Greenberg v. Miami Children's Hosp. Research Inst.

• Decision Date: 08 July 2002
• Docket Number: No. 00 C 6779.,00 C 6779.
• Parties: 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.
• Court: U.S. District Court — Northern District of Illinois

Page 918

208 F.Supp.2d 918

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.

No. 00 C 6779.

United States District Court, N.D. Illinois, Eastern Division.

July 8, 2002.

COPYRIGHT MATERIAL OMITTED

Laurie Ellen Leader, Edward M. Kraus, Chicago, IL, for plaintiffs.

Steven Henry Hoeft, Jeffrey E. Stone, Jeffrey Michael Hansen, McDermott, Will & Emery, Chicago, IL, for Miami Children's Hosp. Research Institute, Inc., Varity Children's Hosp., defendants.

Kevin T. Keating, Mark E. Shure, Keating & Shure, Ltd., Chicago, IL, for Reuben Matalon, defendant.

MEMORANDUM OPINION AND ORDER

GETTLEMAN, District Judge.

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"),¹ 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.²

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 complaint alleges that in 1987 there was no way to identify who was a carrier of Canavan disease, nor was there a way to identify a fetus inflicted with Canavan disease. Greenberg approached Matalon, a research physician who was at that time affiliated with the University of Illinois at Chicago ("UIC"), provided him with information about Canavan and requested his involvement in discovering the gene associated with Canavan disease so that tests could be performed to determine carriers and allow for prenatal testing for the disease. Over the next seven years, Greenberg provided Matalon with tissue and blood samples from members of his family, and following the death of his son afflicted with Canavan, provided Matalon with tissue samples from his diseased son's brain and other major organs. During that time, in 1990, Matalon moved his research to Children's Hospital. The other individual plaintiffs from jurisdictions outside Illinois, and Dor Yeshorim, a New York corporation, supplied Matalon with blood, tissue and urine samples beginning in the late 1980s. Plaintiffs Greenberg, Green, Canavan and NTSAD facilitated Matalon's research on Canavan disease through monetary contributions.

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.

Based on these facts, plaintiffs filed a six-count complaint against defendants asserting the following causes of action: 1) lack of informed consent; 2) breach of fiduciary duty; 3) unjust enrichment; 4) fraudulent concealment; 5) conversion; and, 6) misappropriation of trade secrets. Plaintiffs generally seek a permanent injunction restraining defendants from enforcing their patent rights, and damages in the form of all royalties defendants have received on the patent as well as all financial contributions plaintiffs made to benefit defendants.

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, 72 S.Ct. 413, 96 L.Ed. 485 (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, 105 S.Ct. 2174, 85 L.Ed.2d 528 (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, 66 S.Ct. 154, 90 L.Ed. 95 (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, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) (emphasis added). Defendants may not be forced to defend this lawsuit in Illinois "solely as a result of random,...