United States District Court, D. New Jersey
RAGNER TECHNOLOGY CORP. and TRISTAR PRODUCTS INC., Plaintiffs,
MICHAEL BERARDI, CHERYL BERARDI, GREG JANSON, NATIONAL EXPRESS, INC., and ESTATE OF EDWARD KELLEY, Defendants.
P. BAKOS NOAM J. KRITZER BAKOS & KRITZER On behalf of
R. CURTIN GEORGE C. JONES GRAHAM CURTIN On behalf of
L. HILLMAN, U.S.D.J.
a Walker Process action related to other patent
infringement litigation pending in the District of New
Jersey. This Opinion addresses two separate but partially
overlapping motions: Defendant National Express, Inc.'s
Motion to Dismiss for Failure to State a Claim and Defendants
Michael Berardi (“Mr. Berardi”) and Cheryl
Berardi (“Mrs. Berardi”) (collectively the
“Berardi Defendants”)'s Motion to Dismiss for
Lack of Personal Jurisdiction, Improper Venue, and Failure to
State a Claim. For the reasons that follow, the Court will
grant both motions. The Court will dismiss the claims against
Defendants without prejudice and with leave to amend. The
Court will dismiss Mrs. Berardi as a party defendant for lack
of personal jurisdiction.
following facts come from Plaintiffs' April 29, 2016
Second Amended Complaint. On September 25, 2005, U.S. Patent No.
6, 948, 527 (“the ‘527 patent”) entitled
“Pressure-Actuated Linearly Retractable and Extendible
Hose” was issued to Gary Dean Ragner and Robert Daniel
deRochemont, Jr. On June 23, 2009, U.S. Patent No. 7, 549,
448 (“the ‘448 patent”) entitled
“Linearly Retractable Pressure Hose” was issued
to Ragner. Ragner Technology is the owner and assignee of all
rights to the ‘527 and ‘448 patents, subject only
to exclusive licenses granted to Tristar Products.
2011, Ragner Technology was introduced to Greg Janson, who
appeared to be interested in investing in Ragner Technology
or bringing Ragner Technology to the attention of potential
investors. Janson was hired as a broker to recruit investors
for Ragner Technology's patented products.
informed Defendants that Ragner Technology was seeking to
meet with investors. Janson scheduled a meeting between
Ragner Technology and Defendants for August 23, 2011. On
August 23, 2011, Ragner, deRochemont, and Margaret Combs, CEO
of Ragner Technology, arrived in Jupiter, Florida for the
scheduled meeting. At that time, they learned they were at
the home of the Berardi Defendants. Also at the meeting was
Edward Kelly, CEO of Defendant National Express. Janson and
Vince Simonelli, a business broker, were also present at the
meeting. The Berardi Defendants were introduced as
Kelly's producers for his television
start of the meeting, Ragner Technology made clear it was
seeking investors and not licensing opportunities. Prior to
disclosing any confidential information, Combs informed the
Berardi Defendants and Kelly that non-disclosure agreements
had not been prepared because they had been unaware of whom
they were meeting with. Nonetheless, Combs insisted on a non-
disclosure agreement before commencing the meeting. The
Berardi Defendants and Kelly verbally agreed to terms of
confidentiality and non-disclosure for the meeting. They also
agreed to execute written non-disclosure agreements to be
sent by Combs following the meeting.
the oral agreement, Ragner Technology “disclosed
information relating to Ragner Technology, the scope of its
patents, product specifications, and target market of the
Microhose product.” They further disclosed
specific engineering diagrams, ideas, materials of
manufacture, including but not limited to, prior iterations
of prototype hoses and prototype hoses constructed of more
than one layer, more than one material, at least one fabric
layer, various materials of manufacture including but not
limited to, vinyl, nylon, rubber, polyester, and/or
polypropylene, at least one layer with cord reinforcement
including a hose wherein the biasing was performed by elastic
material such as polymers made of thermoplastic polyurethane
to provide retracting force, manufacture know-how, concepts,
etc. related to its prototypes of the Microhose product.
Technology also demonstrated one of the patented prototypes
of the Microhose product. Mr. Berardi was able to use one of
the patented prototypes and saw it expand and retract.
the meeting, National Express articulated its interest in
licensing the patented technology and an intent for the
product to be manufactured in Taiwan. Ragner Technology
reiterated its request was solely for investors, but also
conveyed its hesitancy to use a foreign manufacturer. After
reassuring Ragner Technology of the capabilities of its
foreign manufacturing contact, Kelly requested permission to
contact the foreign manufacturer to address its ability to
manufacture the product using the patented technology,
subject to the terms of the non-disclosure agreement. Ragner
Technology agreed to that limited disclosure. Kelly indicated
he would contact the manufacturer as discussed.
morning following the meeting, August 24, 2011, Combs
prepared the non-disclosure agreements, all dated August 23,
2011. The non-disclosure agreements were never executed by
Defendants. Ragner Technology was similarly never contacted
regarding Kelly's communications with the manufacturer in
little over two months later, on November 4, 2011, Mr.
Berardi filed a patent application entitled “Expandable
and contractible hose, ” which Plaintiffs allege
“claim[ed] novel features of the prototypes of the
Microhose product demonstrated by Ragner Technology at the
August 23, 2011 meeting.” Mr. Berardi obtained U.S.
Patent No. 8, 291, 941 (“the ‘941 patent”),
entitled “Expandable and contractible hose, ”
U.S. Patent No. 8, 291, 942 (“the ‘942
patent”) entitled “Expandable hose assembly,
” and U.S. Patent No. 8, 479, 776 (“the
Gentian, LLC is the owner of all the rights in the
‘941, ‘942, and ‘776 patents. Mr. Berardi
is a managing member of Blue Gentian. Blue Gentian, in turn,
granted National Express the exclusive right under the
‘941, ‘942, and ‘776 patents to market and
sell the expandable hose product.
filed their initial complaint on May 30, 2014 in the United
States District Court for the Southern District of Florida,
which was set before the Honorable William P. Dimitrouleas,
U.S.D.J. On June 11, 2015, the Southern District of Florida
granted Defendants' Motion for Judgment on the Pleadings
and granted leave to file an amended complaint. This Order
was followed by a First Amended Complaint on June 25, 2015.
This matter was then transferred, sua sponte, from the
Southern District of Florida to the District of New Jersey on
October 28, 2015. This case was originally assigned to the
Honorable Kevin McNulty, U.S.D.J. before being reassigned to
the undersigned on December 2, 2016 because of the pendency
of related matters.
April 29, 2016 Second Amended Complaint brings three counts
against Defendants: conspiracy to monopolize (in the
alternative, attempt to monopolize) (Count I); common law
fraud (Count II); and breach of contract (Count III).
Court's Opinion proceeds as follows. The Court first
addresses the arguments made that this Court lacks personal
jurisdiction over the Berardi Defendants and that venue is
improper in the District of New Jersey. The Court then
addresses the different jurisdictions' laws it is
required to apply in considering these motions, of which
there are several. The Court then addresses Count I of the
Second Amended Complaint, asserting conspiracy to monopolize
and, alternatively, attempt to monopolize. This requires
consideration, first, of whether Plaintiffs have antitrust
standing and, second, whether Defendants are immune from
antitrust liability. The antitrust immunity issue requires
consideration of whether there was fraud on the PTO and, if
so, the merits of whether Plaintiffs have a monopolization
claim. As the Court finds it must dismiss Count I, the Court
chooses not to exercise supplemental jurisdiction over
Plaintiffs' state law claims for common law fraud and
breach of contract. Lastly, the Court considers
Plaintiffs' request for leave to amend.
Personal Jurisdiction and Venue
February 7, 2018 Opinion, this Court extensively considered
whether it had personal jurisdiction over the Berardi
Defendants. The Court determined it had personal jurisdiction
over Mr. Berardi but lacked personal jurisdiction over Mrs.
Berardi. The Court asked for supplemental briefing on the
personal jurisdiction issue, which the Court timely received
on March 9, 2018. The Court summarizes its February 7, 2018
personal jurisdiction analysis here, incorporating the input
of the parties from the supplemental briefing before reaching
its ultimate decision.
case was transferred from the Southern District of Florida,
the Court began by considering any decisions made by that
court with regard to personal jurisdiction. In its order
transferring this case to the District of New Jersey, the
Southern District of Florida did not specifically address
whether this Court has personal jurisdiction over Defendants.
Its order found transfer “would serve the interest of
justice . . . as the claims in this action may be affected
by, and are intricately related to, several pending actions
in the District of New Jersey.” The court acknowledged
that, while Plaintiffs and National Express consented to
transfer (and National Express to jurisdiction in the
District of New Jersey), the Berardi Defendants contended
that the District of New Jersey did not have personal
jurisdiction over them. The court concluded:
“Plaintiffs acknowledge that Michael Berardi and Cheryl
Berardi may attempt to challenge personal jurisdiction in the
District of New Jersey. Nonetheless, Plaintiffs are willing
to face that potentiality and request that the Court transfer
the action to the District of New Jersey pursuant to §
that “[a]n action can be brought only where the court
has personal jurisdiction over defendants” and that
“a court does not have authority to transfer a case to
a court that lacks personal jurisdiction, ” Hunt v.
Global Incentive & Meeting Mgmt., No. 09-4921, 2010
WL 3740808, at *8 (D.N.J. Sept. 20, 2010) (citing Sunbelt
Corp. v. Noble Denton & Assocs., Inc., 5 F.3d 28,
31-33 (3d Cir. 1993)), the Court found the Southern District
of Florida necessarily and implicitly concluded that the
District of New Jersey had personal jurisdiction over all
Defendants in determining it was appropriate to transfer the
case to the District of New Jersey. Thus, this Court
concluded that the law of the case was that this Court has
personal jurisdiction over Defendants.
that “[a] district court may reconsider a previous
decision that has become law of the case . . . where the
decision was clearly erroneous and would work a manifest
injustice, ” Alexander v. Frankling Res.,
Inc., Nos. 07-848, 07-1309, 2007 WL 2021787, at *2
(D.N.J. July 9, 2007), the Court visited the issue of
personal jurisdiction solely to determine whether the
decision was clearly erroneous and would work a manifest
concluding that the Berardi Defendants did not waive their
argument that this Court does not have personal jurisdiction,
the Court considered whether the Berardi Defendants
“have certain minimum contacts” with New Jersey
“such that the maintenance of the suit does not offend
‘traditional notions of fair play and substantial
justice.'” Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
Court determined that nearly all of the allegations asserted
in Plaintiffs' Second Amended Complaint regarding Mr.
Berardi's contacts with the forum state relate to his
contacts in his capacity as Managing Member of Blue Gentian
and as an officer of Berardi Productions. Similarly, Mrs.
Berardi's contacts with the forum state relate solely to
her contacts in her capacity as an officer of Berardi
Productions. Accordingly, this Court turned to whether it was
proper for the Court to consider the Berardi Defendants'
contacts with the forum state while acting on behalf of
either Blue Gentian or Berardi Productions. The Court
determined that, if the Second Amended Complaint sufficiently
alleged the Berardi Defendants could be subject to individual
liability, it was proper to consider actions taken by the
Berardi Defendants in their corporate capacities in its
personal jurisdiction analysis to the extent those actions
were done within New Jersey.
Second Amended Complaint alleges Mr. Berardi, “as the
sole managing member of Blue Gentian, ”
“direct[ed] Blue Gentian, LLC to restrain competition
in part in the State of New Jersey by suing competitors
claiming infringement and threatening their customers.”
The complaint specifically pinpoints two 2013 law suits filed
in the District of New Jersey: dockets 13-481 and 13-7099. As
to both Berardi Defendants, the Second Amended Complaint
states the Berardi Defendants direct Berardi Productions to
produce anticompetitive commercials “which air in the
State of New Jersey.” It further states the Berardi
Defendants “write, produce, direct, and edit” the
anticompetitive advertisements that air in New Jersey.
point, the parties' supplemental briefing becomes
relevant. The Court's February 7, 2018 Opinion found the
Second Amended Complaint sufficiently supported personal
jurisdiction over Mr. Berardi based on his contacts through
Blue Gentian. The Court based this decision on the 13-481
action and the 13-7099 action, of which Blue Gentian and
National Express are both Plaintiffs. The Court found the
filing of these actions constituted the minimum contacts
necessary for this Court to assert personal jurisdiction over
Mr. Berardi, finding Mr. Berardi took specific action and
directed the filing of these lawsuits in his capacity as
managing member. The Court found that in using the federal
court system in New Jersey to allegedly conspire or attempt
to monopolize a market with fraudulently obtained patents,
Mr. Berardi purposefully availed himself of the privilege of
conducting activities in the State of New Jersey. Mr. Berardi
was invoking the benefits and protections of the District of
New Jersey, located in the forum state. If such use was
fraudulent or constituted a conspiracy or attempt to
monopolize, Mr. Berardi could reasonably expect to be haled
into court in the state in which he filed the lawsuits.The
Court also found exercising personal jurisdiction over Mr.
Berardi comported with fair play and substantial justice.
supplemental briefing, Defendants informed the Court that the
13-481 action was originally filed in the Southern District
of Florida before it was transferred to the District of New
Jersey on Defendant Telebrands Corp.'s Motion to
Transfer. The Court thus will not base a finding of personal
jurisdiction on the filing of the 13-481 action. However, the
Court finds the filing of the 13-7099 action supports a
finding of personal jurisdiction. Defendants'
supplemental briefing provides as follows on this issue:
The 13-7099 action was filed by Blue Gentian and National
Express in the District of New Jersey, alleging infringement
of U.S. Patent No. 8, 479, 776 (“the ‘776
patent”), and to add a retail defendant to infringement
allegations already pending in the 13-1758 action. The
13-7099 action was filed as, and was identified as, related
to the 13-1758 action that was pending in the district. The
13-1758 action alleged Tristar's infringement of the
‘941, ‘942, and ‘213 patents - the
‘776 patent is a continuation-in-part of those patents.
. . . Because many of the same issues from the 13-7099 action
were already pending in the 13-1758 action, 13-7099 action
needed to be filed in the district where the 13-1758 action
was pending. The 13-1758 action, however, was not directed to
New Jersey by Blue Gentian and Mr. Berardi, but rather by
Defendants Tristar Products, Inc. . . .
Blue Gentian filed the lawsuit that became the 13-1758 action
in the Southern District of Florida on October 23, 2012. . .
. On March 19, 2013, however, Judge Seitz granted
Tristar's Motion and transferred the action to New
Jersey, where it was reassigned to District Judge Hochberg
and Magistrate Judge Shwartz as the 13-1758 action. . . .
The 13-1758 action had been transferred to New Jersey based
on Tristar's motion, and was pending for just over six
(6) months when the 13-7099 action was filed. Because the
issues under 28 U.S.C. § 1404(a) had been litigated and
ruled upon with respect to the 13-1758 action, and because
the 13-7099 action had the same issues for a court to
address, it was not a decision by Blue Gentian and Mr.
Berardi that directed the 13-7099 action to New Jersey, but
plaintiffs abiding by the Florida court's prior ruling.
Having already ruled on the issue relating to where the
infringement issues should be heard, it would have been
improper for Blue Gentian to then file a new action with
substantially the same claims in the Southern District of
Court confirms the following. On November 21, 2013, Blue
Gentian and National Express filed a complaint in the
District of New Jersey, bringing claims for direct patent
infringement and indirect patent infringement against Tristar
Products. This was docketed as the 13-7099 matter. In the
Complaint's Local Civil Rule 11.2 Certification,
13-7099 Complaint stated:
Plaintiffs, by their undersigned counsel, hereby certify
pursuant to L.Civ.R. 11.2 that the matters in controversy are
not the subject of any other action pending in any court or
of any pending arbitration or administrative proceeding, with
the exception of the following:
(1) Telebrands Corp. v. National Express, Inc., et
al., Civil Action No. 12-cv-06671-FSH-JBC;
(2) Blue Gentian, LLC v. Telebrands Corp., Civil
Action No. 13-00481-FSH-JBC;
(3) Blue Gentian, LLC, et al. v. Tristar Prods.,
Inc., Civil Action No. 13-cv-01758-FSH-JBC; and
(4) Blue Gentian, LLC, et al. v. Telebrands
Corp., et al, Civil Action No. 13-cv-04627-FSH-JBC
On November 15, 2013, counsel for the parties participated in
a scheduling and status conference with United States
Magistrate Judge James B. Clark for the above-indicated
related actions. During the conference undersigned advised
the Court of the impending filing of the present Complaint.
Judge Clark specifically instructed undersigned to file
this action as a related case to the actions indicated above,
to facilitate the Court's consolidation thereof for
Court understands Blue Gentian's rationale in filing the
13-7099 action in the District of New Jersey. Plaintiffs'
perception that the same transfer analysis and action would
occur if the 13-7099 action were filed in the Southern
District of Florida is both understandable and logical.
Nonetheless, the Court does not find it shields Mr. Berardi
from personal jurisdiction in New Jersey. The Court sees no
indication from Defendants' briefing that is was required
or instructed, either by this Court or the Southern District
of Florida, to file the 13-7099 action in the District of New
Jersey. Even understanding that Blue Gentian interpreted its
prior interactions with the Southern District of Florida and
the District of New Jersey to indicate that the 13-7099
action “needed to be filed” in New Jersey or
“it would have been improper for Blue Gentian to . . .
file a new action with substantially the same claims [as the
13-1758 action] in the Southern District of Florida, ”
the Court still finds Mr. Berardi, through Blue Gentian,
invoked the benefits and protections of the District of New
Jersey and thus purposefully availed himself of the privilege
of conducting business in New Jersey. The Court thus finds
Mr. Berardi is subject to personal jurisdiction in this
Mrs. Berardi, all parties agreed the claims against her
should be severed and dismissed. As this Court explained in
its February 7, 2018 Opinion, Berardi Productions'
advertisements are insufficient to satisfy the minimum
contacts necessary for this Court to assert personal
jurisdiction over her. As the content disseminated through
Berardi Productions is the only contact Mrs. Berardi is
alleged to have with the forum state, the Court found it
could not assert personal jurisdiction over Mrs. Berardi. The
Court found the Southern District of Florida's implicit
conclusion that this Court has personal jurisdiction over
Mrs. Berardi clearly erroneous. The Court further found
asserting personal jurisdiction over Mrs. Berardi simply to
comply with the law of the case would result in manifest
injustice. It is fundamentally unfair to require a defendant
to litigate a matter in a district in which the defendant
lacks sufficient contacts. Further, the Court found that upon
“conclud[ing] that the prior decision was
‘clearly erroneous, '” this Court is
“oblig[ated] to decline jurisdiction.”
Christianson v. Colt Indus. Operating Corp., 486
U.S. 800, 817 (1988). Accordingly, the Court will dismiss the
claims against Mrs. Berardi without prejudice. The Court will
now consider the merits of the claims against Mr. Berardi and
determined that the Court has subject matter jurisdiction and
personal jurisdiction over the remaining defendants, and that
venue is proper in the District of New Jersey, the Court now
briefly addresses the law it applies in considering the
various issues before it on these motions to dismiss. In
addressing whether Defendants are immune from antitrust
liability, “the requirement that the patent be obtained
through actual fraud upon the PTO . . . is governed by
Federal Circuit law.” Dippin' Dots, Inc. v.
Mosey, 476 F.3d 1337, 1346 (Fed. Cir. 2007) (citing
Nobelpharma AB v. Implant Innovations, Inc., 141
F.3d 1059, 1068 (Fed. Cir. 1998)). The second element,
satisfying “the basic elements of an antitrust
violation, ” is governed “by the regional
circuit's law.” Id. at 1348. This Court
will thus apply relevant circuit law in determining whether
there was an antitrust violation, id., and to all
other questions of federal law. See In re Korean Air
Lines Disaster, 829 F.2d 1171 (D.C. Cir. 1987); see
also In re Donald J. Trump Casino Sec. Litig., 7 F.3d
357, 368 n.8 (3d Cir. 1993). This Court will apply Third
Circuit law, not Eleventh Circuit law. See Desiano v.
Warner-Lambert & Co., 467 F.3d 85, 91 (2d Cir. 2006)
(“[E]ven in the transfer context, a court of appeals
must develop its own circuit law on federal questions; it
cannot mechanically adopt the reasoning and conclusions of
its sister circuits . . . .”); accord Szulik v.
Tagliaferri, 966 F.Supp.2d 339, 361 n.16 (S.D.N.Y.
2013); In re Gawker Media LLC, 571 B.R. 612, 626-27
(S.D.N.Y. Bankr. 2017) (“Second Circuit law governs the
interpretations of federal law even when the case is
transferred from a court sitting in another
Court applies Florida law to the state law claims.
“Van Dusen v. Barrack, established that when a
civil action is transferred from one district court to
another pursuant to § 1404(a) on motion of the
defendant, the transferee forum must apply the law of the
initial forum.” Amica Mut. Ins. Co. v. Fogel,
656 F.3d 167, 171 (3d Cir. 2011) (citing Van Dusen v.
Barrack, 376 U.S. 612, 639 (1964)). “Ferens v.
John Deere Co. . . . makes plain that the Van
Dusen rule applies to sua sponte transfers . .
. .” Id.
Standard of Review
considering a motion to dismiss a complaint for failure to
state a claim upon which relief can be granted pursuant to
Federal Rule of Civil Procedure 12(b)(6), a court must accept
all well-pleaded allegations in the complaint as true and
view them in the light most favorable to the plaintiff.
Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005).
It is well settled that a pleading is sufficient if it
contains “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
the liberal federal pleading rules, it is not necessary to
plead evidence, and it is not necessary to plead all the
facts that serve as a basis for the claim. Bogosian v.
Gulf Oil Corp., 562 F.2d 434, 446 (3d Cir. 1977).
However, “the Federal Rules of Civil Procedure . . . do
require that the pleadings ‘give the defendant fair
notice of what the plaintiff's claim is and the grounds
upon which it rests.'” ...