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Glen Ellyn Pharmacy, Inc v. Meda Pharmaceuticals

August 16, 2012

GLEN ELLYN PHARMACY, INC., PLAINTIFF,
v.
MEDA PHARMACEUTICALS, INC., DEFENDANT AND CROSS-CLAIMANT, THE HAL LEWIS GROUP, DEFENDANT AND CROSS-DEFENDANT,
AND DOES 1-10, DEFENDANTS.
THE HAL LEWIS GROUP, INC., THIRD PARTY PLAINTIFF,
v.
INTELLISPHERE, LLC D/B/A PHARMACY TIMES, AND SK&A INFORMATION SERVICES, INC., THIRD PARTY DEFENDANTS.
INTELLISPHERE, LLC D/B/A PHARMACY TIMES, THIRD PARTY PLAINTIFF,
v.
ODYSSEY SERVICES, INC., THIRD PARTY DEFENDANT.



The opinion of the court was delivered by: Judge Joan B. Gottschall

MEMORANDUM OPINION & ORDER

Before the court is Third-Party Defendant Odyssey Services, Inc.'s ("Odyssey's") motion to dismiss the third-party complaint of Intellisphere, LLC,*fn1 d/b/a Pharmacy Times ("Pharmacy Times"). For the reasons stated below, the court denies the motion.

I. BACKGROUND

As this court has already explained the somewhat convoluted posture of this case in greater detail elsewhere, see Glen Ellyn Pharmacy, Inc. v. Meda Pharm., Inc., No. 09 C 4100, 2011 WL 6156800 (N.D. Ill. Dec. 9, 2011), the court will provide only a brief overview here. Plaintiff Glen Ellyn Pharmacy, Inc. ("Glen Ellyn") filed suit against Meda Pharmaceuticals, Inc. ("Meda") alleging that Glen Ellyn received two unsolicited facsimile advertisements for products and services relating to Meda's "Soma 250" product. Glen Ellyn also named the Hal Lewis Group, Inc. ("Hal Lewis") as a defendant, claiming that Hal Lewis acted as Meda's agent in causing the faxes to be sent. Hal Lewis, in turn, filed a third-party complaint against Pharmacy Times and SK&A Information Services, Inc. ("SK&A"), stating that it sent faxes only to those numbers that Pharmacy Times claimed to have received from SK&A for pharmacists and pharmacies that agreed to receive advertisements. Pharmacy Times then filed its own cross-complaint against SK&A, accusing SK&A of, inter alia, breach of contract, negligent misrepresentation, and intentional misrepresentation. The faxes themselves were sent by Odyssey, and Pharmacy Times filed yet another third-party complaint against Odyssey for breach of contract and contribution.

It is this last complaint against Odyssey that is at issue. Pharmacy Times alleges that it retained SK&A to assist it in complying with Meda's request, and that SK&A represented to Pharmacy Times that it had a list of pharmacies that had provided express permission for SK&A to send faxes to them. According to Pharmacy Times, after it began talks with SK&A, SK&A sent to Pharmacy Times both a "Service Provider Agreement" from SK&A and an "End User Service Agreement" from a company called Odyssey. Pharmacy Times signed both agreements; the End User Service Agreement ("the Odyssey Agreement") is attached to the complaint.*fn2 Pharmacy Times asked SK&A to add legally compliant "opt-out" language to the Soma 250 fax, and SK&A subcontracted with Odyssey to do so. Odyssey provided at least part of the opt-out language for the Soma 250 fax, and oversaw the entire opt-out process. But according to Glen Ellyn's complaint, Glen Ellyn had not consented to receive these faxes, and the faxes did not contain legally compliant opt-out language. Thus, Pharmacy Times now alleges that Odyssey breached the Odyssey Agreement by "failing to perform facsimile broadcasting services, including providing opt-out language and overseeing the campaign's opt-out process in full compliance with federal and state laws." Pharmacy Times also seeks contribution from Odyssey in the event that Pharmacy Times ends up being liable to Hal Lewis.

Odyssey has moved to dismiss, arguing that the Odyssey Agreement (1) contains a forum selection clause that requires this case to be brought in New Jersey, (2) dictates that Pharmacy Times is obliged to indemnify Odyssey for these claims, and (3) requires Pharmacy Times to bear sole responsibility for using Odyssey's services in accordance with all applicable laws. The court addresses each issue in turn.

II.LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), the defendant may seek to dismiss the case if the plaintiff "fail[s] to state a claim upon which relief can be granted." The court accepts as true all well-pleaded facts and draws all reasonable inferences in favor of the plaintiff. Stayart v. Yahoo! Inc., 623 F.3d 436, 438 (7th Cir. 2010). But although Federal Rule of Civil Procedure 8(a) requires the complaint to contain only "a short and plain statement of the claim showing that the pleader is entitled to relief," the complaint must include "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (noting that while Rule 8 does not require detailed factual allegations, "it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation"). The relevant question is whether the complaint includes enough factual allegations to "raise a right to relief above the speculative level." Bell Atl. Corp., 550 U.S. at 555.

III. ANALYSIS

A. The Forum Selection Clause

The court first turns to the forum selection clause. Pharmacy Times and Odyssey agreed to conduct their business pursuant to the Odyssey Agreement, which states in relevant part:

This Agreement shall be interpreted and governed by the laws of the State of New Jersey without regard to its rules governing conflicts of law, and the parties agree to submit to the exclusive jurisdiction of the state or federal courts located in or with responsibility for Monmouth County, New Jersey, to resolve any disputes arising hereunder.

The court addressed a similar forum selection clause in its earlier opinion. See Glen Ellyn Pharmacy, Inc., 2011 WL 6156800, at *4-7. There, the court noted that in the Seventh Circuit, the validity of a forum-selection clause depends upon the law of the jurisdiction whose rules govern the dispute. Id. (citing IFC Credit Corp. v. United Bus. & Indus. Fed. Credit Union, 512 F.3d 989, 991 (7th Cir. 2008)). But because the parties to the earlier dispute (SK&A and Pharmacy Times) had not attempted to apply their California choice-of-law provision, the court applied federal law, and concluded that the presumption of validity had been overcome based on the inconvenience to the judicial system. See id. at *6-7 (citations omitted). While the court agreed that the claims SK&A sought to litigate in California were not identical to the claims brought by Glen Ellyn and others in federal court, the claims were "closely related" and "intertwined." Id. Moreover, the court noted that the rulings in its federal case would inform, and arguably dictate, the outcome of some of SK&A's claims. Consequently, this court concluded that "to ask another court to address claims that are dependent upon and closely related to claims that have been pending before this court for over two years would be to sanction the waste of scarce judicial resources," and declined to enforce the forum selection clause.

In the instant case, regardless of whether this court applies federal or New Jersey law, the court reaches the same conclusion. New Jersey courts do not enforce forum selection clauses if they "violate the strong public policy of the local public forum." See McNeill v. Zoref, 687 A.2d 1052, 1056-57 (N.J. Super. App. Div. 1997). One such public policy is the "entire controversy doctrine," which dictates that courts should strive to resolve "all claims against all potential defendants in one encompassing litigation." Id. (citing Cogdell v. Hosp. Ctr. at Orange, 560 A.2d 1169 (N.J. 1989)). This policy exists "(1) to encourage the comprehensive and conclusive determination of a legal controversy; (2) to achieve party fairness, including both parties before the court as well as prospective parties; and (3) to promote judicial economy and efficiency by avoiding fragmented, multiple and duplicative litigation." Id. (citations omitted); see also Sparwick Contracting, Inc. v. Tomasco Corp., 761 A.2d 90, 96 (N.J. Super. App. Div. 2000) ("New Jersey recognizes the validity of forum selection clauses, but allows a court to decline to enforce ...


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