Cogent Solutions Grp., LLC v. Brown

• Decision Date: 20 November 2013
• Docket Number: Case No. 2:12-CV-665
• Parties: COGENT SOLUTIONS GROUP, LLC, Plaintiff, v. KAREN E. BROWN, Defendant.
• Court: U.S. District Court — Southern District of Ohio

COGENT SOLUTIONS GROUP, LLC, Plaintiff, v. KAREN E. BROWN, Defendant.

Case No. 2:12-CV-665

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

DATED: November 20, 2013

JUDGE EDMUND A. SARGUS, JR.

MAGISTRATE JUDGE ELIZABETH P. DEAVERS

OPINION AND ORDER

This matter is before the Court for consideration of several pending motions. For the reasons below, Plaintiff Cogent Solutions Group, LLC's motion to dismiss its complaint without prejudice is GRANTED in accordance with this Opinion and Order. Doc. 25. Defendant Dr. Karen E. Brown's motion to dismiss this case with prejudice is thus DENIED. Doc. 26 at 9. The parties' motions for sanctions are also DENIED. Doc. 27 (Dr. Brown); doc. 29 (Cogent). Finally, the following motions are DENIED AS MOOT—Dr. Brown's motion to amend her answer, doc. 18; Dr. Brown's motion for leave to file a sur-reply, doc. 24; and Cogent's motion to stay the litigation in this case during the pendency of its motion to dismiss, doc. 25 at 5.

I. BACKGROUND

A. General Factual Background

According to its complaint, Plaintiff Cogent Solutions Group, LLC ("Cogent") deals in the dietary-supplement business. Doc. 3 ¶ 6. It does so from Kentucky, id. ¶ 2, and it focuses on "researching, developing, manufacturing, marketing, and selling dietary supplement formulations containing hyaluronan ('HA') for both animal and human consumption," id. ¶ 6. The term "HA" refers to a polymer that occurs naturally in the human body. Id. ¶ 7. Skin and connective tissue,in particular, have high concentrations of HA. Id. HA breaks down naturally in humans as a result of aging, as well as a result of conditions like osteoarthritis. See id. ¶ 8. The breakdown of HA leads to painful joints and wrinkled skin. See id. Cogent alleges that it has developed and now sells a dietary supplement for humans under the federally trademarked name of Baxyl. See doc. 3 ¶¶ 9-10. Baxyl, according to Cogent's complaint, contains HA. Id. ¶ 9. Cogent asserts that its Baxyl product occupies the largest market share of similar dietary supplements. Id. ¶ 26.

According to her answer, Defendant Karen E. Brown ("Dr. Brown") "has been a laboratory scientist for about 40 years." Doc. 4 ¶ 22, at 9. During her time as a scientist she "has conducted or managed research and development projects that registered 44 new drug, pharmaceutical, vaccine or diagnostic products or technologies." Id. Dr. Brown also avers that a significant part of her experience has entailed work with HA. She has been "working specifically with the HA molecule for 31 years," and, of her 27 patents, "10 specifically relate[] to HA." Id. Several of these patents, for example, relate to something called "microbial fermentation," a method of "synthetically creat[ing] HA without requiring bovine or chicken tissue." Id.

Dr. Brown has also applied her HA-related experience to the dietary-supplement business. Cogent alleges that Dr. Brown is "affiliated with Hyalogic, LLC ['Hyalogic']," one of its competitors. Doc. 3 ¶ 12. Dr. Brown answers that "she provides consultant services for Hyalogic." Doc. 4 ¶ 12, at 6.

Dr. Brown's experience with HA and Dr. Brown's relationship to Hyalogic are central to this lawsuit. According to Cogent, all came together in a speech Dr. Brown gave in Columbus, Ohio. Specifically, Cogent alleges—and Dr. Brown admits, see doc. 4 ¶ 13—that Dr. Brown gave an address (the "Address") at the Natural Products Association Midwest Trade Show inColumbus on July 30, 2011. Hyalogic sponsored the Address. Doc. 4 ¶ 12, at 6. The particular part of the Address at issue in this case relates to two of the ingredients found in Cogent's Baxyl product, namely citric acid and potassium sorbate. Doc. 3 ¶ 25. Cogent contends that Baxyl contains "trace amounts" of these "FDA-approved, naturally-occurring preservative compounds to protect its users from potentially harmful bacteria growth." Id. According to Cogent's complaint, Dr. Brown in her Address told the audience that she had performed research in her home demonstrating that citric acid and potassium sorbate break down HA. See id. ¶¶ 17-22.

In Cogent's estimation, Dr. Brown's HA-related references harmed Baxyl's brand. Specifically, Cogent alleges that Dr. Brown's Address implied, and even stated outright, that citric acid and potassium sorbate render HA ineffective. See id. ¶ 17. Although Dr. Brown "also addressed how other preservatives allegedly degrade HA," id. ¶ 25, Cogent alleges Dr. Brown directed her statements at Baxyl in an effort to promote a similar Hyalogic product called "Synthovial Seven":

[H]er focus on the alleged degrading effect of citric acid and potassium sorbate was intentional and was calculated to draw a "scientific" distinction, for competitive purposes, between CSG's BAXYL® dietary supplement, which contains trace amounts of those FDA-approved, naturally-occurring preservative compounds to protect its users from potentially harmful bacteria growth, and Hyalogic's product, Synthovial Seven, which does not list any such preservative on its packaging.

Id.

Cogent further contests the veracity of Dr. Brown's assertions in the Address. Specifically, Cogent argues that Dr. Brown's statements as to HA's degradation lack support from a "published, peer-reviewed scientific study," doc. 3 ¶ 23; that Dr. Brown "told the audience that she had performed the 'research' underlying her 'findings' in her own home and at her own expense," id. ¶ 23; and that her conclusions are false, id. ¶ 24; see also id. ¶¶ 27, 29.

Based on Dr. Brown's Address, Cogent brought claims for common law defamation and tortious interference with business relationships. Cogent brought its complaint in July of 2012 in the Franklin County, Ohio Court of Common Pleas. See doc. 1 at 1; doc. 3 at 1. Dr. Brown then removed to this Court on the basis of diversity jurisdiction, doc. 1 at 1, and subsequently filed an answer to the complaint, doc. 4.

B. The Kentucky Lawsuit

This is not the first case that has dealt in part with Dr. Brown's Address. The parties rely on the circumstances of another, related case to support several of their motions. As background, the same Cogent in this case filed an action against Hyalogic, LLC—the same competitor for whom Dr. Brown consults—in the Eastern District of Kentucky (the "Kentucky Lawsuit"). The Kentucky Lawsuit also related to Cogent's Baxyl product:

Cogent Solutions Group, LLC ("CSG") and Hyalogic, LLC are competitors in the joint supplement market, with hyaluronic acid ("HA") being a key component in their respective products. In April 2011, CSG commenced suit against Hyalogic and Hoppy & Company, Inc. requesting the defedants to cease the dissemination of misleading information about CSG's product Baxyl, primarily focusing on the defendants' use of a "Competitive Analysis Chart" comparing the two competing products. On April 21, 2011, the parties entered into a Stipulated Agreement (R. 19, attach. 1) informing the court of their intent to mediate in good faith, and the defendants agreed to "remove all copies of 'the Chart' from circulation, and all copies, whether paper or electronic, shall be retained by counsel."

Cogent Solutions Group, LLC v. Hyalogic (Cogent I), LLC, No. 11-124-JBC, 2012 WL 1083513, at *1 (E.D. Ky. March 30, 2012).

Although the parties settled, Cogent later filed a motion to enforce the settlement agreement. Id. It did so based in part on the same speech at issue in this case—"a speech given by Dr. Karen Brown on July 30, 2011, at the National Products Association Midwest Trade Show." Id. The district court denied Cogent's motion, in part because it did not construe currentDefendant Dr. Brown's use of the word "competitors" "as a direct reference to Baxyl." Id. at *5; see also id. ("[I]t is not clear that Dr. Brown is referring to CSG or Baxyl because she never does so."). Cogent appealed to the Sixth Circuit, but to no avail. See Cogent Solutions Group, LLC v. Hyalogic, LLC (Cogent II), 712 F.3d 305, 311 (6th Cir. 2013) (dismissing Cogent's argument that "Dr. Brown's statements about the effects of citric acid and potassium sorbate on HA, unconnected to any products, should be interpreted as referring to Baxyl"). While pending on appeal, Cogent filed the instant action against Dr. Brown.

C. The Discovery Disputes

The parties have engaged in additional disputes beyond the one underlying this case. They stem from discovery, and they merit their own background given their relation to Planitiff's motion to dismiss, as well as the parties' motion for sanctions.

One of the disputes has to do with Dr. Brown's request for a protective order during the course of discovery. As background, Cogent served discovery requests to Dr. Brown on November 16, 2012. Doc. 26-2 at 2. These requests included 117 requests for admission, see doc. 26-2 at 15-29, well beyond the normal of 40 allowed by local rule, S.D. Ohio. Civ. R. 36.1. Dr. Brown only answered the first 40 requests for admission, which prompted Cogent to move for leave to serve the additional 77 requests. Doc. 10. The Magistrate Judge denied this request. See doc. 15 at 5 ("A review of Cogent's proposed requests for admission demonstrates that they are primarily crafted for purposes of discovery rather than, for example, to eliminate the necessity of proving facts that are not in substantial dispute. A number of the requests also seek admission of legal conclusions." (footnotes omitted)).

The parties also battled over the need for and language of a protective order. According to Dr. Brown, the facts of the dispute called for a protective order—particularly, in her argument,given the nature of the information each side sought during discovery (for example, research information and data), and the nature of the relationship between the parties (Cogent as a competitor of the company for whom Dr. Brown consults). The parties could not agree on the language of a protective order, which led to a conference with the Magistrate...