Medtech Products Inc. v. Ranir, LLC

• Decision Date: 30 September 2008
• Docket Number: No. 07-CV-3302 (KMK)(LMS).,07-CV-3302 (KMK)(LMS).
• Parties: MEDTECH PRODUCTS INC., Plaintiff, v. RANIR, LLC and CVS Pharmacy, Inc., Defendants. Medtech Products Inc., Plaintiff, v. DenTek Oral Care, Inc., Kelly M. Kaplan, Ray Duane, and C.D.S. Associates, Inc., Defendants. Medtech Products Inc., Plaintiff, v. Power Products, Inc. d/b/a Splinter, Defendant.
• Court: U.S. District Court — Southern District of New York

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596 F.Supp.2d 778

MEDTECH PRODUCTS INC., Plaintiff, v. RANIR, LLC and CVS Pharmacy, Inc., Defendants.

Medtech Products Inc., Plaintiff, v. DenTek Oral Care, Inc., Kelly M. Kaplan, Ray Duane, and C.D.S. Associates, Inc., Defendants.

Medtech Products Inc., Plaintiff, v. Power Products, Inc. d/b/a Splinter, Defendant.

Case No. 07-CV-3302 (KMK)(LMS).

United States District Court, S.D. New York.

September 30, 2008.

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W. Edward Ramage, Esq., Baker, Donelson, Bearman, Caldwell & Berkowitz PC, Nashville, TN, for Plaintiff Medtech Products Inc.

Clinton P. Sanko, Esq., Micheline K. Johnson, Esq., Thomas O. Helton, Esq., John M. Phillips, Esq., Baker, Donelson, Bearman, Caldwell & Berkowitz PC, Chattanooga, TN, for Plaintiff Medtech Products Inc.

Karl Geercken, Esq., Alston & Bird, LLP, New York, NY, for Plaintiff Medtech Products Inc.

Samuel F. Miller, Esq., Baker, Donelson, Bearman, Caldwell & Berkowitz PC, Memphis, TN, for Plaintiff Medtech Products, Inc.

John P. Fulco, Esq., Petek Gunay, Esq., Salon Marrow Dyckman Newman Broudy LLP, New York, NY, for Defendant Kelly M. Kaplan.

Michael A. Freeman, Esq., Greenberg Freeman, L.L.P., New York, NY, for Defendants Ray Duane and C.D.S. Associates, Inc.

James H. Shalek, Esq., Alan Federbush, Esq., Theodore K. Cheng, Esq., Proskauer Rose LLP, New York, NY, for Defendant DenTek Oral Care, Inc.

Gregory J. Sieczkiewicz, Esq., Proskauer Rose LLP, Boston, MA, for Defendant DenTek Oral Care, Inc.

OPINION AND ORDER

KENNETH M. KARAS, District Judge:

Plaintiff Medtech Products Inc. ("Medtech") filed this consolidated action against Defendants DenTek Oral Care, Inc. ("DenTek"), Kelly M. Kaplan ("Kaplan"), Ray Duane ("Duane"), and C.D.S. Associates, Inc. ("C.D.S.") (collectively, "Defendants"), alleging patent, trademark, and copyright infringement, as well as unfair competition, breach of contract, tortious interference with contractual relations, civil conspiracy, trade secret misappropriation, and tortious interference with an advantageous business relationship. Before the Court are Defendants' various motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), as well as Medtech's Motion to Strike DenTek's Memorandum of Law, Medtech's Motion to Strike C.D.S.' Motion to Dismiss, and DenTek's Motion to Compel Medtech to disclose with particularity those trade secrets that were allegedly misappropriated.

I. Background

The Court assumes the Parties' familiarity with the factual and procedural background of this case as it is thoroughly set forth in Magistrate Judge Lisa Margaret Smith's Report & Recommendation dated June 2, 2008 ("R & R").¹

In her R & R, Magistrate Judge Smith has recommended that this Court adopt the following rulings with respect to the pending motions: (1) deny Medtech's Motion to Strike C.D.S.' Motion to Dismiss (R & R 800 n. 3); (2) deny Medtech's Motion to Strike DenTek's Memorandum of Law (id. 802); (3) deny Defendants' Motions to Dismiss Medtech's trade secret misappropriation claims (id. 806; (4) grant Kaplan and Duane's Motions to Dismiss Medtech's claim for breach of the Proprietary Information and Inventions Agreement ("PIIA") (id. 810-11); (5) deny Duane and C.D.S.' Motion to Dismiss Medtech's breach of contract claim based on the non-compete and non-solicitation clauses of the Consulting Agreement (id. 811); (6) deny C.D.S.' Motion to Dismiss Medtech's breach of contract claim based on the confidentiality provisions of C.D.S.' PIIA (id.); (7) deny Duane and Kaplan's Motions to Dismiss Medtech's breach of contract claim based on their respective General Releases (id.); (8) grant Defendants' Motions to Dismiss Medtech's civil conspiracy claim (id. 812); (9) grant DenTek's Motion to Dismiss Medtech's claim for tortious interference with contractual relations (id. 814); (10) grant Duane's Motion to Dismiss Medtech's tortious interference with contractual relations claim (id. 814-15); (11) grant Defendants' Motions to Dismiss Medtech's claims for tortious interference with advantageous business relationship/economic advantage (id. 816); (12) deny DenTek's Motion to Dismiss Medtech's claims for unjust enrichment and unfair competition (id. 818); and (13) deny DenTek's Motion to Compel Medtech to disclose the precise trade secrets allegedly misappropriated until Medtech has had the opportunity to conduct limited discovery on the trade secret claim (id. 819-20). All Parties have filed timely and specific objections to the R & R.

II. Discussion

A. Standard of Review

1. Review of Magistrate Judge's Report & Recommendation

A district court reviewing a report and recommendation addressing a dispositive motion "`may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.'" Donahue v. Global Home Loans & Fin., Inc., No. 05-CV-8362, 2007 WL 831816, at *1 (S.D.N.Y. Mar. 15, 2007) (quoting 28 U.S.C. § 636(b)(1)(c)). Under 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b), parties may submit objections to the magistrate judge's report and recommendation. The objections must be "specific" and "written," Fed R.Civ.P. 72(b)(2), and must be made "[w]ithin 10 days after being served with a copy of the recommended disposition." Id.; see also 28 U.S.C. § 636(b)(1)(c).

Where a party submits timely objections to a report and recommendation, as the Parties have here, the district court reviews the parts of the report and recommendation to which the party objected under a de novo standard of review. See 28 U.S.C. § 636(b)(1)(c) ("A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made"); Fed.R.Civ.P. 72(b)(3) ("The district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to."); see also Donahue, 2007 WL 831816, at *1. The district court may adopt those portions of a report to which no objections have been made, as long as those portions are not clearly erroneous. See Pizarro v. Bartlett, 776 F.Supp. 815, 817 (S.D.N.Y.1991).

With regard to a magistrate judge's decision on a non-dispositive matter, such as a discovery dispute between the parties, "[t]he district judge in the case must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law." Fed.R.Civ.P. 72(a). "Pursuant to this highly deferential standard of review, magistrates are afforded broad discretion in resolving discovery disputes." Aurora Loan Servs. v. Posner, 499 F.Supp.2d 475, 477 (S.D.N.Y.2007) (internal quotation marks omitted).

2. Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6)

The Supreme Court has held that "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the `grounds' of his `entitle[ment] to relief' requires 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, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007) (citations omitted and second alteration in original). In Twombly, id. at 1964-69, the Supreme Court also abandoned reliance on the oft-cited line from Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), that, "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." As the Court explained, a literal application of Conley's "no set of facts" rationale is improper because "a wholly conclusory statement of claim would survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some `set of [undisclosed] facts' to support recovery." Twombly, 127 S.Ct. at 1968 (alteration in original). Instead, the Court emphasized that "[f]actual allegations must be enough to raise a right to relief above the speculative level ... [,]" id. at 1965, and "once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint[,]" id. at 1969. Plaintiffs must allege "enough facts to state a claim to relief that is plausible on its face." Id. at 1974. If Plaintiffs "ha[ve] not nudged their claims across the line from conceivable to plausible, [their] complaint must be dismissed." Id.; see also Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir.2007) ("After careful consideration of the Court's opinion and the conflicting signals from it that we have identified, we believe the Court is not requiring a universal standard of heightened fact pleading, but is instead requiring a flexible `plausibility standard,' which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible." (emphasis in original)).

A Rule 12(b)(6) motion to dismiss requires a court to "accept[] all factual allegations in the complaint and draw[] all reasonable inferences in the plaintiff's favor." Ruotolo v. City of New York, 514 F.3d 184, 188 (2d Cir.2008); see also Grandon v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d Cir.1998) (noting court must "accept as true the factual allegations made in the complaint and draw all inferences in favor of the plaintiffs"); Blimpie Int'l, Inc. v. Blimpie of the Keys, 371 F.Supp.2d 469, 470-71 (S.D.N.Y.2005). "In adjudicating a Rule 12(b)(6) motion, a district court must confine its consideration `to facts stated on the face of the complaint, in documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken.'" Glidepath Holding B.V. v. Spherion Corp., ...