Ragner Tech. Corp. v. Berardi

287 F.Supp.3d 541

RAGNER TECHNOLOGY CORP. and Tristar Products Inc., Plaintiffs,

v.Michael BERARDI, Cheryl Berardi, Greg Janson, National Express, Inc., and Estate of Edward Kelley, Defendants.

No. 1:15–cv–7752 (NLH/AMD)

United States District Court, D. New Jersey.

Signed February 7, 2018

EDWARD P. BAKOS, NOAM J. KRITZER, BAKOS & KRITZER, 147 COLUMBIA TURNPIKE, SUITE 102, FLORHAM PARK, NEW JERSEY 07932, On behalf of Plaintiffs

THOMAS R. CURTIN, GEORGE C. JONES, GRAHAM CURTIN, 4 HEADQUARTERS PLAZA, P.O. BOX 1991, MORRISTOWN, NEW JERSEY 07962–1991, On behalf of Defendants

HILLMAN, District Judge

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 and Cheryl Berardi's Motion to Dismiss for Lack of Personal Jurisdiction, Improper Venue, and Failure to State a Claim.

For the reasons that follow, this Court finds Plaintiffs' Second Amended Complaint has not sufficiently pleaded that this Court has personal jurisdiction over Defendant Cheryl Berardi. The Court is inclined to dismiss Mrs. Berardi as a party defendant and allow this case to otherwise proceed in the District of New Jersey. The Court will allow supplemental briefing from the parties regarding how this case should proceed before issuing its final decision.

I.

The following facts come from Plaintiffs' April 29, 2016 Second Amended Complaint.¹ 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.

In May 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.

Janson 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 commercials.²

At the 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.

After 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.

Ragner 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.

During 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.

The 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 Taiwan.

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.

Plaintiffs filed their initial complaint on May 30, 2014 in the United States District Court for the Southern District of Florida. This 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 by the Honorable William P. Dimitrouleas, U.S.D.J. 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.

Plaintiffs' 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).

II.

This Court begins by considering the Berardi Defendants' argument that this Court lacks personal jurisdiction over them. As this case was transferred from the Southern District of Florida, the Court first considers any decisions made by that court with regard to personal jurisdiction.

The "law of the case" doctrine "posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 815–16, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). This "doctrine applies as much to the decisions of a coordinate court in the same case as to a court's own decisions." Id. at 816, 108 S.Ct. 2166. "Federal courts routinely apply law-of-the-case principles to transfer decisions of coordinate courts." Id."Indeed, the policies supporting the doctrine apply with even greater force to transfer decisions than to decisions of substantive law; transferee courts that feel entirely free to revisit transfer decisions of a coordinate court threaten to send litigants into a vicious circle of litigation." Id.

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 stated, in pertinent part:

The Court concludes that it would serve the interest of justice for this case to be transferred to the District of New Jersey, as the claims in this action may be affected by, and are intricately related to, several pending actions in the District of New Jersey involving the same set of patents and related patents for expandable and contractible garden hose that are at issue in the instant controversy. Two other related actions filed in the Southern District of Florida have been transferred to the District of New Jersey. It is likely that there could be inconsistent rulings among the various federal district courts regarding the patents at issue and the conduct by which the patent-holders obtained those patents.

Plaintiffs Ragner Technology Corporation, and Tristar Products, Inc. consent to transfer on the grounds that the District of New Jersey is an appropriate venue pursuant to 28 U.S.C. § 1404(a) and that transfer will serve the interests of justice. Defendant National Express, Inc. consents to the transfer and to jurisdiction for this matter in the District of New Jersey.

Defendants Michael Berardi and Cheryl Berardi do not dispute that transfer pursuant to § 1404(a) would serve the interests of justice; however, they assert that the District of New Jersey does not have personal jurisdiction over both individuals. Plaintiffs acknowledge that Michael Berardi and Cheryl Berardi may attempt to challenge personal jurisdiction in the District of New Jersey.

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