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GREENBERG v. MIAMI CHILDREN'S HOSPITAL RESEARCH INSTITUTE

July 8, 2002

DANIEL GREENBERG, FERN KUPFER, FRIEDA EISEN, DAVID GREEN, CANAVAN FOUNDATION, DOR YESHORIM, AND NATIONAL TAY-SACHS AND ALLIED DISEASES ASSOCIATION, INC., PLAINTIFFS,
V.
MIAMI CHILDREN'S HOSPITAL RESEARCH INSTITUTE, INC., VARIETY CHILDREN'S HOSPITAL D/B/A MIAMI CHILDREN'S HOSPITAL, AND REUBEN MATALON, DEFENDANTS.



The opinion of the court was delivered by: Robert W. Gettleman, United States District Judge

  MEMORANDUM OPINION AND ORDER

This case arises from a noble pursuit by the parties to detect and someday cure a fatal genetic disorder called Canavan disease. Before the court are a motion to dismiss for lack of personal jurisdiction and venue filed by defendant Miami Children's Hospital Research Institute, Inc. and defendant Variety Children's Hospital, d/b/a Miami Children's Hospital (collectively "Children's Hospital"),*fn1 motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief may be granted, or in the alternative, to transfer venue of the case pursuant to 28 U.S.C. § 1404 (a) filed by Children's Hospital and defendant Reuben Matalon ("Matalon"), and plaintiffs' motion to strike the affidavit of Steven Melnick. Because the court finds merit with Children's Hospital's motion to dismiss for lack of personal jurisdiction and lack of venue, in the interests of justice, the court sua sponte transfers venue of this case pursuant to 28 U.S.C. § 1406 (a), to the Southern District of Florida where the court will have personal jurisdiction and venue over all parties to this action.*fn2

BACKGROUND

Plaintiffs Daniel Greenberg ("Greenberg"), Fern Kupfer ("Kupfer"), Frieda Eisen ("Eisen"), David Green ("Green"), Canavan Foundation, Dor Yeshorim and National Tay-Sachs & Allied Diseases Association, Inc. ("NTSAD"), sued Children's Hospital and Matalon, alleging diversity jurisdiction under 28 U.S.C. § 1332. The individual plaintiffs are parents of children afflicted with Canavan disease, a fatal, incurable, genetic disorder that occurs most frequently in Ashkenazi Jewish families. Defendants are a physician/researcher, a Children's hospital and the hospital's research affiliate. While Greenberg is an Illinois resident, all six other plaintiffs are citizens of different states including Iowa, New York, Virginia and Massachusetts. Defendant Matalon is a citizen of Texas, and Children's Hospital are citizens of Florida.

The individual plaintiffs allege that they provided Matalon with such samples and confidential filial information "with the understanding and expectation that such samples and information would be used for the specific purpose of researching Canavan disease and identifying mutations in the Canavan gene which could lead to carrier detection within their families and benefit the population at large." Plaintiffs further allege that it was their "understanding that any carrier and prenatal testing developed in connection with the research for which they were providing essential support would be provided on an affordable and accessible basis, and that Matalon's research would remain in the public domain to promote the discovery of more effective prevention techniques and treatments and, eventually, to effectuate a cure for Canavan disease." Plaintiffs allege that this "understanding" was derived in part from "their experience in community testing for Tay-Sachs disease, another deadly genetic disease that occurs most frequently in families of Ashkenazi Jewish descent."

Plaintiffs allege that at no time were they informed that defendants intended to seek a patent on their research. Consistent with plaintiffs' understanding, Canavan Foundation launched a free testing program at Mt. Sinai Hospital in New York City. In September 1994, unbeknownst to plaintiffs, Miami Children's Research Hospital applied for a patent on the Canavan disease gene and related applications which included carrier and prenatal testing. Matalon and his collaborators were listed as inventors and, through the patent, defendants acquired the ability to restrict any activity related to the Canavan disease gene. Plaintiffs first learned of this patent in November 1998 "when [Children's Hospital] revealed their intention to limit Canavan disease testing through a campaign of restrictive licensing of the patent." Plaintiffs allege that Children's Hospital has sent "enforcement letters" "threaten[ing]" centers offering Canavan testing that Children's Hospital "intended to enforce vigorously [their] intellectual property rights relating to carrier and patient DNA tests for Canavan Disease mutations," and have sought to "substantially restrict the number of laboratories authorized to conduct Canavan disease testing through exclusive licensing agreements." Plaintiffs allege that defendants have earned significant royalties from Canavan disease testing in excess of $75,000 through the enforcement of their gene patent, and that Matalon has personally profited by receiving a recent substantial federal grant to undertake research on the gene.

PERSONAL JURISDICTION

Evaluating a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, plaintiffs bear the burden of establishing a prima facie case for personal jurisdiction. See, Central States, Southeast and Southwest Areas Pension Fund v. Reimer Express World Corp. ("Reimer Express"), 230 F.3d 934, 939 (7th Cir. 2000); Steel Warehouse of Wisc., Inc. v. Leach, 154 F.3d 712, 714 (7th Cir. 1998). When determining personal jurisdiction over a defendant, the court can consider affidavits submitted by the parties, see Kontos v. U.S. Dept. of Labor, 826 F.2d 573, 576 (7th Cir. 1987), and "must accept all undenied factual allegations and resolve all factual disputes in favor of the party seeking to establish jurisdiction." Saylor v. Dyniewski, 836 F.2d 341, 342 (7th Cir. 1988).

The court has jurisdiction over a non-resident, nonconsenting defendant in a diversity case if Illinois state courts would have jurisdiction. McIlwee v. ADM Industries, Inc., 17 F.3d 222, 223 (7th Cir. 1994); RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272 (7th Cir. 1997). "The Illinois long-arm statute permits its courts to exercise jurisdiction on any basis permitted by the Illinois and United States Constitution." Reimer Express, 230 F.3d at 940, citing, 735 Ill.Comp.Stat. 5/2-209(c). There are two types of jurisdiction, general and specific. If a defendant's contacts with the forum state are sufficiently "substantial[,] . . . continuous and systematic," personal jurisdiction may exist for a cause of action unrelated to those contacts. Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 447-48 (U.S. 1952). If a nonresident defendant's contacts are not sufficient to support general jurisdiction, a defendant may still be subject to specific jurisdiction for claims arising out of or related to its "purposefully" directed activities within the state. Burger King v. Rudzewicz, 471 U.S. 462, 473 n. 15 (U.S. 1985).

In order to comport with due process, however, a defendant "must have `minimum contacts' with Illinois such that maintaining this lawsuit does not offend traditional notions of fair play and substantial justice." FMC Corp. v. Varonos, 892 F.2d 1308, 1311 n. 5 (7th Cir. 1990), citing International Shoe Co. v. Washington, 326 U.S. 310, 316 (U.S. 1945). Simply put, a defendant must have "purposefully availed" himself of the privilege of conducting activities within Illinois, such that he should "reasonably anticipate being hailed into court" here. Worldwide Volkswagon Corp. v. Woodson, 444 U.S. 286, 297 (U.S. 1980) (emphasis added). Defendants may not be forced to defend this lawsuit in Illinois "solely as a result of random, fortuitous, or attenuated contacts" or because of the "unilateral activity of another party or third person." Burger King Corp., 471 U.S. at 475.

While not articulated as such, it appears that plaintiffs assert that the effect on non-party Illinois residents and defendants' enforcement of their patent rights and restriction of Canavan testing only to licensees that are located in Illinois constitutes defendants "doing business" in Illinois, sufficient to find general jurisdiction. Plaintiffs fail to cite a single case that supports the proposition that a forum has general personal jurisdiction over a foreign licensor based on the location of one or more of its licensees in the forum state. The single unreported case relied on by ...


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