Alliance Life Sciences Consulting Group, Inc. v. Fabriczi et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM QuintilesIMS's Counterclaims

E.D. Pa.April 14, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ALLIANCE LIFE SCIENCES : CONSULTING GROUP, INC., : : Plaintiff : C.A. No.: 2:17-cv-00864-CDJ v. : : LASZLO FABRICZI, : : and : : QUINTILES IMS (f/k/a IMS Health), : : Defendants. : ORDER AND NOW, this ________ day of __________________, 2017, upon consideration of Plaintiff/Counterclaim-Defendant Alliance Life Sciences Consulting Group, Inc.’s Motion to Dismiss Defendant Quintiles IMS’s Counterclaims, and any response thereto, it is hereby ORDERED that the Motion is GRANTED, and Defendant Quintiles IMS’s Counterclaims are hereby DISMISSED with prejudice. BY THE COURT: ___________________________________ C. Darnell Jones II, J. Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 1 of 14 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ALLIANCE LIFE SCIENCES : CONSULTING GROUP, INC., : : Plaintiff : C.A. No.: 2:17-cv-00864-CDJ v. : : LASZLO FABRICZI, : : and : : QUINTILES IMS (f/k/a IMS Health), : : Defendants. : DEFENDANT ALLIANCE LIFE SCIENCES CONSULTING GROUP, INC.’S MOTION TO DISMISS DEFENDANT QUINTILES IMS’S COUNTERCLAIMS Plaintiff/Counterclaim-Defendant Alliance Life Sciences Consulting Group, Inc., by and through its undersigned counsel, hereby moves this Court to dismiss Defendant/Counterclaim- Plaintiff Quintiles IMS’s Counterclaims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. The legal bases for the instant Motion are fully set forth in the accompanying Memorandum of Law, which is incorporated herein by reference. Respectfully submitted, Jacobs Law Group, PC Dated: April 14, 2017 /s/ Richard Miller Richard E. Miller (I.D. No. 46451) Samuel M. First (I.D. No. 66176) 2005 Market Street Suite 1120 Philadelphia, PA 19107 215-569-9701 Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 2 of 14 2 Of Counsel: GREY STREET LEGAL, LLC Janeen Olsen Dougherty (I.D. No. 65883) 356 N. Pottstown Pike, Suite 200 Exton, Pennsylvania 19341 (610) 594-4737 Attorneys for Plaintiff/Counterclaim- Defendant Alliance Life Sciences Consulting Group, Inc. Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 3 of 14 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ALLIANCE LIFE SCIENCES : CONSULTING GROUP, INC., : : Plaintiff : C.A. No.: 2:17-cv-00864-CDJ v. : : LASZLO FABRICZI, : : and : : QUINTILES IMS (f/k/a IMS Health), : : Defendants. : DEFENDANT ALLIANCE LIFE SCIENCES CONSULTING GROUP, INC.’S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS DEFENDANT QUINTILES IMS’S COUNTERCLAIMS Plaintiff/Counterclaim-Defendant Alliance Life Sciences Consulting Group, Inc. (“Alliance”) submits this Memorandum of Law in support of its Motion to Dismiss Defendant/Counterclaim-Plaintiff Quintiles IMS’s (“Quintiles”) Counterclaims: I. INTRODUCTION Alliance initiated this litigation to protect its contractual rights and to prevent Defendants from causing and continuing to cause Alliance irreparable harm. Defendant Fabriczi is a former Alliance employee who now works for Quintiles, a direct competitor of Alliance, in direct violation of the restrictive covenants contained in his Employment Agreement with Alliance (the “Employment Agreement”). To compound the breach and violations of the Employment Agreement, Fabriczi is being utilized by Quintiles to provide services to its customer Johnson & Johnson1 (“J&J”) - also a customer of Alliance - on a project with respect to which Fabriczi acquired trade secrets while employed by Alliance. Alliance seeks an injunction to prevent 1 Referred to in the Amended Complaint and Answer with Counterclaims as “Customer 1.” Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 4 of 14 2 Fabriczi from continuing to blatantly violate his contractual obligations. Alliance has also named Quintiles as a defendant in this litigation because Quintiles knowingly conspired with Fabriczi to violate the restrictive covenants, tortuously interfered with Alliance’s agreement with Fabriczi, and abetted Fabriczi’s ongoing violations. See Am. Complt., Dkt. No. 13, at Counts II- VI. Quintiles has filed Counterclaims against Alliance for tortious interference with contract, common law abuse of process, and “bad faith,” alleging that Alliance’s true purpose in seeking to enforce Fabriczi’s restrictive covenants is to harm Quintiles by damaging its relationship with J&J. But Quintiles alleges no facts tending to support its claim of nefarious intent. In fact, Quintiles has admitted that it is a competitor of Alliance and that it continues to employ Fabriczi to perform services for J&J. See Am. Complt. at ¶¶ 69; 95; Quintiles Answer to Am. Complt. at ¶¶ 69; 95. The only additional well-pled facts Quintiles asserts in its Counterclaim are that: (1) Quintiles has a longstanding business relationship with J&J; and (2) in January 2017, J&J engaged Quintiles to develop a strategy to transfer paper and legacy contracts onto J&J’s current computer platform. See Counterclaim at ¶¶ 9; 12. The remainder of Quintiles’ allegations are nothing more than threadbare recitations of the elements of the claims it purports to assert, and none of the facts Quintiles asserts tends to show that Alliance has instituted this litigation for any purpose other than to properly enforce its own contractual rights. Nor has Quintiles alleged any facts tending to show that it has in any way suffered compensable harm. Even more, Quintiles has entirely omitted some elements of its tortious interference and abuse of process claims, and has invented its bad faith claim altogether. For these reasons, as explained more fully below, each of Quintiles’ Counterclaims is insufficient as a matter of law and should therefore be dismissed with prejudice. Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 5 of 14 3 II. LEGAL ARGUMENT A. Standard of Review. In considering Alliance’s Motion to Dismiss under Rule 12(b)(6), this Court “must accept all of the [Counterclaim’s] well-pleaded facts as true, but may disregard any legal conclusions.” Fowler v. UPMC, 578 F.3d 203, 210-11 (3d Cir. 2009), citing Ashcroft v. Iqbal, 556 U.S. 662, (2009) (emphasis added). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 679, citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). This Court “must then determine whether the [well- pleaded] facts alleged in the complaint are sufficient to show that the plaintiff has a ‘plausible claim for relief.’” Fowler, 578 F.3d at 211, quoting Iqbal, 556 U.S. at 679. To be “plausible,” a claimant’s allegations must “do more than allege the [claimant’s] entitlement to relief”; they must “‘show’ such an entitlement with [ ] facts.” Id. In applying these standards, the Court may consider the pleading at issue, exhibits attached to the pleading, matters of public record, as well as undisputedly authentic documents to the extent that the claims at issue are based upon those documents. Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010). As explained more fully below, Quintiles’ Counterclaims contain nothing more than threadbare recitals of the elements of the causes of action that Quintiles purports to assert. Quintiles has not alleged any facts - let alone any well-pleaded facts - tending to show that Alliance engaged in any intentional or bad faith conduct or that Alliance’s conduct caused any harm whatsoever. Even more, Quintiles has failed to plead the essential elements of its tortious interference with contract and abuse of process claims, and has invented a claim for “bad faith,” which does not exist under Pennsylvania law. The crux of all three of Quintiles’ claims is its assertion that Alliance’s true intent in initiating the instant litigation was to harm Quintiles. But Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 6 of 14 4 such claim is completely implausible because it is abundantly clear - based upon the pleadings and upon the indisputably authentic Employment Agreement attached to Alliances’ Amended Complaint (see Dkt. No. 12 at Exh. A) - that Alliance’s goal is to obtain a preliminary injunction preventing Defendant Fabriczi from continuing to violate the restrictive covenants in his Employment Agreement and preventing Quintiles from continuing to enable such violation. Quintiles has failed to assert any well-pleaded facts to the contrary, and its Counterclaims therefore fall woefully short of the pleading standards set forth in Federal Rule of Civil Procedure 8, as construed by the Supreme Court in Iqbal. Quintiles’ Counterclaims should be dismissed. B. Quintiles Has Not Adequately Pled a Claim for Tortious Interference With Contract. To plead a tortious interference with contract under Pennsylvania law2, a claimant must prove: (1) the existence of a contractual, or prospective contractual relation between the complainant and a third party; (2) purposeful action on the part of the counterclaim-defendant, specifically intended to harm the existing relation; (3) the absence of privilege or justification on the part of the counterclaim-defendant; and (4) the occasioning of actual legal damage as a result of the counterclaim-defendant’s conduct. Strickland v. University of Scranton, 700 A.2d 979, 985 (Pa. Super. 1997). Although Quintiles has alleged that it holds a contractual relationship with J&J, see Counterclaim at ¶¶ 12-13; 18, it has failed to adequately plead any of the three remaining elements of its tortious interference with contract claim. The second element of tortious interference with contract “requires proof that the defendant acted ‘for the specific purpose of causing harm to the [claimant].’” Empire Trucking Co. v. Reading Anthracite Coal Co., 71 A.2d 923, 93 (Pa. Super. 2013), citing Phillips v. Selig, 2 Pennsylvania law applies to Quintiles’ Counterclaims. See Erie R. R. v. Tompkins, 304 U.S. 64, 76 (1938). Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 7 of 14 5 959 A.2d 420, 429 (Pa. Super. 2008). While Quintiles has alleged that Alliance intentionally interfered with the Quintiles-J&J contract “by filing the instant lawsuit and lodging allegations related to QuintilesIMS’s conduct… in order to disrupt QuintilesIMS’s work on the Conversion Project,” see Counterclaim at ¶ 19, this naked assertion lacks both supporting facts and plausibility. Although Quintiles contends that Alliance filed the instant lawsuit to interfere with its contract, Quintiles has not provided a single fact to support its claim. In other words, its allegation regarding Alliance’s intent is not well-pleaded and amounts to nothing more than a threadbare recital of an element of the cause of action. The pleadings and procedural history of this case, which this Court may consider in evaluating the adequacy of Quintiles’ Counterclaims, see Mayer, 605 F.3d at 230, make clear that Alliance’s sole purpose in initiating this litigation and seeking a preliminary injunction is to enforce its own contractual rights and to prevent further irreparable harm caused by Defendant Fabriczi’s continuing violation thereof. Quintiles has not adequately pled the “specific intent” element of its tortious interference with contract claim. Even more fatal to its tortious interference claim is that Quintiles has failed entire to allege the third element - absence of privilege or justification. Pennsylvania law is clear that in order to succeed on a tortious interference claim, a claimant “must prove not only that a defendant acted intentionally to harm the plaintiff, but also that those actions were improper. In determining whether a defendant’s actions were improper, the trial court must take into account the [ ] factors listed in Restatement (Second) of Torts §767.”3 Empire Trucking Co. v. Reading 3 The following factors are considered to determine whether an actor’s conduct is improper: (1) the nature of the conduct; (2) the actor’s motive; (3) the interest of the other with which the actor’s conduct interferes; (4) the interests sought to be advanced by the actor; (5) the social interest in protecting the freedom of action of the actor and the contractual interests of the other; (6) the proximity or remoteness of the actor’s conduct in the interference; and (7) the relations between the parties. Walnut St. Assocs. v. Brokerage Concepts, Inc., 20 A.3d 468, 469 (Pa. 2011), citing Restatement (Second) of Torts §767 (listing factors relevant to determining whether interference is improper). Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 8 of 14 6 Anthracite Coal Co., 71 A.2d 923, 934 (Pa. Super. 2013). This Court need not even reach that analysis at this stage of the proceedings, however, because Quintiles has not even bothered to allege that Alliance’s conduct in initiating this litigation was improper. Perhaps that is because it is indisputable that Alliance may properly seek to enforce its valid restrictive covenants by moving for preliminary equitable relief in this Court. See Fabriczi Employment Agreement, Am. Complt. at Exh. A (specifically providing that either party has “the right to seek interim relief, such as injunction… through judicial process” to remedy a violation thereof); see also Barlow v. Brunswick Corp., 311 F. Supp. 209, 213 (E.D. Pa. 1970) (holding that a party is privileged to interfere with another’s contract to safeguard “a legally protected interest which the interfering party believes will be impaired unless he acts”). Because the propriety of Alliance’s conduct in bringing this action is abundantly clear, Quintiles has conveniently skipped over this element in its pleading, and its tortious interference with contract claim is therefore legally insufficient. Finally, although Quintiles has alleged generally that the instant lawsuit has somehow made Quintiles’ performance of its contract with J&J “more expensive or difficult” and has caused “reputational harm,” see Counterclaim at ¶¶ 20-21, once again Quintiles has completely failed to provide any supporting facts whatsoever. A claim for tortious interference with contract requires an allegation of actual harm. Binswanger of Pa., Inc. v TSG Real Estate LLC, No. 0901, 2015 Phila. Ct. Com. Pl. LEXIS 200, at *10-11 (CCP Phila. Sept. 1, 2015). Quintiles has not pled any facts tending to show how its performance of its contract with J&J has become “more expensive or difficult,” or how such increased expense or difficulty is in any way related to this lawsuit. Additionally, “[i]n the absence of pecuniary loss, an action for interference with contract brought for the purpose of recouping damages for loss of reputation… [is] nothing more than a defamation action under a different caption” and is not actionable under Pennsylvania law. Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 9 of 14 7 See Pelagatti v. Cohen, 536 A.2d 1337, 1343-33 (Pa. Super. 1987). In sum, Quintiles’ purported claim for tortious interference with contract is woefully insufficient under Pennsylvania law and under the federal pleading standards set forth in Rule 8 and Iqbal, and should be dismissed. C. Quintiles Has Not Adequately Pled a Claim for Abuse of Process. Quintiles’ claim for common law abuse of process is essentially a superfluous reformulation of its tortious interference claim, and is equally insufficient. In this claim, Quintiles doubles down on its allegation that Alliance’s chief purpose in filing the instant lawsuit is to harm Quintiles. It is not, and Quintiles’ Counterclaims lack any well-pleaded facts to the contrary. To establish a claim for abuse of process in Pennsylvania, the following elements must be shown: (1) that the defendant used a legal process against the plaintiff; (2) primarily to accomplish a purpose for which the process was not designed; and (3) harm has been caused to the plaintiff. As in its tortious interference claim, Quintiles has properly alleged the first element, and there is no dispute that Alliance has used a legal process against Quintiles. But the sufficiency of Quintiles’ claim stops there. Quintiles has failed to sufficiently allege elements (2) and (3), and its abuse of process claim must therefore be dismissed. As with its tortious interference claim, in order to sufficiently plead its abuse of process claim, Quintiles must properly allege that Alliance’s primary purpose in filing this lawsuit was to achieve some illegitimate goal. “The gravamen of abuse of process is the perversion of the particular legal process for a purpose of benefit to the defendant, which is not an authorized goal of the procedure.” Shiner v. Moriarty, 706 A.2d 1228, 1236 (Pa. Super. 1998) (citations omitted). In order to properly plead this element, a claimant must allege “some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process.” Id. (internal quotation omitted). “There is no liability where the defendant has done Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 10 of 14 8 nothing more than carry out the process to its authorized conclusion.” Id., citing Di Sante v. Russ Financial Co., 380 A.2d 439, 441 (Pa.Super. 1977) (quotation omitted). Abuse of process is, in other words, “the use of legal process as a tactical weapon to coerce a desired result that is not the legitimate object of the process." Werner v. Plater-Zyberk, 799 A.2d 776, 785 (Pa.Super. 2002), appeal denied, 569 Pa. 722, 806 A.2d 862 (2002); see also Al Hamilton Contracting Co. v. Cowder, 644 A.2d 188, 192 (Pa. Super. 1994) (holding that “there must be an act or threat not authorized by the process, or the process must be used for an illegitimate aim such as extortion, blackmail, or to coerce or compel the [claimant] to take some collateral action”). None of that is present here, and Quintiles has not even so alleged. Quintiles acknowledges that it continues to employ Fabriczi and that Fabriczi continues to provide services to J&J. See Am. Complt. at ¶ 95; Quintiles’ Answer at ¶ 95. No party has disputed the authenticity of Fabriczi’s Employment Agreement. Alliance is unquestionably permitted to seek an injunction to enforce its contractual rights. There is nothing in Quintiles’ Counterclaim or any other pleading even remotely suggesting that Alliance is doing anything other than attempting to carry out this preliminary injunction proceeding “to its authorized conclusion.” Quintiles’ threadbare allegation that Alliance’s true purpose is to harm Quintiles is implausible, unsupported, and insufficient. Also as above, here Quintiles has failed to properly allege that it has been harmed by Alliance’s alleged abuse of process. Quintiles seeks only its attorneys fees as damages for this claim. See Counterclaim at ¶ 28. But even if such fees did constitute “actual harm” stemming from an abuse of process - which is doubtful, as entitlement to attorneys’ fees is governed by statute in Pennsylvania4 - Quintiles’ alleged harm is entirely prospective. In other words, Quintiles has failed to allege that it has already suffered harm; rather, it is attempting to shoehorn 4 See 25 Pa. C.S. §2503. Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 11 of 14 9 any fees it will incur in defending against the instant action into an element of its abuse of process claim that requires it to show that “harm has been caused” (past tense). This is improper, and Quintiles has failed to sufficiently assert this element of its abuse of process claim. The claim should therefore be dismissed. D. Quintiles Has Not Adequately Pled a Claim for Bad Faith. Finally, Quintiles has attempted to assert a claim for “Bad Faith [ ] For Misappropriation of Trade Secrets,” in which it alleges that Alliance’s trade secrets claims (Counts V and VI of the Amended Complaint) have been made in bad faith and “solely to restrict QuintilesIMS’s competitive activities,” and that Quintiles has suffered harm in the form of “loss of money, property, reputation, and/or potential business.” See Counterclaim at ¶ 30-35. This cause of action does not even exist under Pennsylvania law. Rather, if a party believes that a plaintiff has brought a claim in bad faith and without probable cause, then the party may seek sanctions under Fed. R. Civ. P. 11 or, under Pennsylvania law, may bring a claim under the Dragonetti Act, 42 Pa. C.S.A. § 8351, if and when the proceedings are terminated in its favor. What a party may not do is invent a cause of action seeking to recover some unquantified amount of damages for “loss of money, property, reputation, and/or potential business.”5 Quintiles’ purported claim for “bad faith” is not only implausible, it is imaginary, and should therefore be dismissed. 5 Quintiles’ use of the grammatical conjunction “and/or” here is curious. Quintiles alleges that it has already suffered damages, but appears to be unaware or unsure of the kind of harm it has suffered. Indeed, Quintiles’ use of “and/or” in this context serves only to undermine the plausibility of its claims. Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 12 of 14 10 III. CONCLUSION For the foregoing reasons, Plaintiff/Counterclaim-Defendant Alliance Life Sciences Consulting Group, Inc. respectfully requests that this Court enter an order dismissing Defendant/Counterclaim-Plaintiff Quintiles IMS’s Counterclaims with prejudice. Respectfully submitted, Jacobs Law Group, PC Dated: April 14, 2017 /s/ Richard Miller Richard E. Miller (I.D. No. 46451) Samuel M. First (I.D. No. 66176) 2005 Market Street Suite 1120 Philadelphia, PA 19107 215-569-9701 Of Counsel: GREY STREET LEGAL, LLC Janeen Olsen Dougherty (I.D. No. 65883) 356 N. Pottstown Pike, Suite 200 Exton, Pennsylvania 19341 (610) 594-4737 Attorneys for Plaintiff/Counterclaim- Defendant Alliance Life Sciences Consulting Group, Inc. Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 13 of 14 CERTIFICATE OF SERVICE I hereby certify that on April 14, 2017, I caused the foregoing Motion to Dismiss Counterclaims, along with accompanying Memorandum of Law and proposed order, to be filed electronically via the Court’s Civil Electronic Filing System. It is available for viewing and downloading by all counsel of record. /s/Richard Miller Richard Miller Case 2:17-cv-00864-CDJ Document 32 Filed 04/14/17 Page 14 of 14