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Barnett v. Surefire Medical, Inc.

United States District Court, D. Colorado

September 23, 2018

DR. BRADLEY BARNETT, Plaintiff,
v.
SUREFIRE MEDICAL, INC. and DR. ARAVIND AREPALLY, Defendants.

          ORDER

          PHILIP A. BRIMMER United States District Judge

         This matter comes before the Court on Defendants' Motion to Dismiss Plaintiff's Seventh Claim for Unjust Enrichment and Memorandum of Points and Authorities in Support Thereof [Docket No. 18]. The Court has jurisdiction pursuant to 28 U.S.C. § 1331 and 1367.

         I. BACKGROUND[1]

         This case involves a patented design for an anti-reflux catheter. See Docket No. 1 at 1. Plaintiff alleges that he developed the design in 2007 while working at Johns Hopkins Medical Institution (“JHMI”) under the supervision of defendant Aravind Arepally. Id. at 4-7, ¶¶ 7, 11, 15, 18. In 2009, Dr. Arepally left JHMI and co-founded defendant Surefire Medical, Inc. (“Surefire”). Id. at 9-10, ¶¶ 23-24. On December 2, 2009, Surefire filed a revised provisional patent application for an anti-reflux catheter design featuring an expandable and retractable mesh tip. Id. at 10, ¶ 25. On July 2, 2010, Surefire filed a non-provisional patent application (the “'525 Application”) claiming priority from the revised provisional application and formally identifying Dr. Arepally as an inventor of the anti-reflux catheter design. Id. at 11-12, ¶¶ 29-30. On August 6, 2013, the U.S. Patent and Trademark Office issued U.S. Patent No. 8, 500, 775 (775 Patent”) from Surefire's non-provisional patent application. Id. at 12, ¶ 30; Docket No. 1-3 at 2.[2] The '775 Patent describes a “protection device and method against embolization agent reflux” and lists James E. Chomas, Leonard Pinchuk, John Martin, and Aravind Arepally as inventors. Docket No. 1-3 at 2. Surefire is listed on the patent as the “assignee.” Id. After the issuance of the '775 Patent, Surefire obtained additional patents based in whole or in part on the '525 Application. Docket No. 1 at 12, 31.

         As an inventor at JHMI, plaintiff claims he was “contractually entitled to compensation for commercialization of any patent that issued based on his invention pursuant to [Johns Hopkins University's] Intellectual Property Policy.” Docket No. 1 at 8, 12-13, ¶¶ 20, 32. He further states that “there is a definitive reputational advantage [in academia] to being named an inventor on patents that result in medical products as well as receiving research grants utilizing said technology.” Id. at 13, ¶ 34. Plaintiff alleges that Surefire and Arepally have derived substantial benefit from the anti-reflux catheter patents in the form of investments, compensation, and professional advancement. Id. at 13, ¶¶ 35-37. Plaintiff asserts that defendant Arepally has received at least $135, 000 in consulting fees related to the anti-reflux catheters beginning in 2015. Id., ¶ 37.

         Plaintiff filed this lawsuit on October 16, 2017 asserting six claims for correction of inventorship and damages in relation to various patents issued to Surefire, and one claim for unjust enrichment against Dr. Arepally. See Id. at 18-29.[3] On November 30, 2017, defendants moved to dismiss the unjust enrichment claim under Fed.R.Civ.P. 12(b)(6) on the ground that the claim is barred by the applicable statute of limitations. Docket No. 18. Plaintiff filed a response to the motion on December 21, 2017, Docket No. 19, to which defendants replied on January 4, 2018. Docket No. 20.

         II. LEGAL STANDARD

         To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must allege enough factual matter that, taken as true, makes the plaintiff's “claim to relief . . . plausible on its face.” Khalik v. United Air Lines, 671 F.3d 1188, 1190 (10th Cir. 2012) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “[W]here 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 shown-that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal quotation marks and alteration marks omitted); see also Khalik, 671 F.3d at 1190 (“A plaintiff must nudge [his] claims across the line from conceivable to plausible in order to survive a motion to dismiss.” (quoting Twombly, 550 U.S. at 570)). If a complaint's allegations are “so general that they encompass a wide swath of conduct, much of it innocent, ” then plaintiff has not stated a plausible claim. Khalik, 671 F.3d at 1191 (quotations omitted). Thus, even though modern rules of pleading are somewhat forgiving, “a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.” Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008) (alteration marks omitted).

         “Although a statute of limitations bar is an affirmative defense, it may be resolved on a Rule 12(b)(6) motion to dismiss ‘when the dates given in the complaint make clear that the right sued upon has been extinguished.'” Torrez v. Eley, 378 Fed.Appx. 770, 772 (10th Cir. 2010) (unpublished) (quoting Aldrich v. McCulloch Props., Inc., 627 F.2d 1036, 1041 n.4 (10th Cir. 1980)).

         III. ANALYSIS

         Defendants argue that plaintiff's unjust enrichment claim accrued no later than August 6, 2013, the date on which the '755 Patent was issued, and is therefore barred by the three-year statute of limitations in Colo. Rev. Stat. § 13-80-101(1). Docket No. 18 at 5. Plaintiff responds that (1) defendants have failed to show that Colorado law applies rather than the law of Maryland or Georgia; (2) plaintiff's cause of action did not accrue in 2013 because Arepally had assigned all rights in the patent to Surefire and therefore obtained no benefit from the issuance of the patent until 2015; (3) even assuming Colorado law governs plaintiff's unjust enrichment claim, the applicable limitations period is six years, not three; and (4) there are extraordinary circumstances in this case precluding application of the statute of limitations to plaintiff's unjust enrichment claim. Docket No. 19 at 1-2.

         A. Whether a Six-Year Limitations Period Applies

         Although the parties' briefs discuss the choice of law issue first, the Court will begin by addressing whether the six-year limitations period under Colo. Rev. Stat. § 13-80-103.5(1)(a) applies given that six years is the longest limitations period potentially applicable to plaintiff's unjust enrichment claim under Colorado, Maryland, or Georgia law.

         Under Colorado law, “[e]quitable claims . . . are technically subject to an equitable laches rather than a legal statute of limitations analysis.” Sterenbuch v. Goss, 266 P.3d 428, 436 (Colo.App. 2011). Absent extraordinary circumstances, “a court will usually grant or withhold relief by analogy to the statute of limitations relating to actions at law of like character.” Id. (internal quotation marks and brackets omitted).

         Colorado courts have typically assessed unjust enrichment claims, which are brought in quasi-contract or contract implied in law, “under the three-year statute of limitations for contract actions.” Id. at 437 (citing Colo. Rev. Stat. § 13-80-101(1)(a)).[4] Here, however, plaintiff contends that the six-year statute of limitations set forth in Colo. Rev. Stat. § 13-80-103.5(1)(a) applies because his claim is for “a readily ascertainable amount, ” namely, “a percentage of the amount Arepally was paid beginning in 2015 related to commercialization of the patented inventions.” Docket No. 19 at 11.

         Section 13-80-103.5(1)(a) provides, in relevant part, that a six-year limitations period applies to “[a]ll actions to recover a liquidated debt or an unliquidated, determinable amount of money due to the person bringing the action.” Defendants argue that plaintiff's complaint “does not allege either a liquidated debt or a ‘determinable amount' allegedly misappropriated by Arepally, ” and thus the three-year limitations period under Colo. Rev. Stat. § 13-80-101 applies. Docket No. 20 at 4.

         In Portercare Adventist Health System v. Lego, 286 P.3d 525 (Colo. 2012), the Colorado Supreme Court held that a claim involves “liquidated debt” under § 13-80-103.5(1)(a) if “the amount owed is ascertainable either by reference to the agreement, or by simple computation using extrinsic evidence if necessary.” Id. at 526. The court reasoned that the claim at issue, which sought the recovery of medical expenses, “involve[d] a ...


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