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Loretta Carr-Stock v. Orthotic Rehabilitation

November 20, 2011


The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court



Plaintiff Loretta Carr-Stock alleges that Defendants Orthotic Rehabilitation Products, Inc. ("Orthotic") intentionally manufactured and sold Wrist/Hand/Finger Orthosis elements in violation of Plaintiff's Patent No. 6,165,148 and breached an exclusive licensing agreement. Plaintiff asserts two causes of action: patent infringement under 35 U.S.C. §§ 271 and 281, and breach of contract under state law.

Presently before this Court is Defendant's Motion to Dismiss Plaintiff's Complaint for improper service of process, lack of personal jurisdiction, and improper venue, pursuant to Rules 12(b)(2), 12(b)(3), 12(b)(4), and 12(b)(5) of the Federal Rules of Civil Procedure. In the alternative, Defendant moves to change venue to the Middle District of Florida, pursuant to 28 U.S.C. § 1404(a). For the following reasons, Defendant's motion is denied.*fn1


A. Facts

The following facts are alleged in the Complaint and are also drawn from declarations filed in support and opposition of Defendant's Rule 12(b)(2) motion. See Langenberg v. Sofair, No. 03 CV 8339, 2006 WL 2628348, at *5 (S.D.N.Y. Sept. 11, 2006) ("[C]courts are authorized to rely on affidavits submitted by the parties in deciding a Rule 12(b)(2) motion to dismiss.").

Plaintiff Loretta Carr-Stock is an individual residing in Clarence, New York. (Complaint ("Comp."), Docket No. 1, ¶ 1.) Defendant Orthotic is a corporation incorporated under the laws of Nevada, with its principal place of business in Tampa, Florida. (Id. ¶ 2.)

Plaintiff is the inventor of the Wrist/Hand/Finger Orthosis. (Id. ¶ 6.) Plaintiff was issued a patent for that invention, Patent No. 6,165148, on December 26, 2000. (Id.) Prior to the issuance of the patent, the parties entered into an agreement on September 13, 1999 for exclusive licensing rights to Plaintiff's patent. (Id. ¶ 12.) This agreement permitted Defendant to sell products covered by the patent, and, in exchange, Orthotic agreed to pay Carr-Stock royalties equal to 5% of the gross selling price. (Id.¶ 13.)

In September 2009, Orthotic ceased paying royalties. After notifying Orthotic that it considered Orthotic to be in breach of contract, Carr-Stock brought the instant action. (Affidavit of Loretta Carr-Stock ("Carr-Stock Aff."), Docket No. 9, ¶ 9.)

B. Procedural History

Plaintiff commenced this action on January 10, 2011, by filing a complaint in the United States District Court for the Western District of New York. Defendant filed a Motion to Dismiss, or Alternatively, to Transfer, on February 1, 2011. Briefing on the motion concluded on February 28, 2011, at which time this Court took the matter under advisement without oral argument.


A. Motion to Dismiss Standard

When challenged with a motion to dismiss pursuant to Rule 12(b)(2), the plaintiff bears the burden of establishing that the court has personal jurisdiction over the defendant. See In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir. 2003) (per curiam); Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994). If the court relies on pleadings and affidavits to resolve the motion, rather than a full evidentiary hearing, the plaintiff need make only a prima facie showing of personal jurisdiction to carry its burden. See Distefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001); Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999) (citing Marine Midland Bank v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)); Langenberg v. Sofair, No. 03-CV-8339, 2006 WL 2628348, at *2 (S.D.N.Y. Sep. 11, 2006).

In determining whether the plaintiff has made this showing, the court is not obligated to draw "argumentative inferences" in the plaintiff's favor. Robinson, 21 F.3d at 507 (citing Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir. 1992)). But the pleadings and affidavits, and all doubts arising therefrom, are construed in the light most favorable to the plaintiff. See CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986).

B. Defendants' Motion to Dismiss

Plaintiff alleges two causes of action against Defendants. In the first cause of action, brought pursuant to 35 U.S.C. §§271 and 281, Plaintiff alleges that Defendant infringed her patent rights. In the second cause of action, brought pursuant to state law, Plaintiff alleges that Defendant breached its licensing agreement. Defendant argues that Plaintiff's Complaint should be dismissed under Rules 12(b)(2), 12(b)(3), 12(b)(4), and 12(b)(5) for improper service of process, lack of personal jurisdiction and improper venue, or, in the alternative, that this suit should be transferred to the Middle District of Florida pursuant to 28 U.S.C. § 1404(a).

This Court will address each of Defendant's challenges in turn.

1. Insufficiency of Service of Process

Rule 12(b)(5) allows a party to seek dismissal of an action for insufficient service of process. Fed. R. Civ. P. 12(b)(5). Pursuant to Rule 4(h)(1)(B), service may be effected upon a corporation or association "by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or law to receive service of process." In addition, Rule 4(h)(1) provides that service upon a corporation may be made "in the manner prescribed for individuals by subdivision (e)(1)." Rule 4(e)(1), in turn, provides that service may be made "pursuant to the law of the state in which the district court is located, or in which service is effected." New York's service of process rules provide that personal service upon a foreign or domestic corporation may be made "to an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service." N.Y.C.P.L.R. § 311(a) (McKinney 2011).

Defendant seeks dismissal of all claims against it on the ground that Plaintiff did not deliver a summons upon an individual authorized to receive service. Plaintiff responds that it delivered process to Mr. Bob Szczesny, who was a registered agent for service of process.

"Corporations in virtually every state are required to appoint a registered agent upon whom service of process may be made . . . . [t]his we think, evidences a general reasonable belief that the proper service of process upon the agent will be effective service upon the corporation." Barker v. Latham Sparrowbush Assocs., 72 F.3d 246, 254 (2d Cir. 1995). Here, Plaintiff alleges, and Defendant does not dispute that Szczesny is listed as the Registered Agent for Defendant with the Florida Department of State Division of Corporations and is the Official Correspondent with the United States Food and Drug Administration. It is well-settled that "where the process server 'reasonably believed' that the person served was authorized to receive service of process on behalf of defendant, plaintiff is held to have fulfilled the requirements of § 311." Avanti Enters. v. A&T Produce, Inc., No. CV-09-1185 (NGG), 2010 WL 3924771, at *2 (E.D.N.Y. July 21, 2010) (citation omitted). Aside from having delivered process to an agent "authorized by appointment or by law," Defendant has also given every indication that Szczesny was an individual authorized to receive service. Accordingly, this Court finds that Plaintiff has satisfied the requirements of § 311. See Citadel v. Mgmt., Inc. v. Telesis Trust, Inc., 123 F. Supp. 2d 133, 145 (S.D.N.Y. 2000) ("Thus when a process server serves someone who does not have express authorization to accept service for a corporation, service is nonetheless proper under C.P.L.R. § 311 if it is made in a manner which, objectively viewed, is calculated to give the corporation fair notice of the suit." (citations and quotation marks omitted)).

2. Lack of Personal Jurisdiction

"Personal jurisdiction of a federal court over a non-resident defendant is governed by the law of the state in which the court sits -- subject of course, to certain constitutional limits of due process." Robinson, 21 F.3d at 510 (internal citations omitted). To determine personal jurisdiction over a non-domiciliary in a case involving a federal question, the court must engage in a two-step analysis. See Chloe v. Queen Bee of Beverly Hill, LLC, 616 F.3d 158, 163 (2d Cir. 2010) (citing Best Van Lines, Inc. v. Walker, 490 F.3d 239, 243-44 (2d. Cir. 2007)) ("Queen Bee"). The court must first apply the forum state's long-arm statute. Id. If the forum state's long-arm ...

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