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Eye Laser Care Center LLC v. MDTV Medical News Now

June 30, 2009


The opinion of the court was delivered by: Katharine S. Hayden, U.S.D.J.


Here the Court addresses defendant MDTV‟s motion for reconsideration of the portion of its October 31, 2008 opinion (D.E. 314) (hereinafter, the "October 31 opinion") deciding the law applicable to defendants MDTV and Paul Argen‟s counterclaim against plaintiff Stephen Weinstock.

In their reconsideration motion, MDTV and Paul Argen (collectively, "MDTV") seek review of the Court‟s decision that MDTV‟s counterclaims would be governed by California law.

The Court assumes familiarity with the relevant facts.

I. Standard of Review

Under Local Civil Rule 7.1(i), which governs the Court‟s review, the moving party must set forth the factual matters or controlling legal authorities it believes the court overlooked in reaching its initial decision. "Whether to grant a motion for reconsideration is a matter within the Court‟s discretion, but it should only be granted where such facts or legal authority were indeed presented but overlooked." Francis v. Joint Force Headquarters Nat. Guard, No. 05-4882, 2009 WL 90396, *5 (D.N.J. Jan. 12, 2009). Under the Third Circuit‟s standard, the movant for reconsideration must show either an intervening change in the controlling law; the availability of new evidence that was not available when the court rendered the judgment in question; or a need to correct a clear error of law or fact or to prevent manifest injustice. Max's Seafood Café ex rel. Lou-Ann, Inc., v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). To warrant reconsideration, it must be that "dispositive factual matters or controlling decisions of law were overlooked," as "mere disagreement" with the Court should be reserved for the appellate courts. United States v. Compaction Sys. Corp., 88 F.Supp.2d 339, 345 (D.N.J. 1999).

II. The October 31, 2008 Opinion

In its October 31 opinion, the Court concluded that plaintiff Weinstock‟s claims would be decided under Florida law, Cross‟s and Rappaport‟s claims would be decided under Texas law, and Eye Laser Care Center‟s ("ELCC") claims would be decided under California law. The Court erroneously stated that counterclaims existed against ELCC, Rappaport, and Cross, when in fact those counterclaims had earlier been dismissed and only counterclaims against Weinstock remained. As stated in the Court‟s June 19, 2008 Final Pretrial Order, "the only MDTV/Argen counterclaims remaining against plaintiff Weinstock are Count III (Breach of Contract) and Count IV (Breach of Duty of Good Faith and Fair Dealing)." (D.E. 294-2 p. 77.) With respect to the subject of the current reconsideration motion, the October 31 opinion determined that MDTV‟s counterclaims would be decided under California law:

In its September 2003 answer (with counterclaims), MDTV did not invoke any foreign state law on its counterclaims and only on its third-party claim for misappropriation of trade secrets invoked state law-that of California. Plaintiffs are correct that MDTV‟s failure to timely invoke any foreign state‟s law in its counterclaims now bars MDTV from asserting any state law but California‟s as to its counterclaims at this juncture. See Hurtado v. Superior Court, 115 Cal. Rptr. 106 (1974); see also Employer's Ins. of Wasau v. Tri-World Ins. Agency, Inc., No. 95-55187, 1998 U.S. App. LEXIS 969 *7-8 (9th Cir. 1988) ("California‟s conflict of law rules provide that the forum generally should apply its own substantive law unless a party timely invokes the law of a foreign state. Since no party invoked any law other than that of the forum, the district court properly applied California law." (internal citation omitted)). (D.E. 314 (emphasis in original).) On reconsideration, MDTV argues that the Court should have conducted a full choice-of-law analysis rather than finding that MDTV‟s assertion of Florida law after the pleadings stage amounted to its failure to "timely invoke" a foreign state‟s law. MDTV further contends that it did, in fact, assert the applicability of Florida law to its counterclaim against Weinstock several times in the course of the litigation, albeit after the pleadings stage.

III. Discussion

Was MDTV's Invocation of Florida Law Timely?

This action, including MDTV‟s counterclaim against Weinstock, was transferred sua sponte to this Court from the Southern District of California in September 2007. As the case is brought on diversity jurisdiction under 28 U.S.C. § 1332, the Court is required to look to state law as the source of controlling authority. Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). Where, as here, a venue transfer is made pursuant to 28 U.S.C. § 1404, the transferee court must apply the laws of the state in which the transferor court is located. Van Dusen v. Barrack, 376 U.S. 612 (1964); see also Ferens v. John Deere Co., 494 U.S. 516, 527-28 (1990) (extending the Van Dusen rule to all § 1404(a) transfers, whether initiated by plaintiff or defendant). Under the Erie doctrine, the forum state‟s choice of law rules must be applied as part of the transferor state‟s body of law. Klaxon v. Stentor Elec. Co., 313 U.S. 487 (1941). Thus, the Court must look to the laws of the state of California to determine which state‟s substantive law should be applied to these motions. See Employers Ins. v. Tri World Ins. Agency, No. 95-55187, 1998 U.S. App. LEXIS 969 (9th Cir. Jan. 22, 1998) ("In diversity cases, federal courts must follow the conflict of law rules prevailing in the forum state.").

In Hurtado v. Superior Court of Sacramento County, 114 Cal.Rptr. 106, 110 (1974), the California Supreme Court stated that:

[G]enerally speaking the forum will apply its own rule of decision unless a party litigant timely invokes the law of a foreign state. In such event he must demonstrate that the latter rule of decision will further the interest of the foreign state and therefore that ...

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