Koresko v. Nationwide Life, Insurance

403 F. Supp. 2d 394, 2005 U.S. Dist. LEXIS 31575, 2005 WL 3293048
CourtDistrict Court, E.D. Pennsylvania
DecidedDecember 6, 2005
DocketCIV.A.05-3800
StatusPublished
Cited by24 cases

This text of 403 F. Supp. 2d 394 (Koresko v. Nationwide Life, Insurance) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Koresko v. Nationwide Life, Insurance, 403 F. Supp. 2d 394, 2005 U.S. Dist. LEXIS 31575, 2005 WL 3293048 (E.D. Pa. 2005).

Opinion

MEMORANDUM

ROBRENO, District Judge.

Before the Court are plaintiffs’ motion to reassign the case to another Judge of this Court and defendant’s motion to transfer the case to the Southern District of Ohio. For the reasons that follow, the motion to reassign will be denied and the motion to transfer will be granted.

I. BACKGROUND

Plaintiffs, John J. Koresko and Penn-Mont Benefit Services, Inc. (“Penn-Mont”), consistent with state practice, filed a praecipe for writ of summons in the Court of Common Pleas of Montgomery County, Pennsylvania on June 23, 2005 against Defendant, Nationwide Life Insurance Company (“Nationwide”), asserting both state and federal claims. On July 22, 2005, Nationwide removed the case to this Court.

Once in this Court, Koresko and Penn-Mont filed a complaint against Nationwide on September 6, 2005, alleging misappropriation of trade secrets, and breach of agreements. Koresko and Penn-Mont contend that between March 2000 and the present, Koresko developed an alternative methodology for funding a pension plan called the Variable 412(i) Plan (the “Plan”). The Plan was to be marketed and distributed exclusively by Penn-Mont. Koresko and Penn-Mont state that Koresko met with Nationwide at Nationwide’s office in Ohio several times in 2001 and 2002 regarding the Plan, and that in June 2002, Nationwide signed a Confidentiality Agreement regarding the Plan. Koresko *396 and Penn-Mont contend that Nationwide was on written notice that Koresko had filed a business process patent application for the Plan in 2001. 1

Koresko and Penn-Mont allege that, in 2005, they became aware that Nationwide was violating the Confidentiality Agreement by improperly using and disclosing plaintiffs’ trade secrets. In June 2005, Koresko notified Nationwide that he believed Nationwide was violating the Confidentiality Agreement and misappropriating trade secrets in plaintiffs patent application, and, after an email exchange between the parties, sent a cease-and-desist demand on June 15, 2005. The cease-and-desist demand stated as follows:

I would like your people to come to my offices for a meeting on or before June 30, prepared and authorized to agree to the license fees. The initial license fee will be at least $1.5 million, if we decide to honor our previous quote, and there will be an ongoing fee based upon the percentage of sales.

The letter also stated that Koresko was prepared to seek injunctive relief if Nationwide did not comply, and that “[o]ur complaint is substantially complete.” Nationwide did not meet with Koresko, but instead filed suit in the Southern District of Ohio on June 22, 2005, seeking a declaratory judgment that the information in the patent application filed by Koresko is not protectable as a trade secret, and that Nationwide has not misappropriated or infringed Penn-Mont’s or Koresko’s trade secrets or confidential information. 2

Koresko and Penn-Mont seek compensatory and punitive damages, and attorneys’ fees and costs. Koresko and Penn-Mont also seek a preliminary injunction requiring Nationwide to cease and desist using Koresko’s and Penn-Mont’s intellectual property, to cease and desist using variable contracts in a defined benefit plan, and to return their materials.

On September 26, 2005, Nationwide filed an answer to the complaint with affirmative defenses and brought a counterclaim, requesting a declaratory judgment that: (1) the information disclosed in Koresko’s patent application is not protectable as a trade secret because it is publicly available; (2) Nationwide has not misappropriated or infringed any of Koresko’s and Penn-Mont’s trade secrets or confidential information; and (3) that Nationwide has not breached the Confidentiality Agreement. Nationwide also requests attorneys’ fees and costs. Koresko and Penn-Mont answered the Counterclaim Complaint on October 20, 2005, and included affirmative defenses.

On September 26, 2005, Nationwide filed a motion to transfer the action to the Southern District of Ohio, or to dismiss pr stay the action in favor of the action currently pending in the Southern District of Ohio. On October 19, 2005, Koresko and Penn-Mont filed a motion to reassign the case to Judge Bruce W. Kauffman in the Eastern District of Pennsylvania. Koresko and Penn-Mont allege Judge Kauffman has pending before him an earlier related matter.

II. DISCUSSION

A. Motion to Reassign

Koresko and Penn-Mont request the Court grant their motion for reassign *397 ment, and have the Clerk of Court refer the matter to the Chief Judge for reassignment to Judge Bruce W. Kauffman as related to a case currently before Judge Kauffman, pursuant to Local Rule 40.1(c)(2). Local Rule 40.1(b)(3)(A) defines civil cases as related when a case filed involves: (1) property included in another suit; (2) the same issue of fact or grows out of the same transaction as another suit; or (3) the validity or infringement of a patent involved in another suit. Local Rule 40.1(c)(2) provides for the reassignment of related cases if the relationship between a case and a previously filed case is not known until the case is assigned. The Rule states:

If the fact of relationship does not become known until after the case is assigned, the judge receiving the later ease may refer the case to the Chief Judge for reassignment to the judge to whom the earlier related case is assigned. If the Chief Judge determines that the cases are related, the Chief Judge shall transfer the later case to the judge to whom the earlier case is assigned; otherwise, the Chief Judge shall send the later case back to the judge to whom it was originally assigned.

Local R. Civ. P. 40.1(c)(2).

The Rule envisions a two-step process. One, the judge assigned to the later case determines in the first instance whether the case is “related.” If the judge assigned to the later case finds it is not related, the judge will deny the motion to reassign, and that ends the matter. If, on the other hand, the judge assigned to the later case finds that the case is related, the judge shall refer the case to the Chief Judge for possible reassignment. Two, if the Chief Judge concurs with the assessment of relatedness by the judge assigned to the later case, the Chief Judge shall reassign the later case to the judge presiding over the earlier case. 3 If the Chief Judge disagrees with the assessment that the cases are related, the case shall be returned to the judge to whom the later case was assigned. In other words, while the judge assigned to the later case may deny reassignment on his or her own, reassignment from the later assigned judge to the earlier assigned judge can only be executed by the Chief Judge. This procedure protects the integrity of the court’s random assignment system. See Local Rule 40.1(a),(b).

Koresko and Penn-Mont contend that the case should be reassigned because of its relation to Koresko, et al. v. Bleiweis, et al., Civ. A. No.

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Bluebook (online)
403 F. Supp. 2d 394, 2005 U.S. Dist. LEXIS 31575, 2005 WL 3293048, Counsel Stack Legal Research, https://law.counselstack.com/opinion/koresko-v-nationwide-life-insurance-paed-2005.