Massachusetts Biologic Laboratories of the University of Massachusetts v. MedImmune, LLC

871 F. Supp. 2d 29, 2012 U.S. Dist. LEXIS 91103, 2012 WL 2552317
CourtDistrict Court, D. Massachusetts
DecidedJuly 2, 2012
DocketCivil No. 12-cv-10006
StatusPublished
Cited by10 cases

This text of 871 F. Supp. 2d 29 (Massachusetts Biologic Laboratories of the University of Massachusetts v. MedImmune, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Massachusetts Biologic Laboratories of the University of Massachusetts v. MedImmune, LLC, 871 F. Supp. 2d 29, 2012 U.S. Dist. LEXIS 91103, 2012 WL 2552317 (D. Mass. 2012).

Opinion

MEMORANDUM & ORDER

GORTON, District Judge.

Actions to resolve the rights and obligations of the Massachusetts Biologic Laboratories of the University of Massachusetts (“MassBiologics”) and Medlmmune, LLC (“Medlmmune”) under the licensing agreement between the parties are on parallel tracks: one in Maryland state court and the other here in Massachusetts federal court. Pending before the Court is Medlmmune’s motion to stay this case pending resolution of the Maryland action.

I. Background

The Massachusetts Public Health Biologies Laboratories (“MPHBL”) was a public entity established in 1894 by the Massachusetts Board of Health to research, develop and produce childhood vaccines and biologic products for the public good. From 1959 to 1996, the MPHBL was administered by the Massachusetts Health Research Institute (“MHRI”), a private, non-profit entity under contract with the Massachusetts Department of Public Health (“MDPH”). MHRI is now known as Third Sector New England, Inc. (“Third Sector”).

In 1984, scientists George Siber and Jeanne Leszczynski working for MHRI developed technology (“the Technology”) employing naturally occurring immunoglobulin designed to treat and prevent respiratory syncytial virus (“RSV”), a serious respiratory illness affecting children. Five years later, MHRI entered into an agreement (“the RSV License Agreement”) with Molecular Vaccines, Inc. and Pediatric Pharmaceuticals, Inc., the corporate predecessors of Medlmmune, under which MHRI granted those companies an exclusive right and license to the Technology in exchange for ongoing royalty payments on the sales of anti-RSV products developed by those companies.

In 1997, “MassBiologics” was established by the Massachusetts Legislature, M.G.L. 75, § 43, to take the place of the MPHBL,

so as to enable said laboratories to maintain their public purpose, preserve their ability to compete in an increasingly competitive marketplace and maximize their value to the Commonwealth,

1996 Mass. Acts ch. 334, at 1338. MassBiologics became a party to the RSV License Agreement when Medlmmune, Third Sector and MassBiologics entered into an Assignment and Assumption Agreement (“the Assignment Agreement”) under which Third Sector transferred its rights, interests and obligations under the RSV [32]*32License Agreement to MassBiologics. Pursuant to the Assignment Agreement, Medlmmune has paid royalties to MassBiologics, averaging $30 million annually, on sales of anti-RSV products RespiGam® and Synagis®. In 2006, Medlmmune offered to purchase the license outright in exchange for a one-time, lump-sum payment. MassBiologics declined.

In August 2011, Medlmmune filed suit in Maryland state court (“the Maryland action”) seeking a declaratory judgment that its obligation to make royalty payments under the RSV License Agreement had ceased. Medlmmune alleged that MassBiologics had breached the RSV License Agreement because 1) scientists within the UMass system had filed applications for research which Medlmmune claims should have been licensed to Medlmmune and 2) UMass granted a patent license to Novavax, Inc. (“Novavax”) which would purportedly assist Novavax to compete against Medlmmune.

Included as defendants in the Maryland action are MassBiologics and Third Sector, successors-in-interest to signatories of the RSV License Agreement, and the Henry M. Jackson Foundation for the Advancement of Military Medicine, Inc. (“HJF”), a party to a separate licensing agreement concerning similar technology (collectively, “the Maryland defendants”). MassBiologics moved to dismiss the claims for lack of personal jurisdiction and on forum non conveniens grounds. The Maryland court denied the motion, concluding that Maryland’s long-arm statute authorized personal jurisdiction over MassBiologics and that Maryland state court was a convenient forum in which to adjudicate the dispute. Parties have commenced discovery and trial is scheduled for October 1, 2012.

In November 2011, MassBiologics filed suit against Medlmmune in Massachusetts Superior Court for Suffolk County (“the Massachusetts action”). The Complaint recites claims for breach of contract (Count One), breach of the implied covenant of good faith (Count Two), unfair and deceptive trade practices in violation of the Massachusetts Consumer Protection Act, M.G.L. 93A, §§ 2, 11 (Count Three) and declaratory judgment (Count Four). Plaintiff requests relief in the form of 1) actual and treble damages, 2) specific performance of the RSV License Agreement and 3) declaratory judgments that a) the RSV License Agreement is enforceable and has not expired, b) MassBiologics’ obligations thereunder encompass only research and other activities performed by MassBiologics scientists and do not extend to research and other activities performed by UMass faculty and staff and c) in the event Medlmmune ceases to pay royalties due under the RSV License Agreement, Medlmmune will thereby forfeit the right to sell its royalty-bearing products.

Plaintiffs contract and consumer protection claims are premised on allegations that, by rejecting plaintiffs offer to cure, unilaterally terminating the RSV License Agreement and filing the Maryland action, Medlmmune not only breached the RSV License Agreement but also engaged in deceptive trade practices. As MassBiologics sees it, Medlmmune now seeks to obtain through litigation what it could not achieve through negotiation.

In January 2012, Medlmmune timely removed the case to this Court based on the diversity of citizenship of the parties and moved for a stay pending resolution of the Maryland action.

II. Legal Analysis

A. Standard

1. The Colorado River and Wilton/Brillhart doctrines

When a federal action runs parallel to a state court proceeding involving simi[33]*33lar parties and issues, a district court may, under certain circumstances, stay the federal action or certain of the claims, pending the resolution of the state court action, in the interests of cooperative federalism and judicial economy. The standard to determine whether a stay is appropriate depends on the character of relief sought.

If the federal plaintiffs seek damages or injunctive relief (hereafter referred to as “coercive relief’)', a district court may stay the case only in “exceptional circumstances.” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). Because federal courts have a “virtually unflagging obligation” to exercise the jurisdiction granted to them by Congress, the “crevice” in federal jurisdiction carved out by the Colorado River doctrine “is a narrow one.” Jiménez v. Rodríguez-Pagán, 597 F.3d 18, 27 (1st Cir.2010). The doctrine “is to be used sparingly and approached with great caution.” Nazario-Lugo v. Caribevision Holdings, Inc., 670 F.3d 109, 115 (1st Cir.2012) (ruling that the District Court abused its discretion in dismissing case pursuant to the Colorado River doctrine).

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