instead with Progenitor, which maintained a New Jersey storage facility. Ms. Bays paid monthly storage fees to Cord Blood, not CorCell, to assure the safekeeping of the sample in the event it was needed.
As Luke matured, developmental delays appeared. At two years of age, he was diagnosed with cerebral palsy. In June 2009, Ms. Bays was referred to the Pediatric Blood and Marrow Transplant Program ("Program") at Duke University. The planned course of treatment involved use of the sample as a therapy for Luke's condition. Following preliminary screening, the Program accepted Luke as a candidate for autoreinfusion treatment.
The autoreinfusion therapy was planned for September 22, 2009. During the retrieval and pre-shipping process for the sample, however, CorCell and Progenitor noticed barcode discrepancies. This raised serious questions respecting whether the sample belonged to Ms. Bays.
Laboratory testing of the sample followed, which was designed to confirm that it originated with Ms. Bays. The sample was then shipped to the Program. Upon receipt of the sample, however, the Program noted labeling concerns that revived the earlier uncertainty about the sample's origin. That uncertainty led the Program to conclude that the medical risks of the planned autoreinfusion treatment were too great. On October 2, 2009, Ms. Bays was informed by the Program at Duke that it was rescinding Luke's admission.
As part of its quality control protocol, Cord Blood, not CorCell, conducted an internal investigation into the matter. It concluded that the sample was first mislabeled by Bergen and then shipped to the Program by Progenitor without accompanying documentation confirming its identity.
On September 21, 2011, Ms. Bays instituted this action in the Circuit Court of Kanawha County. She alleges claims for (1) breach of contract by CorCell, along with its alleged "negligent[] hiring and . . . [retention]" of Bergen and Progenitor, (2) breach of contract by Bergen and Progenitor of their written accord with CorCell and Cord Blood, a contract to which Ms. Bays alleges she is a third-party beneficiary, (3) negligence against all defendants, (4) violation by all defendants of the West Virginia Medical Professional Liability Act ("MPLA"), West Virginia Code sections 55-7B-1,
Progenitor moves to dismiss for lack of personal jurisdiction and improper venue or, in the alternative, to transfer due to
Federal Rule of Civil Procedure 8(a)(2) requires that a pleader provide "a short and plain statement of the claim showing . . . entitle[ment] to relief." Fed. R. Civ. P. 8(a)(2);
The required "short and plain statement" must provide "`fair notice of what the . . . claim is and the grounds upon which it rests.'"
Application of the Rule 12(b)(6) standard requires that the court "`accept as true all of the factual allegations contained in the complaint. . . .'"
Personal jurisdiction differs from subject-matter jurisdiction. It is designed to protect an individual liberty interest rather than an institutional interest.
A Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction involves both procedural and substantive components. On the procedural side,
Importantly, "`[a] threshold prima facie finding . . . [of] personal jurisdiction . . . does not finally settle the issue; plaintiff must eventually prove the existence of personal jurisdiction by a preponderance of the evidence, either at trial or at a pretrial evidentiary hearing.'"
Respecting the substantive component, the nonmovant is faced with two hurdles. First, he must identify, and bring the nonresident within, the terms of an applicable state long-arm statute. Second, the nonmovant must show that the exercise of personal jurisdiction would be consistent with the Due Process Clause of the Fourteenth Amendment.
Inasmuch as our court of appeals has held that the West Virginia long-arm statute is coextensive with the proper reach of due process,
The due process requirement is satisfied if the defendant has "minimum contacts" with the forum. These contacts must be of a quality and quantum that requiring the nonresident party to defend its interests within the state would "not offend traditional notions of fair play and substantial justice."
In sum, "[a] defendant should be able to anticipate being sued in a court that can exercise personal jurisdiction over him; thus, to justify an exercise of jurisdiction, a defendant's actions must have been `directed at the forum state in more than a random, fortuitous, or attenuated way.'"
The standard for determining whether a court may exercise personal jurisdiction over a nonresident defendant depends on whether that defendant's contacts with the forum state provide the basis for the suit.
If the specific contacts do not provide the basis for the suit, the
While the standards governing general jurisdiction are essentially confined to the foregoing excerpt, the requirements for specific jurisdiction require coverage in greater depth. In determining whether specific jurisdiction exists, the court considers (1) the extent to which the defendant has purposefully availed himself of the privilege of conducting activities in the state; (2) whether the plaintiff's claims arise out of those activities directed at the state; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable.
The reasonableness inquiry is guided by additional factors, as noted by Judge Wilkinson in reliance upon settled precedent: "Overall, courts `must consider [1] the burden on the defendant, [2] the interests of the forum State, and [3] the plaintiff's interest in obtaining relief' when determining whether the exercise of jurisdiction is reasonable in any given case."
In making its determination, the court does not simply engage in "contact counting":
At all points, the touchstone of the inquiry remains the defendant's contacts with the forum.
George S. Goldberger is Progenitor's Vice President of Business Development. He avers that Progenitor is neither qualified nor registered to do business in West Virginia. He also testifies as follows:
(Aff. of George S. Goldberger ¶ 6). Mr. Goldberger's affidavit forms the basis for Progenitor's assertion that it may not
Plaintiffs respond by alleging that Progenitor is subject to both general and specific jurisdiction. Respecting the exercise of general jurisdiction, plaintiffs seem only to speculate. (
Assuming discovery on those matters would support plaintiffs' viewpoint, the contention misses the mark. The question is not how many West Virginians' blood is stored with Progenitor but, instead, how, if at all, Progenitor affirmatively expressed "an intention to benefit from and thus an intention to submit to the laws of" West Virginia.
Second, plaintiffs assert that Progenitor is subject to specific jurisdiction inasmuch as it became plaintiffs' bailee for hire by taking custody of the sample and agreeing to store it at its New Jersey facility. In apparent recognition of the fact that no express contract existed between plaintiffs and Progenitor, they assert that an implied contract to that effect arose by implication. While conceding that the sample was delivered to the Program at Duke in North Carolina, plaintiffs asserts that they could have demanded it be delivered to them in West Virginia.
Again, as plaintiffs concede, they had no express contract with Progenitor. Their contract was with CorCell. Any bailment created under this scenario results in CorCell being deemed the bailor and Bergen and Progenitor as the bailees. That unassailable fact aside, there is no basis in law for exercising personal jurisdiction under the implied bailment theory suggested by plaintiffs. That tenuous model, and the follow-on, comparatively weaker theories relied upon by plaintiffs, would result in the exercise of personal jurisdiction under circumstances that plainly do not comport with traditional notions of fair play and substantial justice and are otherwise constitutionally unreasonable. Specific jurisdiction does not exist.
Plaintiffs also offer no legally worthwhile basis for inquiring further into the matter through jurisdictional discovery.
The court, accordingly, ORDERS that Progenitor's motion to dismiss for lack of personal jurisdiction be, and it hereby is, granted. In light of this ruling, it is further ORDERED that Progenitor's additional motions to dismiss for improper venue and to transfer for forum
Bergen offers the affidavit of Dennis Todd, its President and Chief Executive Officer. Mr. Todd avers that Bergen has no facilities in West Virginia, does not advertise in West Virginia, and lacks a telephone listing, business address, bank account, or any real or personal property in the state at this or any other time. Mr. Todd also asserts that Bergen does not cause any broadcasts of its advertisements into West Virginia and that its website is purely informational in nature and not soliciting business. Plaintiffs do not dispute these sworn allegations.
Bergen candidly concedes that it shipped some "platelet packs" into Charleston at the request of a hospital in November 2011, after this action was instituted. The sale was "not as the result of any sales efforts or advertisements promulgated by Bergen." (Aff. of Dennis Todd ¶ 7). Bergen terms the shipments as "isolated incidents that . . . never occurred prior to or since the given dates. (
In response to these uncontested factual averments, plaintiffs first raise the same bailee-for-hire contention previously rejected in relation to Progenitor. That assertion is not well taken for the reasons earlier expressed. Plaintiffs also offer the same jurisdictional discovery request, saying it would support general jurisdiction over Bergen. As with the same entreaty relating to Progenitor, the assertion is speculative and not forecast to give rise to jurisdictional fodder.
The court, accordingly, ORDERS that Bergen's motion to dismiss for lack of personal jurisdiction be, and it hereby is, granted.
Cord Blood offers the affidavit of Joseph R. Vicente, its Chief Operating Officer. Mr. Vicente submits a number of sworn allegations designed to distance his principal from this forum. He notes that Cord Blood has never been licensed or registered to do business in this state. He states additionally that Cord Blood has (1) never offered, advertised, or solicited its services in West Virginia, (2) has not engaged in a persistent course of business here, (3) has not derived substantial revenue for cord blood services rendered here, (4) has not owned or rented any real or personal property in the state, (5) has never had an office or any other facilities, nor any employees or agents, located here, (6) has not, and has never been required, to pay West Virginia taxes, (7) has never had a telephone listing or mailing address in the state, and (8) has made no in-person contact with plaintiffs here.
Unlike the record respecting Progenitor and Bergen, there are jurisdictional allegations of sorts in plaintiffs' response brief that favor plaintiffs' position. First, as plaintiffs have noted, Cord Blood admits the following contact with West Virginia:
(Aff. of Joseph R. Vicente ¶¶ 15-16). Second, Mr. Vicente notes the payment arrangement undertaken by Ms. Bays. She sent annual remittances not to CorCell but rather to Cord Blood at its offices outside West Virginia.
Third, while asserting Ms. Bays entered into the Participation Agreement with CorCell, Mr. Vicente also notes a relevant transaction between that entity and Cord Blood. Cord Blood entered into an Asset Purchase Agreement with CorCell on a date unstated by Cord Blood. As a part of the Asset Purchase Agreement, Cord Blood purchased use of the CorCell trade name. There was also apparently one or more Existing Samples Purchase Agreements between Cord Blood and CorCell, which likely dealt with the inventory of samples in CorCell's custody or control at the time of the execution of those agreements.
Plaintiffs assert in their response memorandum that their investigation following the institution of this action reveals that "at the time that . . . [Ms. Bays] was solicited, Cord Blood . . . was already controlling CorCell['s] . . . operations and doing business under the general name of `CorCell' and `The CorCell Program.'" (Resp. at 4). They peg the date of the Asset Purchase Agreement as October 2006. The discussion that follows thereafter in the response memorandum, which is admittedly unverified and based upon unauthenticated exhibits, discloses a rather complex timeline surrounding the CorCell and Cord Blood asset-purchase transaction. For this and other reasons, plaintiffs state "justice requires" they be given an opportunity through discovery to illuminate "the complex contractual relationships and corporate dealings of these [two] Defendants. . . ." (Resp. at 7).
Unlike the circumstances surrounding the Progenitor and Bergen motions discussed
The court, accordingly, ORDERS that Cord Blood's motion to dismiss be, and it hereby is, denied without prejudice.
The Clerk is directed to transmit copies of this order to all counsel of record and any unrepresented parties.
(Compl. ¶ 6). This unadorned assertion matters little in the jurisdictional calculus.