Stc.Unm v. Quest Diagnostics Inc.
Decision Date | 07 March 2018 |
Docket Number | CIV 17-1123 MV/KBM |
Parties | STC.UNM, Plaintiff, v. QUEST DIAGNOSTICS INCORPORATED and QUEST DIAGNOSTICS CLINICAL LABORATORIES. INC., Defendants. |
Court | U.S. District Court — District of New Mexico |
THIS MATTER is before the Court on the presiding judge's Order of Reference (Doc. 37) referring to me Plaintiff STC.UNM's Motion for Remand (Doc. 12) with instructions "to conduct hearings, if warranted, including evidentiary hearings, and to perform any legal analysis required to recommend to the District Court an ultimate disposition." In response to the motion seeking remand, Defendants ("Quest") have filed an opposed Motion for Limited Discovery (Doc. 17). Specifically, Defendants contend that they need discovery "limited to the issues of establishing that STC.UNM is not entitled to either common law or Eleventh Amendment sovereign immunity (and/or has waived any claim to such immunity)." Doc. 17 at 1. They further assert that such discovery will "aid Quest" in responding to Plaintiff's not yet fully briefed motion to dismiss Defendants' counterclaims. Id.
Because the request for limited discovery arises in the context of the motion seeking remand, this Court assumes that the referral order also contemplates a decision on the related discovery issue. Having reviewed the submissions of the parties and the relevant authorities, the Court finds that the motion for discovery, as limited herein, is well taken for the reasons set forth below.
Plaintiff STC.UNM filed this action in New Mexico State District Court, Second Judicial District Court in Bernalillo County, and asserted contractual claims against Defendants ("Quest") based on a 2006 License Agreement. Specifically, the Complaint alleges that Quest failed in its contractual duties to keep and produce accurate records relating to payment obligations pursuant to the license and to permit an audit of those records, upon Plaintiff's request. Quest then removed the action to federal court asserting both federal question and diversity subject matter jurisdiction. Moreover, Quest has since filed declaratory judgment counterclaims alleging patent invalidity and non-infringement.
At issue on both of the referred motions is Plaintiff's entitlement to Eleventh Amendment immunity. "The Eleventh Amendment is a jurisdictional bar that precludes unconsented suits in federal court against a state and arms of the state." Peterson v. Martinez, 707 F.3d 1197, 1205 (10th Cir. 2013) (quoting Wagoner County Rural Water Dist. No. 2 v. Grand River Dam Authority, 577 F.3d 1255, 1258 (10th Cir.2009)). Here, Plaintiff STC.UNM has asserted such immunity from the inception of this suit. In its Complaint filed in state district court, Plaintiff expressly alleges, "UNM and STC are arms of the State of New Mexico entitled to common law, Eleventh Amendment, and statutory sovereign immunity." Doc. 1-1 ¶ 9. The Complaint further indicates that Plaintiff "expressly reserves, and does not waive, its sovereign immunity to any non-compulsory counterclaims, federal proceedings, or administrative actions by filing this contract- based state court action. Id. at ¶ 12. Plaintiff now again asserts this claim to immunity in both its Motion to Dismiss (Doc. 10), filed December 7, 2017, and its Motion to Remand (Doc. 12), filed the following day.
The Tenth Circuit has identified "four primary factors" in evaluating whether an entity qualifies as an "arm of the state."
Doc. 35 at 1. Quest has identified some information concerning "the independence of STC and its Board of Directors from the University...
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