Glycobiosciences, Inc. v. Innocutis Holdings, LLC , 189 F. Supp. 3d 61 ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
GLYCOBIOSCIENCES, INC.,
Plaintiff,
v. Civil Action No. 12-1901 (RDM)
INNOCUTIS HOLDINGS, LLC, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
Presently before the Court is the motion of Defendant Fidia Farmaceutici S.P.A. (“Fidia”)
to dismiss portions of Plaintiff Glycobiosciences’s (“Glyco”) amended complaint. See Dkt. 85.
Fidia moves to dismiss Glyco’s claims for misappropriation of trade secrets in violation of D.C.
Code § 36-401 et seq. (Count IV); unlawful trade practices in violation of the District of
Columbia Consumer Protection Procedures Act, D.C. Code § 28-3901 et seq. (Count V);
common law unfair competition (Count VI); and unjust enrichment (Count VII). According to
Fidia, each of these counts must be dismissed in light of forum-selection clauses contained in
two agreements between the parties. In the alternative, Fidia argues that Count V should be
dismissed under Rule 12(b)(6) because Glyco is not in a consumer-merchant relationship with
Fidia.
As explained below, the Court GRANTS in part and DENIES in part Fidia’s motion. It
concludes that Counts IV and VII, as well as a portion of Count VI, are covered by mandatory
forum-selection clauses, and, accordingly, it dismisses those counts (or portions thereof) on the
ground of forum non conveniens. In addition, although the Court concludes that the forum-
selection clauses do not cover Count V, it dismisses that count for failure to state a claim under
the D.C. Consumer Protection Procedures Act.
I. BACKGROUND
The Court has previously discussed other aspects of the background of this litigation in
its opinions regarding claim construction and Defendants’ motion for judgment on the
pleadings. 1 The Court does not repeat that history here, but rather focuses on those facts relevant
to Fidia’s pending motion to dismiss. For purposes of that motion, the following allegations are
taken as true and are construed in the light most favorable to the non-moving party. See, e.g.,
Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).
Fidia, an Italian company with a principal place of business in Abano Terme, Italy,
manufactures a product called Bionect Gel, purportedly under U.S. Patent No. 5,925,626 (‘626
patent). Dkt. 77 ¶¶ 11, 21. Glyco, a Canadian company with a principal place of business in
Georgetown, Canada, is the owner of U.S. Patent No. 6,387,407 (‘407 patent), which claims an
“Ionic Polymer Matrix (‘IPM’)” delivery system. Id. ¶¶ 1–3. Glyco’s IPM Wound Gel product
allegedly uses this “proprietary and patented [IPM] delivery system.” Id. ¶¶ 2–3.
In June 2003, Fidia sent Glyco’s predecessor, L.A.M. Pharmaceutical, a letter asserting
that IPM Wound Gel was covered by Fidia’s ‘626 patent, which L.A.M. disputed. Dkt. 77-3
(Am. Compl. Ex. C); Dkt. 77 ¶ 34. Fidia’s ‘626 patent expired in December 2003. Dkt. 77 ¶ 35.
Fidia then challenged a European patent that corresponded to L.A.M.’s ‘407 patent, but did not
succeed at the trial-court level. Id. ¶ 36. Fidia threatened to appeal that adverse decision and
simultaneously sought to purchase L.A.M.’s “‘407 patent, the European patent EP 0859597, all
1 See Glycobiosciences, Inc. v. Innocutis Holdings, LLC, No. 12-1901, 2015 WL 7574749
(D.D.C. Nov. 25, 2015); Glycobiosciences, Inc. v. Innocutis Holdings, LLC, No. 12-1901, 2015
WL 3609343 (D.D.C. June 10, 2015).
2
of the rights under L.A.M.’s FDA 510(k) No. K020325 relating to IPM Wound Gel, and all
technical information relating to the IPM Wound Gel.” Id. ¶ 37.
In order to facilitate negotiations over these assets, Fidia and L.A.M. entered into an
information-sharing agreement in May 2006, under which Fidia agreed not to disclose or to use
otherwise secret information about IPM Wound Gel that it obtained solely for the purpose of
evaluating the proposed transaction. Dkt. 84-1 at 3. The 2006 Agreement included a clause
stating that “[t]his Agreement shall be governed in all respects by the laws of Italy and in case of
dispute the competent forum shall be that of Padua, Italy.” Id. at 4. Fidia subsequently decided
not to purchase L.A.M.’s assets. Dkt. 77 ¶ 50. Glyco alleges that notwithstanding the 2006
Agreement, Fidia used the information about IPM Wound Gel that it had obtained to improve
Bionect. Id. ¶ 47. Glyco also alleges on information and belief that Fidia, in fact, never intended
to purchase L.A.M.’s assets when it entered the 2006 Agreement. Id. ¶ 51.
In late 2009 or early 2010, Fidia and Glyco again entered into negotiations, this time
regarding the possibility of Fidia manufacturing IPM Wound Gel for Glyco. Id. ¶ 52. The
parties entered into a new information-sharing agreement in February 2010, under which Fidia
again agreed not to disclose or to use otherwise secret information about IPM Wound Gel except
to evaluate the proposed business relationship. 2 Dkt. 84-2 at 2. The 2010 Agreement included a
clause stating that “[t]his Agreement shall be construed under and governed by the laws of U.K.
In case of disputes the competent court shall be that of London, U.K.” Id. at 3. Fidia ultimately
decided not to manufacture IPM Wound Gel. Dkt. 77 ¶ 56. According to Glyco, “on
2 Although the Agreement’s first paragraph states that it “is entered into this 24th day of
February, 2010,” Dkt. 84-2 at 2, the date printed below Fidia’s CEO’s signature is “24 February
2009,” id. at 4. At this stage of the proceeding, the Court accepts as true Glyco’s allegation that
the agreement was entered in 2010. Dkt. 77 ¶ 53. The discrepancy is, in any event, irrelevant to
the Court’s analysis.
3
information and belief, [Fidia] did not enter into the . . . 2010 [A]greement in good faith but
rather to surreptitiously and deceitfully obtain updated technical information” about IPM Wound
Gel. Id. ¶¶ 54, 57.
On September 2, 2015, Glyco filed an amended complaint against Fidia (and others),
alleging two counts of indirect infringement of the ‘407 patent (Counts I and II), false patent
marking with respect to Bionect and the ‘626 patent (Count III), misappropriation of trade
secrets (Count IV), unlawful trade practices (Count V), common law unfair competition (Count
VI), and unjust enrichment (Count VII). Dkt. 23. Presently before the Court is Fidia’s motion to
dismiss Counts IV–VII of the amended complaint, arguing that Counts IV–VII should be
dismissed pursuant to Federal Rule of Civil Procedure 12(b)(3) and, alternatively, that Count V
should be dismissed under Rule 12(b)(6). 3 Dkts. 85, 86. The Court heard oral argument on the
motion on May 2, 2016, see Dkt. 130, and the following day, it invited Glyco to file a surreply
brief to address an issue raised for the first time in Fidia’s reply brief, see May 3, 2016 Minute
Order. Glyco filed that surreply on May 16, 2016. Dkt. 136. Fidia’s motion, accordingly, is
now ripe for decision.
II. ANALYSIS
A. Forum-selection Clauses
Fidia contends that under the forum-selection clauses contained in the 2006 and 2010
Agreements, Counts IV–VII must be dismissed. Fidia initially denominated its motion as a Rule
12(b)(3) motion to dismiss for improper venue. See Dkt. 86 at 5–8. As it subsequently realized,
3 The false patent marking claim is the subject of a partial motion for summary judgment by
Fidia, which has not yet been fully briefed. See Dkt. 96. The indirect infringement claims are
stayed pending reexamination of ‘407 patent by the U.S. Patent and Trademark Office. See Dkt.
131.
4
however, in Atlantic Marine Construction Co. v. United States District Court for the Western
District of Texas, the Supreme Court held that “the appropriate way to enforce a forum-selection
clause pointing to a . . . foreign forum is through the doctrine of forum non conveniens,” and not
a Rule 12(b)(3) motion to dismiss. 134 S. Ct. 568, 580 (2013). Fidia thus asks that the Court
treat its motion as a forum non conveniens motion. The Court agrees that it is appropriate to do
so.
As an initial matter, the Court concludes that Glyco will not be prejudiced by treating
Fidia’s motion in this manner. Although Fidia did not invoke the doctrine of forum non
conveniens until it filed its reply brief, the substance of Fidia’s defense did not change in
material respects, and Glyco did not object at the subsequent oral argument. Moreover, to avoid
any possible prejudice, the Court sua sponte granted Glyco leave to file a surreply addressing the
forum non conveniens issue. See May 3, 2016 Minute Order. In response, Glyco did not dispute
the inapplicability of Rule 12(b)(3), but, instead, argued that 28 U.S.C. § 1404(a) governs Fidia’s
motion; that under that statute, a case may be transferred, but not dismissed; and that because
Fidia seeks dismissal and not transfer, its motion must be denied. Dkt. 136 at 6–7. That
argument, however, is without merit. As the Supreme Court explained in Atlantic Marine, “[f]or
. . . cases calling for a nonfederal forum, § 1404(a) has no application, but the residual doctrine
of forum non conveniens ‘has continuing application in federal courts.’” 134 S. Ct. at 580.
Because there is no basis to believe that Glyco has been prejudiced by Fidia’s late-invocation of
the forum non conveniens doctrine, and because the Supreme Court has clearly opined that
5
neither Rule 12(b)(3) nor § 1404(a) applies in the present circumstances, the Court will treat
Fidia’s motion to dismiss as a forum non conveniens motion. 4 Dkt. 93 at 4.
“In the typical case not involving a forum-selection clause, a district court considering a
. . . forum non conveniens motion . . . [would] evaluate both the convenience of the parties and
various public-interest considerations.” Atlantic Marine, 134 S. Ct. at 581. “The calculus
changes, however, when the parties’ contract contains a valid forum-selection clause.” Id. If it
does, the parties’ bargain—that is, their agreement regarding the proper forum for resolving
disputes—should be “given controlling weight in all but the most exceptional cases.” Id.
(quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33 (1988) (Kennedy, J., concurring)).
Thus, where the parties have entered into a valid forum selection clause, “the plaintiff’s choice of
forum merits no weight,” and “a court evaluating a defendant’s [forum non conveniens motion]
based on a forum-selection clause should not consider arguments about the parties’ private
interests.” Id. at 581–82 (emphasis added). The court “may consider arguments about” the
public interest, but that “factor will rarely defeat [the] motion.” Id. at 582. As a consequence,
contractually valid “forum-selection clauses should control except in unusual circumstances.”
Id.
4 Prior to Fidia’s request that the Court construe its motion as asserting forum non conveniens,
Glyco argued that Fidia waived the defense of improper venue under Rule 12(b)(3) by failing to
include it in its answer. Dkt. 90 at 5. The waiver provisions of Rule 12(h), do not, however,
apply to a forum non conveniens motion. 14D Charles Alan Wright & Arthur R. Miller, Federal
Practice & Procedure § 3829 (4th ed.) (“Although the authority is not extensive,” “[u]nlike a
motion to dismiss for improper venue under Rule 12(b)(3),” a motion to dismiss for forum non
conveniens “is not a ‘defense’ that must be raised by pre-answer motion or responsive
pleading.”). In any event, even if the Rule 12(h) waiver rules applied, Fidia complied with Rule
12(h)(1)(B)(ii) by filing an amended answer that asserted improper venue as a defense to Counts
IV, V, VI, and counsel for Glyco conceded as much at oral argument. See Dkt. 87 ¶ 213.
6
Here, Glyco does not attempt to meet the heavy burden of “showing that public-interest
factors overwhelmingly disfavor” dismissal, trumping the parties’ agreed-upon forum. Id. at
583. Nor “does [it] point to factors typically relied on by litigants seeking to avoid enforcement
of forum-selection clauses—for instance, that the clause is the product of fraud or that its
enforcement would contravene a strong public policy of the forum in which suit is brought . . . .”
Marra v. Papandreou, 216 F.3d 1119, 1124 (D.C. Cir. 2000). Instead, it raises two arguments
that relate to the text of the 2006 and 2010 Agreements: First, it contends that the forum-
selection clauses in the Agreements do not apply to the dispute at hand. Second, it argues that, in
any event, the clauses do not designate an exclusive forum, but merely a “competent” one. See
Dkt. 90 at 5–10 (emphasis added); see also Atlantic Marine, 134 S. Ct. at 581 n.5 (explaining
that the Court’s forum non conveniens interest-balancing “analysis presupposes a contractually
valid forum-selection clause”); 14D Charles Alan Wright et al., Federal Practice & Procedure
§ 3803.1 (4th ed.) (“The existence of a forum selection clause raises a series of potentially
litigable questions[.]”). 5 The Court addresses each argument in turn. Because neither party
distinguishes between the clauses in the 2006 and 2010 Agreements, and because it is unclear on
the present record which is applicable to Glyco’s claims, the Court treats the two together.
1. Applicability of forum-selection clauses
Glyco first contends that the forum-selection clauses apply “only if the cause of action
arises under a breach of contract” and that it does not assert such a claim here. Dkt. 90 at 6. The
scope of a forum-selection clause is a matter of contract interpretation. “[I]n determining
5 Glyco’s only assertion that the public interest requires denial of Fidia’s motion is a conclusory
statement that “for the same reasons”—that is, that Fidia’s interpretation of the clauses as
covering any and all possible litigation between the parties is too broad and would unduly burden
Glyco—the “public interest works in favor of Plaintif[f].” Dkt. 136 at 5–6.
7
whether a claim [is covered by a forum-selection clause], one must ‘examine the substance of
[the] claims shorn of their labels,’ and ‘focus on factual allegations rather than on the causes of
action asserted.’ . . . Hence, the mere fact that a plaintiff has pled his claim as a tort . . . does not
determine whether the claim” is covered. Cheney v. IPD Analytics, LLC, 583 F. Supp. 2d 108,
122 (D.D.C. 2008) (citations omitted). To the contrary, forum-selection clauses are often found
applicable to non-contract claims. See, e.g., Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585,
588, 597 (enforcing forum-selection clause with respect to negligence claim); M/S Bremen v.
Zapata Off-Shore Co., 407 U.S. 1, 4, 20 (1972) (same); Marra, 216 F.3d at 1124 n.4 (enforcing
forum-selection clause with respect to expropriation claim); see also Wright et al., supra, § 3803.1
(collecting cases).
“The starting point, of course, is the language of the clause itself.” Wright et al., supra,
§ 3803.1. The forum-selection clauses at issue here state, respectively, that “[t]his agreement
shall be governed in all respects by the laws of Italy and in case of dispute the competent forum
shall be that of Padua, Italy” and that “[t]his agreement shall be construed under and governed by
the laws of the U.K.[] In case of disputes the competent court shall be that of London, U.K.”
Dkt. 84-1 at 4 (2006 Agreement); Dkt. 84-2 at 3 (2010 Agreement). Although these clauses do
not use precisely the same “any dispute arising from the agreement” or “originating from the
agreement” language that courts have frequently construed in similar circumstances, see, e.g.,
Cheney, 583 F. Supp. 2d at 122, their import is the same. Indeed, that is precisely how Glyco
characterizes them, see Dkt. 90 at 7 (“[B]oth clauses refer specifically to any disputes arising
from the two Agreements.”), and the Court accepts this characterization for purposes of
resolving Fidia’s motion. The Court, accordingly, looks to “three guiding principles . . . [that]
are instructive in determining whether claims ‘arise’ from a contract”:
8
A claim may “arise under” a contract (1) where the claim “‘ultimately depend[s] on
the existence of a contractual relationship between the parties’”; (2) “‘resolution of
the claims relates to interpretation of the contract’”; or (3) “‘contract-related tort
claims involv[e] the same operative facts as a parallel claim for breach of
contract.’” This is consistent with the Second Circuit’s observation . . . that
whether one or another claim “arises out of” or “originates” from a contract
depends on whether there is a “causal connection” between the claim and the
contract based on rights, duties, or injury flowing from the contract.
Cheney, 583 F. Supp. 2d at 122 (citations omitted) (synthesizing cases from First, Second, Third,
Eighth, and Ninth Circuits); see also Marra, 216 F.3d at 1124 n.4 (interpreting forum-selection
clause applicable to “[a]ny dispute or disagreement . . . arising from” a license as covering an
“expropriation claim [that] is wholly derivative of the . . . alleged breach of the . . . license”).
Applying this test to Glyco’s amended complaint, Count IV, which alleges
misappropriation of trade secrets in violation of the D.C. Uniform Trade Secrets Act (“UTSA”),
D.C. Code §§ 36-401 et seq., arises from the 2006 and/or 2010 Agreements. As relevant here, a
claim of misappropriation under the UTSA requires a showing that a trade secret was acquired
through “improper means” or was disclosed or used “without express or implied consent by a
person who” acquired the information by “improper means” or who knew that the information
was “[a]cquired under circumstances giving rise to a duty to maintain its secrecy or limit its
use.” 6 Glyco alleges that it provided Fidia with access to its trade secrets only after Fidia
6 D.C. Code § 36-401(2) provides that “[m]isappropriation” means:
(A) Acquisition of a trade secret of another by a person who knows or has
reason to know that the trade secret was acquired by improper means;
or
(B) Disclosure or use of a trade secret of another without express or
implied consent by a person who:
(i) Used improper means to acquire knowledge of the trade
secret; or
9
executed the Agreements, committing not to disclose or to use those trade secrets except as
agreed. Dkt. 77 ¶¶ 145–72. In particular, it alleges that Fidia and L.A.M. entered into the first
non-disclosure agreement in May 2006, id. ¶ 155, and that L.A.M. disclosed “technical data to
Fidia related to [its] IPM Wound Gel product” as a result of that agreement, id. ¶ 156. Likewise,
Glyco alleges that, after it acquired L.A.M., it disclosed “updated technical data to Fidia” only
after—and “[b]y virtue of” the fact that—the parties entered the second non-disclosure
agreement. Id. ¶¶ 158, 160. And, although Glyco contends that Fidia used threats of litigation,
pretext and misrepresentations to convince it (and L.A.M.) to share these trade secrets, id.
¶¶ 164–66, neither the complaint nor Glyco’s opposition brief offers any basis to disentangle
those allegations from its allegations that it (and L.A.M.) provided Fidia with the secrets because
Fidia promised to use the information solely for the business purposes outlined in the non-
disclosure agreements, see Dkts. 90, 84-1, 84-2.
Resolution of Glyco’s misappropriation claim is thus both intertwined with and premised
on the same operative facts that would underlie a claim for breach of the Agreements. The
misappropriation claim relies on the negotiations leading up to entry of the Agreements, Fidia’s
(ii) At the time of disclosure or use, knew or had reason to know
that the trade secret was:
(I) Derived from or through a person who had utilized
improper means to acquire it;
(II) Acquired under circumstances giving rise to a duty to
maintain its secrecy or limit its use;
(III) Derived from or through a person who owed a duty to
the person seeking relief to maintain its secrecy or limit its
use; or
(iii) Before a material change in his or her position, knew or had
reason to know that the information was a trade secret and
knowledge of the trade secret had been acquired by accident
or mistake.
10
asserted lack of good faith in those negotiations, and the representations and obligations included
in the Agreements. Glyco cannot escape its promise to litigate in the agreed-upon fora by merely
reformulating or adding to what is, at base, a claim that Fidia failed to abide by its contractual
obligation to use Glyco’s trade secrets only for purposes of the business dealings between the
parties. The claim is, accordingly, covered by the forum-selection clauses.
Count VII, which alleges unjust enrichment, arises from the Agreements for the same
reasons. That count simply adds that “Fidia has been unjustly enriched by the manner and use of
Glyco’s technical data in connection with Bionect Gel.” Dkt. 77 ¶ 194. As explained above,
whether that “manner and use” was permissible turns at least in substantial part on Fidia’s
obligations under the Agreements. Count VI, which alleges common law unfair competition,
similarly originates in the Agreements to the extent that Glyco alleges that the 2006 and 2010
Agreements were not entered in good faith, but, rather, were a pretext to obtain confidential
information for improper purposes. See id. ¶ 185 (alleging that Fidia “misrepresent[ed] its
intentions to Glyco in its business dealings and contractual negotiations”). And, although Glyco
contends that Fidia’s misconduct preceded the Agreements “by at least three years, beginning
with the improper threats of litigation from counsel in 2003,” Dkt. 136 at 3, the mere fact that
certain relevant conduct occurred before the entry of the Agreements does not make Glyco’s
claim that Fidia improperly obtained and used its trade secrets any less dependent on the
operative confidential disclosure Agreements.
The Court concludes, however, that Count V and the remainder of the allegations in
Count VI are outside the scope of the forum-selection clauses. In Count V, an unlawful trade
practices claim, Glyco alleges that “Fidia misrepresented [to consumers and prospective
licensees] that Bionect Gel products are patent protected, are registered with the FDA, and that
11
Fidia’s Bionect Gel has characteristics [or formulas] that it does not have,” and that Fidia
“disparaged the goods and services and business of Glyco.” Dkt. 77 ¶¶ 175–79. Those
allegations are distinct from Glyco’s contentions that Fidia neither entered the Agreements in
good faith nor abided by the limits the Agreements imposed on its use of Glyco’s trade secrets.
Count VI similarly includes allegations that Fidia made misrepresentations to consumers and
prospective licensees. Id. ¶¶ 185, 187. These claims of misrepresentations and disparaging
statements made to third parties are independent of the 2006 and 2010 Agreements and Fidia’s
obligations to Glyco thereunder and therefore are not covered by the forum-selection clauses.
2. Whether the clauses are mandatory
Next, Glyco argues that “neither clause is written as exclusive[;] the clauses simply
designate a particular forum as ‘competent’ and do not exclude other for[a] as equally
competent.” Dkt. 90 at 7. The Court, accordingly, must “determine whether [the clauses are]
mandatory” or “permissive.” Wright et al., supra, § 3803.1. “Mandatory forum selection clauses
contain clear language that litigation will proceed exclusively in the designated forum” and must
be enforced. Id. In contrast, “[p]ermissive forum selection clauses, often described as ‘consent
to jurisdiction’ clauses, authorize jurisdiction and venue in a designated forum, but do not
prohibit litigation elsewhere.” Id.
The Court concludes that the forum-selection clauses at issue here are mandatory. They
provide that “in case of dispute the competent forum shall be that of Padua,” Dkt. 84-1 at 4
(2006 Agreement) (emphases added), and that “in case of disputes the competent court shall be
that of London,” Dkt. 84-2 at 3 (2010 Agreement) (emphases added). Glyco is correct that use
12
of the term “shall” is not always dispositive of whether a forum-selection clause is mandatory. 7
But the clauses here include other language evincing the parties’ intent to preselect an exclusive
forum. Most significantly, the clauses do not merely designate “a competent” or “one
competent” forum; they designate “the competent” forum. The use of the definite article “the”
connotes specificity—that the parties intended to select those particular fora and not others. This
conclusion, moreover, is reinforced by the (admittedly less conclusive) fact that the Agreements
also specify, respectively, that they would be “governed in all respects by,” Dkt. 84-1 at 4 (2006
Agreement), or “construed under and governed by,” Dkt. 84-2 at 3 (2010 Agreement), foreign
law—at least suggesting a nexus to those foreign jurisdictions and an intent to litigate disputes
arising from the Agreements outside the United States. Cf. Atl. Tele-Network, Inc., 251 F. Supp.
2d at 136.
Glyco’s contention that to be mandatory, a forum-selection clause “should” contain
magic works like “‘exclusively’ or ‘solely’ or ‘only,’” Dkt. 90 at 8, is belied by the Supreme
Court’s conclusion that a forum-selection clause stating that “[a]ny dispute arising must be
treated before the London Court of Justice” was “clearly mandatory,” M/S Bremen v. Zapata Off-
Shore Co., 407 U.S. at 2, 20, as well as by the D.C. Circuit’s holding that a clause stating that
“[a]ny dispute . . . shall be settled by the Greek courts” “clear[ly] . . . requires [plaintiff] to file
her suit in Greece.” Marra, 216 F.3d at 1120–21, 1124; see also Wall St. Aubrey Golf, LLC v.
Aubrey, 189 F. App’x 82, 85–86 (3d Cir. 2006) (“Despite the provision’s failure to use words
like ‘exclusive’ or ‘sole’ with respect to venue, it would require an interpretive sleight of hand to
7 Compare Carmen Group. Inc. v. Xavier Univ. of La., 41 F. Supp. 3d 8, 12 (D.D.C. 2014), and
Atl. Tele-Network, Inc. v. Inter-Am. Dev., 251 F. Supp. 2d 126, 135–36 (D.D.C. 2003); with
Cynergy Sys., Inc. v. Bright Sch., Inc., 656 F. Supp. 2d 150, 152 (D.D.C. 2009), and Byrd v.
Admiral Moving & Storage, Inc., 355 F. Supp. 2d 234, 238–39 (D.D.C. 2005).
13
produce the conclusion that the provision is ambiguous.”). And, even if the Court were to
conclude that the language at issue in M/S Bremen and Marra was more emphatic than that at
issue here, there is little doubt that the clauses in the 2006 and 2010 Agreements are more akin to
the clauses in those and other mandatory cases, than to the permissive, “jurisdiction conferring”
clauses cited by Glyco. Cf., e.g., IntraComm, Inc. v. Bajaj, 492 F.3d 285, 290 (4th Cir. 2007)
(“[E]ither party shall be free to pursue its rights at law or equity in a court of competent
jurisdiction in Fairfax County.” (second emphasis added)); Phillips v. Audio Active Ltd., 494
F.3d 378, 386 (2d Cir. 2007) (distinguishing mandatory clause stating that “any legal
proceedings that may arise out of [the agreement] are to be brought in England” from permissive
clause stating that “[a]ny dispute arising between the parties hereunder shall come within the
jurisdiction of the competent Greek Courts”).
For the foregoing reasons, the Court GRANTS Fidia’s forum non conveniens motion as
to Counts IV and VII, as well as a portion of Count VI, and DENIES that motion in all other
respects.
B. Rule 12(b)(6)
Having rejected Fidia’s argument that Count V must be dismissed under the doctrine of
forum non conveniens, the Court must consider Fidia’s argument for dismissal of that count
under Rule 12(b)(6). Count V alleges a violation of the D.C. Consumer Protection Procedures
Act (“CPPA”), which “is a comprehensive statute designed to provide procedures and remedies
for a broad spectrum of practices which injure consumers.” Dist. Cablevision Ltd. P’ship v.
Bassin, 828 A.2d 714, 722–23 (D.C. 2003) (quoting Atwater v. District of Columbia Dep’t of
Consumer & Reg. Affairs, 566 A.2d 462, 465 (D.C. 1989)). Under the CPPA, it is unlawful for a
“person,” among other things, to “misrepresent . . . a material fact which has a tendency to
14
mislead” or to “fail to state a material fact if such failure tends to mislead.” Id. § 28-3904. This
prohibition applies “whether or not any consumer is in fact misled, deceived or damaged
thereby.” Id.
The Court agrees with Fidia that Glyco’s claim fails as a matter of law because the CPPA
requires a consumer-merchant relationship between the parties. Dkt. 86 at 9. Notwithstanding
the sweeping language of § 28-3904, the D.C. Court of Appeals has held that the CPPA “was
designed to police trade practices arising only out of consumer-merchant relationships.” Howard
v. Riggs Nat. Bank, 432 A.2d 701, 709 (D.C. 1981). Multiple decisions in this District,
moreover, have held that a plaintiff fails to state a claim under the CPPA if the challenged
practice did not occur in the context of a consumer-merchant relationship between the parties,
see Howard, 432 A.2d at 709 (holding plaintiff could not state a claim against bank from which
she sought a construction loan based on bank employee’s alleged misrepresentations about
quality of contractor); Slaby v. Fairbridge, 3 F. Supp. 2d 22, 27 (D.D.C. 1998) (rejecting claim
against NASA premised on its rejection of plaintiff’s funding proposal); Clifton Terrace Assocs.,
Ltd. v. United Techs. Corp., 728 F. Supp. 24, 34 (D.D.C. 1990) (rejecting claim by owner of
apartment complex premised on alleged discrimination by elevator company against certain
owners of its elevators), aff’d in part and vacated in part, 929 F.2d 714 (D.C. Cir. 1991);
Mazanderan v. Indep. Taxi Owners’ Ass’n, Inc., 700 F. Supp. 588, 591 (D.D.C. 1988) (rejecting
claim by taxicab operator challenging, “in his role as an independent businessman,” professional
organization’s requirement that members purchase gasoline from it); Indep. Commc’ns Network,
Inc. v. MCI Telecomms. Corp., 657 F. Supp. 785, 788 (D.D.C. 1987) (rejecting claim by
telecommunications company based on another telecommunications company’s allegedly
disparaging remarks).
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Here, Glyco alleges that Fidia violated the CPPA by mispresenting “that Bionect Gel
products are patent protected, are registered with the FDA, and . . . [have] characteristics [or
formulas] that it does not have,” including that “Fidia’s Bionect Gel product, use, or method of
manufacturing would lead to results similar to the results of Glyco’s IPM Wound Gel product,
use, or method of manufacturing.” Dkt. 77 ¶¶ 175, 178. It also alleges that Fidia made
disparaging remarks about Glyco’s products. Id. ¶ 179. Glyco is not, however, a consumer of
Bionect, either directly or indirectly—it is the owner of a competing product—and Count V does
not include any allegation that Fidia made misrepresentations to Glyco with respect to any
transaction between the parties for a consumer good or service. At oral argument, moreover,
counsel for Glyco conceded that its allegations in Count V are duplicative of its allegations that
Fidia engaged in common law unfair competition. Because Glyco’s unlawful trade practice
allegations pertain solely to misrepresentations made to third parties—consumers of Bionect and
“prospective licensees,” id. ¶ 177—it fails to state a claim under the CPPA. In short, “the case
at bar involves a relationship between two entities which are both on the supply side of a
consumer-merchant interaction; it does not involve a consumer-merchant relationship itself.”
Indep. Commc’ns Network, Inc., 657 F. Supp. at 788.
Glyco responds that the CPPA provides a cause of action to an “individual,” and that
under cases like Citizens United v. FEC, 588 U.S. 310 (2010), and Burwell v. Hobby Lobby
Stores, Inc., 134 S. Ct. 2751 (2014), this term encompasses corporations. Dkt. 90 at 11–12. This
argument is unavailing for two reasons. First, although the CPPA does not expressly define
“individual,” it is clear from the CPPA’s definition of “person” that organizational entities like
corporations constitute “person[s],” but are not “individual[s].” See D.C. Code § 28-3901(a)(1)
(defining “person” to mean “an individual, firm, corporation, partnership, cooperative,
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association, or any other organization, legal entity, or group of individuals however organized”);
see also id. § 28-3901(b)(14) (defining “nonprofit organization” to mean “a person” who “[i]s
not an individual”). Second, the cause of action for an “individual” applies to challenges brought
by “an individual” “on behalf of that individual, or on behalf of both the individual and the
general public” regarding a “trade practice [that] involves consumer goods or services that the
individual purchased or received in order to test or evaluate qualities pertaining to use for
personal, household, or family purposes.” Id. § 28-3901(k)(1)(B) (emphases added). Glyco does
not allege that, even if it were an “individual” within the meaning of the CPPA, it is suing in its
capacity as a purchaser or recipient of the goods at issue. To the contrary, Glyco’s allegations
focus on the injury that it has allegedly suffered in its capacity as a competitor of Fidia. Claims
of that type fall beyond the scope of the CPPA.
For the foregoing reasons, the Court, accordingly, GRANTS Fidia’s motion to dismiss
Count V for failure to state a claim under the CPPA.
III. CONCLUSION
It is hereby ORDERED that Fidia’s motion to dismiss, Dkt, 85, is GRANTED in part
and DENIED in part. Counts IV, V, and VII, as well as the portion of Count VI specified above,
are DISMISSED.
SO ORDERED.
/s/ Randolph D. Moss
RANDOLPH D. MOSS
United States District Judge
Date: May 24, 2016
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