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Auge v. Stryker Corporation

United States District Court, D. New Mexico

January 8, 2019

WAYNE KENNETH AUGE, Plaintiff,
v.
STRYKER CORPORATION, and HOWMEDICA OSTEONICS CORP., Defendants.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court upon Defendant Stryker's Motion For Reconsideration and Plaintiff's Motion for Leave to File a Surreply. (Docs. 211, 217). Defendant seeks reconsideration of the Court's partial summary judgment ruling, entered May 11, 2018. (Docs. 207, 208). Having considered the Motions, the summary judgment record, and applicable law, the Court will grant leave to file a surreply but decline to reconsider its ruling.

         I. Background[1]

         Plaintiff is an orthopedic surgeon who developed devices and techniques for use in surgery. (Doc. 179) at 3; (Doc. 186) at 16. Between 2000 and 2007, he entered into a series of Confidentiality Agreements with medical device manufacturer Stryker (individually, Defendant). (Doc. 178-3) at 1; (Doc. 179) at 3-4; (Doc. 186) at 16. The parties agreed “to begin discussions [about] a possible business relationship” relating to Plaintiff's flexible drill system technologies. Id. In 2009, Defendant purchased certain intellectual property pursuant to a Royalty Agreement. (Doc. 178-5); (Doc. 186-1) at 3.

         Over the next few years, Defendant paid royalties as agreed on the TwinLoop FLEX device. (Doc. 186) at 20. Defendant then developed three new devices, which constitute Improvements to the confidential flexible drill technology disclosed pursuant to the Confidentiality Agreements. (Doc. 186-1) at 7; (Doc. 178-1) at 6. The parties tried to negotiate a royalty agreement with respect to the new devices, but the informal discussions failed. (Doc. 186-1) at 6, 48-58.

         On May 12, 2016, Plaintiff filed his First Amended Complaint for Breach of Contract (Complaint). (Doc. 34). In Count I, he alleges he owns the new devices and any profits therefrom pursuant to the terms of the Confidentiality Agreements. (Doc. 34) at 8-9; (Doc. 186-1) at 6-7. Count I alternatively alleges the Royalty Agreement entitles Plaintiff to royalties on the new devices. Id. The Complaint also raises various state law claims based on the alleged misuse of Plaintiff's intellectual property (Counts II-VII). (Doc. 34) at 10-14.

         By two separate motions, Defendant moved for summary judgment on all counts in the Complaint. (Docs. 178 and 179). The first motion addressed Plaintiff's claims for breach of the Confidentiality Agreements (Count I), breach of the Royalty Agreement (Count I), and breach of the obligation of good faith and fair dealing (Count II). (Doc. 178). The second summary judgment motion addressed Plaintiff's remaining “Non-Contract Claims, ” including unjust enrichment (Count VII). (Doc. 179 at 1, 25). On May 11, 2018, the Court entered partial summary judgment in favor of Defendant. (Docs. 207, 208). The Court determined the Royalty Agreement superseded the Confidentiality Agreements with respect to Plaintiff's flexible drill technology. (Doc. 207) at 11. Hence, Plaintiff's claim alleging breach of the Confidentiality Agreements was dismissed. With respect to the remainder of Count I, however, Defendants failed to establish that the Royalty Agreement forecloses royalties on the new devices. Id. at 12. The Court therefore declined to grant summary judgment on Plaintiff's remaining contract claims. Id.

         Defendant's second motion on the “Non-Contract Claims” (Counts III-VII) also yielded mixed results. The Court dismissed Plaintiff's claims for common law unfair competition (Count III); violation of New Mexico's Unfair Trade Practices Act (Count IV); and misappropriation of trade secrets (Count V). (Docs. 207) at 13-16. However, the Court denied summary judgment with respect to Counts VI (quantum meruit) and Count VII (unjust enrichment). Id. The ruling states, in relevant part:

The[]equitable remedies [of quantum meruit and unjust enrichment] typically “may only be invoked in the absence of an express contract or when grossly inequitable circumstances require it.” Arena Resources, Inc. v. Obo, Inc., 2010-NMCA-061, ¶ 16, 238 P.3d 357. Grossly inequitable circumstances include “fraud, real hardship, oppression, mistake, unconscionable results, and the other grounds of righteousness, justice and morality.” Id. The Court cannot determine if the circumstances here are inequitable, and the parties' contract rights have yet to be defined. Therefore, the summary judgment motion will be denied with respect to Plaintiff's claims for unjust enrichment and quantum meruit.

(Doc. 207) at 14.

         The instant Motion to Reconsider challenges the unjust enrichment ruling (Count VII). (Doc. 211). Defendant contends the Court should have applied New Jersey unjust enrichment law. Alternatively, Defendant contends the claim should be dismissed under New Mexico law. Plaintiff filed a response to the Motion, Defendant filed a reply, and Plaintiff sought leave to file a surreply. (Docs. 212, 213, and 217). Because the latter request is unopposed, the Court will grant the motion (Doc. 217) and consider the surreply pursuant to D.N.M. LR-Civ 7.1(b) and 7.4(b).

         II. Discussion

         Defendant moves for reconsideration under Fed.R.Civ.P. 54(b) (interlocutory orders) and 59(e) (final orders). The parties agree, and the case law confirms, that the same general standard applies under both rules. See Ankeney v. Zavaras, 2013 WL 1799997, * 3 (10th Cir. 2013); Tomlinson v. Combined Underwriters Life Ins. Co., 684 F.Supp.2d 1296, 1299 (N.D. Okla. 2010); Sump v. Fingerhut, Inc., 208 F.R.D. 324, 326-27 (D. Kan. 2002). Grounds for reconsideration include: “(1) an intervening change in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest injustice.” Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). A motion to reconsider is also “appropriate where the court has misapprehended the facts, a party's position, or the controlling law.” Id.

         Defendant primarily contends the Court erred by applying New Mexico law, rather than New Jersey law, to the unjust enrichment claim (Count VII).[2] Specifically, Defendant argues the Royalty Agreement's choice-of-law provision governs the unjust enrichment claim, as that is the only contract now at issue. Defendant did not urge the Court to apply New Jersey contract principles to Count VII in its summary judgment papers. (Doc. 179) at 25-27. To the contrary, the motion labels Count VII as a “Non-Contract Claim, ” and cites New Mexico unjust enrichment law in support of dismissal. Id. at 1, 25-27. It is well-established that a motion to reconsider cannot be based on new “arguments that could have been raised in prior briefing.” Servants of Paraclete, 204 F.3d at 1012.

         Moreover, even if the Court considered Defendant's new argument, New Jersey law does not mandate reconsideration. New Jersey law prohibits a recovery for both unjust enrichment and breach of contract. See generally Winslow v. Corp. Express, Inc.,364 N.J.Super. 128');">364 N.J.Super. 128, 143, 834 A.2d 1037 (N.J. App. Div. 2003). However, plaintiffs are expressly permitted to present the two alternative theories at trial. See Caputo v. Nice-Pak Prod., Inc., 300 N.J.Super. 498, 505, 693 A.2d 494, 497 (N.J. App. Div. 1997) (allowing plaintiff to present alternative theories and noting, “if the jury found that there was no valid contract, the jury could then consider whether plaintiff nonetheless might recover for unjust enrichment”). The Court is therefore not required to dismiss the ...


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