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Ragner Technology Corporation v. Berardi

United States District Court, D. New Jersey

December 27, 2018

RAGNER TECHNOLOGY CORP. and TRISTAR PRODUCTS INC., Plaintiffs,
v.
MICHAEL BERARDI and NATIONAL EXPRESS, INC., Defendants.

          EDWARD P. BAKOS, NOAM J. KRITZER, BAKOS & KRITZER J. STEVEN BRAUGHMAN PAUL, WEISS, RIFKIND, WHARTON & GARRISON, LLP On behalf of Plaintiffs Ragner Technology Corp. and Tristar Products Inc.

          THOMAS R. CURTIN, GEORGE C. JONES, MCELROY, DEUTSCH, MULVANEY & CARPENTER, LLP EDWARD F. MCHALE, BRIAN M. TAILLON, KENNETH W. COHEN, ANDREW D. LOCKTON, MCHALE & SLAVIN, P.A. On behalf of Defendants Michael Berardi and National Express, Inc.

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This is a Walker Process action related to other patent infringement litigation pending in the District of New Jersey. This Opinion addresses Defendant National Express, Inc. (“National Express”) and Michael Berardi's (“Mr. Berardi” and, collectively, “Defendants”) Motion to Dismiss for Failure to State a Claim and Plaintiff Ragner Technology Corporation (“Ragner Technology”) and Tristar Products Inc.'s (“Tristar Products” and, collectively, “Plaintiffs”) Motion for Leave to File a Sur-Reply. For the reasons that follow, the Court will deny both motions, without prejudice.

         BACKGROUND

         Considering this Court has already opined on a motion to dismiss, this Court will rely on the alleged facts stated in its previous Opinions of February 7 and March 22, 2018. As relevant, this Court will note the new allegations made in Plaintiffs' Third Amended Complaint (“TAC”) filed on April 21, 2018 in its analysis of Defendants' Motion to Dismiss. Even though this Court will not generally restate the facts of this case in their entirety, this Court will describe some basic facts and procedural history to provide context for its decision.

         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.

         An agent hired by Ragner Technology informed Defendants that Ragner Technology was seeking to meet with investors. A meeting was scheduled 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, which took place at the home of the Mr. and Mrs. Berardi. Edward Kelly, CEO of Defendant National Express, was also present. Mr. and Mrs. Berardi were introduced as Kelly's producers for his television commercials.

         A 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 ‘776 patent”).

         Blue 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. The parties began to manufacture and sell products based on the patents described, supra.

         Consequently, National Express, in conjunction with others, sued Tristar Products, and others, for patent infringement on some of the patents described supra in October 2012 in the Southern District of Florida. See Blue Gentian LLC, et al. v. Tristar Products, Inc., et al., Civil No. 1:13-cv-01758 (NLH/AMD)(“Blue Gentian”). The case was eventually transferred to the District of New Jersey where Tristar Products filed its first answer and counterclaims in January 2014.

         On May 30, 2014, Plaintiffs filed a complaint in the Southern District of Florida alleging conspiracy to monopolize (in the alternative, attempt to monopolize) (Count I) (the “Walker Process claim”); common law fraud (Count II); and breach of contract (Count III) against Mr. Berardi, Cheryl Berardi (“Mrs. Berardi”), Greg Janson, National Express, and the Estate of Edward Kelly.[1]

         On October 9, 2015, Judge Dimitrouleas issued a sua sponte Order requiring Plaintiffs to show cause why the Southern District of Florida should not transfer the matter to the District of New Jersey. Upon full briefing, Judge Dimitrouleas transferred this action to the District of New Jersey, where it was first assigned to Kevin McNulty, U.S.D.J. A Second Amended Complaint (“SAC”) was filed on April 29, 2016.[2]

         Motions to dismiss were filed by all Defendants, with those by Mr. and Mrs. Berardi specifically addressing whether the District of New Jersey could properly assert personal jurisdiction over them. The case was reassigned to the undersigned in December 2016. Shortly thereafter, this Court issued an Order to Show Cause why this case should not be stayed, a hearing was held, and another Order was filed requesting the parties to specifically address why this case should be stayed pending decision in Blue Gentian or the hearing before the Patent Trial and Appeal Board (“PTAB”) on the ‘076 patent. This Court lifted the stay in May 2017.

         Simultaneously, in January 2017, Tristar Products, among others, moved before this Court - in the Blue Gentian matter -to consolidate all pending related matters in this District. On April 11, 2017, this Court denied that motion on grounds that consolidation would lead to one unmanageable case that would be less, rather than more, efficient than trying the cases separately.

         On March 22, 2018, this Court filed an Opinion and Order dismissing Mrs. Berardi - from this case - for lack of subject matter jurisdiction and dismissed the SAC, granting leave for Plaintiffs to amend. Within this Opinion, the Court specifically requested that the parties address whether the Walker Process claim should be considered a compulsory counterclaim that should have been filed in the Blue Gentian matter. Plaintiffs filed the TAC on April 21, 2018, again asserting the same Walker Process and Florida common law claims.

         On May 21, 2018, Defendants filed the instant motion to dismiss. Defendants' Motion to Dismiss was fully briefed by both parties. After full briefing, Plaintiffs filed a Motion for Leave to File a Sur-Reply on July 10, 2018. It appears no opposition was filed, but Defendants filed a Notice of Supplemental Authority and Plaintiffs responded in October 2018. Accordingly, the motions are fully briefed and ripe for adjudication.

         A. Subject Matter Jurisdiction

         This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1337.

         B. Motion to ...


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