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Boyd v. Tornier

June 16, 2009

GARY BOYD, BOYD MEDICAL INC., CHARLES WETHERILL, AND ADDISON MEDICAL, INC., PLAINTIFFS,
v.
TORNIER, INC., AND NEXA ORTHOPEDICS, INC., DEFENDANTS.



The opinion of the court was delivered by: Reagan, District Judge

ORDER AND MEMORANDUM

A. Introduction and Background

Currently before the Court is Nexa Orthopedics's motion for summary judgment (Doc. 100). The general factual background is as follows. Plaintiffs Boyd Medical and Addison Medical are distributors,*fn1 which contracted with Tornier to sell Tornier's orthopedic medical devices in certain regions of the United States. In 2003, the parties entered into separate contracts through which Boyd Medical became Tornier's exclusive distributor in Illinois, Missouri, and Kansas, and Addison Medical became Tornier's exclusive distributor in Iowa.*fn2

Like Tornier, Nexa Orthopedics was also in the business of developing, manufacturing, and marketing orthopedic medical devices. On February 12, 2007, Tornier's parent company purchased Nexa with the intention of merging Nexa into Tornier. At that time, Tornier began investigating how it would handle the presence of Nexa distributors in territories where Tornier already had exclusive distributors. Tornier executives conducted meetings with Chris Harber, who was at that time Nexa's Vice President of Marketing and Sales. Harber was asked to give his impressions of Nexa's distributors to facilitate Tornier's decisions as to which distributors to keep in the merger. Harber recommended that all Nexa distributors be retained and advocated on their behalf. At some point thereafter, Tornier interviewed various Nexa distributors including Archway Medical.

Ultimately, Tornier decided that some Nexa distributors would continue to sell only Nexa products in the same region where Tornier distributors sold Tornier products. In other regions, the Tornier distributor absorbed all of the Nexa business and the Nexa distributors were eliminated. With respect to the territory in which Boyd Medical and Addison Medical operated, Tornier opted to give its business to a Nexa distributor-Archway Medical. Thus, in April 2007, Tornier notified Plaintiffs that it planned to terminate its Agency Agreements with each of them. In May 2007, Tornier confirmed this termination in writing, effective May 31, 2007. Tornier claims that it acted within its rights because each Plaintiff failed to meet its first quarter quota that year.*fn3 As of June 2007, Archway Medical became Tornier's and Nexa's exclusive distributorship in the Boyd Medical and Addison Medical territories.

On October 31, 2007, Plaintiffs filed the above-captioned action. In addition to their claims against Tornier, Plaintiffs claim that Nexa tortiously interfered with their business relationship as to Tornier (Counts 4 and 8).*fn4 Nexa filed its motion for summary judgment on March 9, 2009 (Doc. 100). Having fully reviewed the parties' filings, the Court hereby GRANTS Nexa's motion.

B. Standards Governing Motions for Summary Judgment

Summary judgment is appropriate when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). FEDERAL RULE OF CIVIL PROCEDURE 56(a) provides:

[Summary judgment] should be rendered if the pleadings, the discovery and disclosure materials on file and any affidavits show that there is no genuine issue as to any material fact that the movant is entitled to as a matter of law.

Because the primary purpose of summary judgment is to isolate and dispose of factually unsupported claims, the non-movant may not rest on the pleadings but must respond, with affidavits or otherwise, setting forth specific facts showing that there is a genuine issue for trial. Oest v. IDOC, 240 F.3d 605, 610 (7th Cir. 2001); Moore v. J.B. Hunt Transport, Inc., 221 F.3d 944, 950 (7th Cir. 2000). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The burden is on the non-moving party to produce specific facts that show a genuine issue for trial. FED.R.CIV.P. 56(e); Moore, 221 F.3d at 950. "Conclusory allegations and self-serving affidavits, if not supported by the record, will not preclude summary judgment." Haywood

v. North American Van Lines, Inc., 121 F.3d 1066, 1071 (7th Cir. 1997); see alsoFED.R.CIV.P. 56(e) ("an opposing party may not rely merely on allegations or denials in its own pleading").

In determining whether a genuine issue of material fact exists, the Court views the record in the light most favorable to-and draws all reasonable inferences in favor of-the non-moving party. Anderson, 477 U.S. at 255.

C. Analysis

1. Governing Law

The first issue before the Court is which state's law should apply to the Plaintiffs' individual tort claims. Nexa claims that Texas law should apply, because most of the tortious conduct occurred there. Plaintiffs, on the other hand, argue that the state law of their respective domiciles should apply. That is, Missouri law should apply to Boyd Medical's and Garry Boyd's claims and Iowa law should apply to Addison Medical's and Charles Wetherill's claims.*fn5

As a federal court exercising diversity jurisdiction, this Court applies federal law in resolving procedural and evidentiary issues, and Illinois law with respect to substantive law. Bevolo v. Carter, 447 F.3d 979, 982 (7th Cir. 2006) (citing Colip v. Clare, 26 F.3d 712, 714 (7th Cir. 1994)). As such, this Court applies Illinois's choice-of-law rules to determine the applicable substantive law. See Hinc v. Lime-O-Sol Company, 382 F.3d 716, 719 (7th Cir. 2004); Kohler v. Leslie Hindman, Inc., 80 F.3d 1181, 1184 (7th Cir. 1996). Illinois follows theRESTATEMENT (SECOND) OF CONFLICT OF LAWS in making such decisions. Midwest Grain Products of Illinois, Inc. v. Productization, Inc., 228 F.3d 784, 787 (7th Cir. 2000).

In determining which state's law applies to Plaintiffs' tort claims against Nexa, the Court "select[s] the law of the jurisdiction that has the 'most significant relationship' to the events out of which the suit arose, and to the parties." Carris v. Marriott International Inc., 466 F.3d 558, 560 (7th Cir. 2006) (citing Esser v. McIntyre, 661 N.E.2d 1138, 1141 (Ill. 1996)). The law of the place where the injury occurred is presumed to apply unless another state has a more significant relationship to the occurrence or parties. Pittway Corp. v. Lockheed Aircraft Corp., 641 F.2d 524, 527 (7th Cir. 1981); see Spinozzi v. ITT Sheraton Corp., 174 F.3d 842, 844 (7th Cir. 1999). In determining whether another state has a more significant relationship to the occurrence or parties, the Court may also consider (1) the place where the injury causing conduct occurred, (2) the domicile of the parties, and (3) the place where the relationship of the parties is centered. Pittway Corp., 641 F.2d at 527.

The situs of Plaintiffs' injuries from the alleged tortious interference is the same as the domicile of each Plaintiff. Indeed, Plaintiffs' businesses are located in these states and their operations were run there. Furthermore, Addison Medical's exclusive distributorship only serviced Iowa counties. The Plaintiffs' domicile states can also be thought of as the center of the parties' relationships. The only factor weighing in Texas's favor is that many of Nexa's discussions with Tornier regarding the benefits of making Archway Medical an exclusive Tornier distributor occurred in Texas. However, that factor alone is not sufficient to overcome other considerations.

The Court determines that Missouri has the most significant relationship to Boyd Medical and Boyd's claims, so this Court will apply Missouri law as to their tort claims. Iowa has the most significant relationship to Wetherill and Addison Medical's claims, so this Court will apply Iowa law as to their tort claims. Thankfully, Nexa cited Missouri and Iowa law in support of its motion for summary judgment alongside legal authority from Texas, the state law it hoped would be applied. In any case, the Court notes that the ...


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