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Lincoln Diagnostics, Inc. v. Panatrex

November 16, 2009


The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge


This case is before the court for ruling on various motions filed by the parties and for a final award of attorney's fees to Plaintiff, Lincoln Diagnostics, Inc. Following this court's careful and thorough consideration of the arguments of the parties, this court rules as follows: (1) the Motion for Partial Stay of Injunction (#155) and Rule 59(e) Motion to Alter or Amend a Judgment (#157) filed by Defendant, Panatrex, Inc., are DENIED; (2) Plaintiff is awarded attorney's fees in the total amount of $133,904.35; (3) Plaintiff's Motion to Strike Declaration of Paul E. Adami and Motion for Sanctions (#163) is GRANTED; and (4) Defendant's Motion to Suspend Finality of Judgment on the Merits Pending Decision of Attorney's Fee Motion (#156), Motion to Withdraw Motion for Partial Stay of Injunction (#166), Motion for Leave to File Reply (#168), and Motion to Waive Requirement for Filing of Memorandum of Law (#169) are DENIED as moot.


A bench trial was held in this case on March 23 and 24, 2009. This court had previously, on May 29, 2008, entered summary judgment in favor of Plaintiff on the issue of liability. The bench trial was held solely on the issue of the appropriate remedy to be awarded to Plaintiff. Following the bench trial, the parties filed Memoranda with the court and numerous motions. On September 16, 2009, this court entered an Opinion (#152). This court ruled on all pending matters and Judgment (#153) was entered in favor of Plaintiff and against Defendant. As part of this court's ruling, this court determined that Plaintiff was entitled to the entry of a permanent injunction and all of the attorney's fees it had incurred in this case. Plaintiff was allowed 30 days to file an affidavit setting out the total amount of attorney's fees incurred. Defendant was allowed 14 days to file any objections to the amount of the fees requested.

As for the injunction, this court ordered that Defendant, and any entity acting on Defendant's behalf, is permanently enjoined from making any of the following claims in any form of advertising, including in package inserts in Defendant's products: (1) that its products have approval or qualification by the FDA; (2) that the price for Defendant's Quanti-Test(r) system is 50-70% less than Defendant's major competitor; (3) that the use of Defendant's products, due to a "unique patented design[,]" permit excess allergen to be wiped out and flow back to the well permitting savings in the cost of allergens, and use of Defendant's products may save about 50% of the user's cost; (4) that the Quick-Test(r) applicator can limit the puncture depth within 0.3-0.4 mm. thereby preventing false positive results and being more accurate; (5) that, to ensure quality control, the prong of each Quanti-Test(r) device is checked by a magnifier glass prior to packaging; (6) that false positive results can be easily avoided by use of Defendant's products; (7) that Defendant possesses a clinical study to prove that Defendant's products are more accurate and that Defendant's products are subject to low false negative results by use of the Carr study; (8) that Defendant's products are "the" and/or "a" most popular skin test device in the world; (9) that use of Defendant's products can result in a reduced cost without any reduction in efficacy; (10) that Defendant's products include a cap sealing structure which protects allergens from contamination; and (11) that Defendant's products provide protection not offered by competitive products in avoiding the introduction of unwanted amounts of 1000X allergens into a patient's dermis layer to avoid false positive results.



On September 30, 2009, Defendant filed a Motion for Partial Stay of Injunction (#155). Defendant stated that the court, in its Opinion, found that Defendant's package insert was subject to the injunction. Defendant further stated that "[a]lteration of the package insert requires approval from the Food and Drug Administration." Defendant attached the Declaration of its president, Ray Ling Hsiao, in which Dr. Hsiao stated that this statement is "true and correct." Defendant asked this court to stay the portion of the judgment which would enjoin the use of the package insert currently being used "until such time as the new package insert is approved by the Food and Drug Administration."

On October 9, 2009, Plaintiff filed a Memorandum of Law in Opposition to Defendant's Motion for Partial Stay of Injunction (#160). Plaintiff pointed out that Defendant did not file a supporting memorandum of law. Plaintiff then argued that, although Defendant's Motion is not entirely clear, Defendant appeared to be seeking permission from this court to continue use of its present package insert until such time as the Food and Drug Administration (FDA) "approves" a proposed package insert in "substitution" for the present package insert which includes claims found false and misleading by this court no later than May 29, 2008. Plaintiff argued that it therefore appeared that Defendant delayed any revision to its admittedly false and misleading marketing statements notwithstanding this court's determination of Defendant's liability under the Lanham Act and the Illinois Uniform Deceptive Trade Practices Act on May 29, 2008. Plaintiff noted that Defendant provided no reason or explanation for its delay in acting to modify its package insert following this court's entry of summary judgment in favor of Plaintiff. Plaintiff also noted that it was unable to locate any statutory or regulatory provision which provided that FDA approval was required for modification of Defendant's package insert. Plaintiff stated that "[m]ore importantly, it appears inappropriate for the District Court to be asked to authorize the continued use of false and misleading marketing claims by [Defendant] without any regard to the diligence displayed by [Defendant] in correcting or modifying such claims."

This court agrees with Plaintiff that Defendant has had more than ample time to modify its package insert to remove claims found false and misleading. In addition, Defendant has provided no citation to any authority in support of its claim that it cannot modify its package insert without first obtaining approval from the FDA. Accordingly, Defendant's Motion for Partial Stay of Injunction (#155) is DENIED.


On September 30, 2009, Defendant filed a Rule 59(e) Motion to Alter or Amend a Judgment (#157) and a Memorandum in Support (#158). Defendant argued that this court did not adequately consider the public interest when it entered its judgment granting a permanent injunction. Defendant also argued that this court should not have based its award of attorney's fees on Defendant's discovery responses, contending that discovery differences were resolved at least seven months prior to trial. Defendant also asked this court to reduce any attorney's fees awarded to Plaintiff based upon its lack of success as to some of its requests for relief. Defendant further contended that this court should consider Defendant's financial condition in any award of attorney's fees.

On October 9, 2009, Plaintiff filed its Memorandum of Law in Opposition to Defendant's Motion to Alter or Amend Judgment (#161). Plaintiff argued that Defendant had not shown that it was entitled to any relief from this court's judgment. This court agrees.

In order to prevail on a motion brought under Rule 59(e), a party must clearly establish either a manifest error of law or fact or must present newly discovered evidence. See Sigworth v. City of Aurora, Ill., 487 F.3d 506, 512 (7th Cir. 2007), citing LB Credit Corp. v. Resolution Tr. Corp., 49 F.3d 1263, 1267 (7th Cir. 1995). Rule 59(e) motions serve a narrow purpose and are not intended to serve as a vehicle to re-litigate old matters. Stanley v. Posner, 2009 WL 3230320, at *2 (S.D. Ill. 2009), citing Moro v. Shell Oil Co., 91 F.3d 872, 876 (7th Cir. 1996). "Rule 59(e) is not a procedural folly to be filed by a losing party who simply disagrees with the decision; otherwise, the Court would be inundated with motions from dissatisfied litigants." Stanley, 2009 WL 3230320, at *2, citing Yorke v. Citibank, N.A. (In re BNT Terminals, Inc.), ...

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