United States District Court, D. South Carolina, Greenville Division
Concordia Pharmaceuticals Inc., S.A.R.L., Advanz Pharma Corp f/k/a Concordia International Corp., and Concordia Pharmaceuticals U.S. Inc., Plaintiffs and Counter Defendants,
Lazarus Pharmaceuticals, Inc., Mark Thompson, and Jean Paul Laurin, Defendants and Counter Claimants. Concordia Pharmaceuticals Inc. and Concordia Pharmaceuticals U.S. Inc., Plaintiffs,
Christopher Blake Kelley, Defendant.
OPINION & ORDER
M. HERLONG, JR., SENIOR UNITED STATES DISTRICT JUDGE
matter is before the court with the Report and Recommendation
of United States Magistrate Judge Jacquelyn D. Austin, made
in accordance with 28 U.S.C. § 636(b) and Local Civil
Rule 73.02 of the District of South Carolina. Concordia
Pharmaceuticals, Inc., Advanz Pharma Corp. (f/k/a/ Concordia
International Corp.), and Concordia Pharmaceuticals (US),
Inc. (collectively “Concordia”), plaintiffs and
counter defendants in Civil Action Number 6:18-1658-HMH-JDA,
filed a motion to dismiss and strike counterclaims, pursuant
to Rules 12(b)(6) and 12(f) of the Federal Rules of Civil
Procedure. (Mot. Dismiss, ECF No. 102.) Magistrate Judge
Austin recommends granting Concordia's motion to dismiss
and strike counterclaims, denying Defendants' request to
amend their answer, and denying Defendants' motion for
oral argument. For the reasons set forth below, the court
grants Concordia's motion to dismiss, dismisses
Concordia's motion to strike as moot, and denies
Defendants' motion for oral argument.
Factual and Procedural History
action arises out of Lazarus Pharmaceuticals, Inc.'s
(“Lazarus”) manufacturing and selling of a
pharmaceutical phenobarbital and belladonna alkaloids
(“PBA”) elixir used for the treatment of
irritable bowel syndrome. (Am. Compl. ¶¶ 1, 19, ECF
No. 80.) Concordia distributes and markets Donnatal
pharmaceutical products, which also contain PBA, to treat
irritable bowel syndrome. (Id. ¶¶ 15-17,
ECF No. 80.) Concordia alleges that Lazarus is “seeking
to exploit the success of Donnatal Elixir by manufacturing
and marketing a ‘knock-off' PBA elixir while aided
by intellectual property wrongfully obtained from
Plaintiffs.” (Id. ¶ 19, ECF No. 80.)
Defendant Mark Thompson (“Thompson”) is the
founder and former chief executive officer of Concordia
International. (Id. ¶¶ 72-73, ECF No. 80.)
Defendant Jean Paul Laurin (“Laurin”) is the
former vice president of Concordia International.
(Id. ¶ 75, ECF No. 80.) After leaving
Concordia, Thompson founded Lazarus, and Laurin is employed
by Lazarus. (Am. Compl. ¶¶ 72-79, ECF No. 80.)
filed an amended complaint on February 1, 2019.
(Id., ECF No. 80.) On February 15, 2019, Defendants
filed their answer and counterclaims against Concordia.
(Answer & Countercl., ECF No. 94.) On March 8, 2019,
Defendants filed their amended answer and counterclaims. (Am.
Answer & Countercl., ECF No. 96.) Defendants allege
counterclaims for (1) violation of the South Carolina Unfair
Trade Practices Act (“SCUTPA”), SC Code Ann.
§ 39-5-10, et seq., (2) abuse of process, and
(3) bad faith claim of misappropriation of trade secrets.
(Id. ¶¶ 349-71, ECF No. 96.) On March 29,
2019, Concordia filed a motion to dismiss and strike
Defendants' counterclaims. (Mot. Dismiss, ECF No. 102.)
On April 12, 2019, Defendants filed their response in
opposition. (Resp. Opp'n Mot. Dismiss, ECF No. 104.) On
April 19, 2019, Concordia filed its reply. (Reply, ECF No.
April 29, 2019, Defendants filed a motion requesting oral
argument on Concordia's motion to dismiss. (Mot.
Hr'g, ECF No. 108.) On May 3, 2019, Concordia filed a
response in opposition. (Resp. Opp'n Mot. Hr'g, ECF
No. 112.) Magistrate Judge Austin issued her Report and
Recommendation on May 17, 2019. (R&R, generally, ECF No.
115.) Defendants filed objections to the Report and
Recommendation on May 31, 2019. (Objs., ECF No. 121.)
Concordia filed its reply to the objections on June 14, 2019.
(Reply Objs., ECF No. 126.) These matters are now ripe for
Standard of Review
Motion to Dismiss
Federal Rule of Civil Procedure 12(b)(6), “a motion to
dismiss for failure to state a claim should not be granted
unless it appears certain that the plaintiff can prove no set
of facts which would support its claim and would entitle it
to relief.” Mylan Lab., Inc. v. Matkari, 7
F.3d 1130, 1134 (4th Cir. 1993). “In considering a
motion to dismiss, the court should accept as true all
well-pleaded allegations and should view the complaint in a
light most favorable to the plaintiff.” Id.
withstand a Rule 12(b)(6) motion to dismiss, “a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “The
plausibility standard is not akin to a probability
requirement, but it asks for more than a sheer possibility
that a defendant has acted unlawfully.” Id.
(internal quotation marks omitted). While a complaint
“does not need [to allege] detailed factual
allegations, ” pleadings that contain mere
“labels and conclusions” or “a formulaic
recitation of the elements of a cause of action will not
do.” Twombly, 550 U.S. at 555. “Where a
complaint pleads facts that are merely consistent with a
defendant's liability, it stops short of the line between
possibility and plausibility of entitlement to relief.”
Iqbal, 556 U.S. at 678 (internal quotation marks
omitted). Stated differently, “where the well-pleaded
facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged-but it
has not ‘show[n]'-‘that the pleader is
entitled to relief.'” Id. at 679 (quoting
Motion to Strike
Rule of Civil Procedure 12(f) authorizes the court to
“strike from the pleading an insufficient defense or
any redundant, immaterial, impertinent, or scandalous
matter.” When presented with a motion to strike,
“the court must view the pleading under attack in a
light most favorable to the pleader.” Clark v.
Milam, 152 F.R.D. 66, 71 (S.D. W.Va. 1993). A motion to
strike is a drastic remedy that is disfavored by courts.
Waste Mgmt. Holdings v. Gilmore, 252 F.3d 316, 347
(4th Cir. 2001).