Ventana Med. Sys. Inc v. St. Paul Fire & Marine Ins. Co., CIV 09-102-TUC-CKJ (CRP).

• Decision Date: 29 April 2010
• Docket Number: No. CIV 09-102-TUC-CKJ (CRP).,CIV 09-102-TUC-CKJ (CRP).
• Parties: VENTANA MEDICAL SYSTEMS, INC., Plaintiff,v.ST. PAUL FIRE & MARINE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Arizona

709 F.Supp.2d 744

VENTANA MEDICAL SYSTEMS, INC., Plaintiff,v.ST. PAUL FIRE & MARINE INSURANCE COMPANY, Defendant.

No. CIV 09-102-TUC-CKJ (CRP).

United States District Court D. Arizona.

April 29, 2010.

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COPYRIGHT MATERIAL OMITTED

Craig H. Kaufman, Quarles & Brady LLP, Tucson, AZ, David A. Gauntlett, Gauntlett & Associates, Irvine, CA, for Plaintiff.

John Charles Hendricks, Thomas Harold Crouch, Meagher & Geer PLLP, Scottsdale, AZ, for Defendant.

ORDER

CINDY K. JORGENSON, District Judge.

On January 13, 2010, Magistrate Judge Charles R. Pyle issued a Report and Recommendation [Doc. # 78] in which he recommended that this Court deny the Motion for Partial Summary Judgment [Doc. # 11] filed by Plaintiff Ventana Medical Systems, Inc. (“Ventana”), grant the Motion for Summary Judgment [Doc. # 37] filed by Defendant St. Paul Fire & Marine Insurance Company (“St. Paul”), deny Ventana's Requests for Judicial Notice [Doc. # s and 63], deny St. Paul's Motion for Discovery under Fed.R.Civ.P. 56(f) as moot [Doc. # 37]; and grant, after St. Paul timely complies with L.R.Civ. 54.2, St. Paul's request for attorney fees under A.R.S. § 12-341.0 [Doc. # 37]. The magistrate judge advised the parties that any objections were to be filed and served within days after being served with a copy of the Report and Recommendation. Ventana has filed an Objection and St. Paul has filed a Response. Ventana has also filed a Motion, and a Revised Motion, for Leave to File Reply Brief [Doc. # s and 84].

I. Motions for Leave to File Reply Brief

Ventana requests leave to file a reply brief. Ventana asserts that Defendant's response cites two new cases not argued before the magistrate judge-Ventana asserts that Defendant is raising new arguments in an attempt to avoid inconsistencies with the Report and Recommendation. St. Paul asserts, however, that no legal authority gives Ventana the right to file a reply and that no good cause exists for allowing Ventana to file yet another brief. St. Paul also asserts that Ventana's stated reason for seeking leave to file a Reply is pretextual for wanting to again make the same arguments that it has already made in other filings. Rather, St. Paul asserts that no legal authority prohibits St. Paul from citing additional support for the Report and Recommendation.

Although Fed.R.Civ.P. 72(b)(2) provides for a response to objections to a Report and Recommendation, the rule does not provide for a reply. No explicit provision is made for reply papers. Indeed, another court has stated:

While the petitioner has requested that he be allowed to file a reply to the respondent's response to his objections, the Court will not permit him to do so because Fed.R.Civ.P. 72(b)(2) does not authorize the filing of such a reply see Cannon Partners, Ltd. v. Cape Cod Biolab Corp., 225 F.R.D. 247, 250 (N.D.Cal.2003); Bradberry v. Schriro, 2009 WL 971298, at *1 (D.Ariz. April 8, 2009), and because the petitioner's proposed reply does not add anything significant to the several memoranda the petitioner has already filed.

Hess v. Ryan, 651 F.Supp.2d 1004, 1009 n. 1 (D.Ariz.2009). As in Hess, Ventana's proposed reply does not add anything significant to the extensive briefing of issues in this case. Moreover, the Court does not find it appropriate to consider additional evidence, which may provide a basis to consider additional argument. See e.g.,

Pan Am. World Airways, Inc. v. International Bhd. of Teamsters, 894 F.2d 36, n. 3 (2nd Cir.1990). The Court will deny the requests.

II. Report and Recommendation-Preliminary Issues

This Court “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate.” 28 U.S.C. § 636(b)(1). Further, under 28 U.S.C. § 636(b)(1), if a party makes a timely objection to a magistrate judge's recommendation, then this Court is required to “make a de novo determination of those portions of the [report and recommendation] to which objection is made.” The statute does not “require [ ] some lesser review by [this Court] when no objections are filed.” Thomas v. Arn, 474 U.S. 140, 149-50, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985). Rather, this Court is not required to conduct “any review at all ... of any issue that is not the subject of an objection.” Id. at 149, 106 S.Ct. 466.

Indeed, the Ninth Circuit has recognized that a district court is not required to review a magistrate judge's report and recommendation where no objections have been filed. See United States v. Reyna-Tapia, 328 F.3d 1114 (9th Cir.2003) (discussing the standard of review employed by the district court when reviewing a report and recommendation to which no objections were made); see also Schmidt v. Johnstone, 263 F.Supp.2d 1219, 1226 (D.Ariz.2003) (reading the Ninth Circuit's decision in Reyna-Tapia as adopting the view that district courts are not required to review “any issue that is not the subject of an objection.”). In other words, if there is no objection to a magistrate judge's recommendation, then this Court may accept the recommendation without review. See e.g., Johnstone, 263 F.Supp.2d at 1226 (accepting, without review, a magistrate judge's recommendation to which no objection was filed).

In this case, Ventana has objected to specific portions of the Report and Recommendation. As to those portions not objected to, the Court has reviewed the Report and Recommendation and finds that those portions are well-taken. The Court will adopt those portions of the Report and Recommendation. ¹ Additionally, the Court specifically incorporates the factual and procedural background as set forth by the magistrate judge and, therefore, will not repeat it here.

Additional filings have been made since the issuance of the Report and Recommendation. On January 25, 2010, St. Paul filed a Motion Regarding Attorney Fees and Costs [Doc. # 79]. Further, on February 19, 2010, Ventana filed a Motion for Leave to File a Reply Brief [Doc. # 82]; on February 22, 2010, Ventana filed a Revised Motion for Leave to File a Reply Brief [Doc. # 84]. On March 5, 2010, March 24, 2010, and April 9, 2010, Ventana filed Notices of Supplemental Authority. On March 29, 2010, and April 14, 2010, St. Paul filed Responses to the Notices of Supplemental Authority.

III. Notice of Supplemental Authority

Ventana's Notices of Supplemental Authority ask the Court to consider Infor Global Solutions (Michigan), Inc. v. St. Paul Fire & Marine Ins. Co., 686 F.Supp.2d 1005 (N.D.Cal.2010), American Best Food, Inc. v. Alea London, Ltd., 168 Wash.2d 398, 229 P.3d 693 (Wash.2010), and Hyundai Motor America v. National Union Fire Ins. Co. of Pittsburgh, Pa., 600 F.3d 1092 (9th Cir.2010). However, none of these cases provide controlling precedent as to Arizona law and the Court declines to consider these cases.

IV. Analysis by Magistrate Judge

Ventana asserts that the magistrate judge should have focused on the potential coverage arising out of the facts asserted in the complaint and extrinsic evidence known to St. Paul when it denied coverage rather than improperly focusing on the gravamen of the suit and labels of causes of action. This Court disagrees with Ventana's characterization. Rather, the magistrate judge set forth the history of the prior patent infringement lawsuit with Digene Corporation (“Digene”), see R & R, pp. 8-10, Ventana's request to St. Paul for coverage, see R & R, pp. 10-12, and discussed the parameters of St. Paul's duty in denying coverage, see R & R, pp. 19-24. The magistrate judge also discussed whether the facts constituted a covered claim for disparagement, see R & R, pp. 24-28, and discussed whether the facts constituted a covered claim for an unauthorized use of a slogan, see R & R, pp. 24, 28-30. The Court finds the magistrate judge's analysis was proper.

Ventana also asserts that the magistrate judge's analytic approach was not consistent with analysis of offenses-based coverage. Ventana's Objection, pp. 4-5. It is not entirely clear what type of analysis, rather than an analytic approach, Ventana believes should be utilized. The magistrate judge set forth the standards and applied those standards. Without a more specific objection, the Court merely finds that, generally, the magistrate judge properly evaluated the standards and claims.

V. Whether Fact Allegations Known to St. Paul Compelled a Defense

Ventana asserts that the magistrate judge improperly applied Arizona law by failing to determine whether fact allegations known to St. Paul required St. Paul to provide a defense under the 2001 and 2002 policies.

A. Applicable Insurance Policy

The magistrate judge determined that St. Paul did not have a duty to defend under the 2001 policy. The magistrate judge, therefore, analyzed St. Paul's alleged duty to defend under the 2002 insurance policy.

Ventana asserts, however, that Digene's SAC repeatedly alleges Ventana's “ongoing” misconduct from 2001 onward.² Indeed, Ventana points out that Digene's claim for tortious interference alleges liability due to two agreements that predate the 2002 Beckman Instruments (“Beckman”) acquisition press release.³ Ventana also asserts that the liability arose as of 2001-the SAC asserts liability generally for conduct that arose under both the 2001 and 2002 policies.⁴ Ventana alleges that its March 2, 2001, press release advertised the launch of Ventana's probes.⁵ Ventana also states that Digene's lawyers, in a letter brief and oral argument, argued that Ventana's September 24, 2002, press release attempted to legitimize pre-existing offending products, and that Digene's discovery focused on liability from Ventana's 2001 product launch.

Although Ventana has not objected to the magistrate judge's conclusion that consideration of the DAC, rather than Digene's SAC is appropriate, Ventana has based some of its supporting facts on Digene's SAC. Because comparable language is also included in the DAC, the Court will consider these arguments.

St. Paul disputes...