979 F. Supp. 2d 658
M.D.N.C.2013Background
- Dr. Richard S. Stack, an interventional cardiologist, entered a series of consulting agreements (most recently a 2001 Agreement with Guidant) that promised consulting fees and royalties for products using defined "Royalty Bearing Product" technologies (Bioabsorbable Stent, Drug Delivery, Peripheral). The Agreement ran through Dec. 31, 2010 and required quarterly royalty payments and a $480,000 "Launch Payment" for Drug Delivery product commercial launch.
- Guidant (and its ACS subsidiary) was acquired by Abbott in April 2006; Stack received an August 28, 2006 letter stating Abbott affiliates assumed Guidant’s rights and obligations under the Agreement.
- Stack alleges Abbott marketed Xience V (a drug‑eluting stent) beginning in 2006 that practices Drug Delivery Technology and other Royalty Bearing Products, but Abbott failed to pay royalties or the Launch Payment; Stack claims Abbott admitted owing the Launch Payment.
- Stack also alleges Abbott removed references to a third‑party patent (Pacetti Patent) from Xience V packaging and excluded Stack’s name from certain Abbott patent applications to minimize his market value and conceal his role.
- Stack sued for breach of contract and violation of North Carolina’s UDTPA; Abbott moved to dismiss on multiple grounds (failure to state claims against certain Abbott entities, statute of limitations, lack of specificity as to products other than Xience V, and insufficiency of UDTPA allegations).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether parent Abbott Laboratories and Abbott Vascular are properly pleaded defendants | Stack points to the acquisition letter suggesting Abbott affiliates assumed Guidant’s obligations and the letter’s references to Abbott Laboratories | Abbott says parent and Abbott Vascular are not implicated and parent liability is improper absent piercing or specific allegations | Denied dismissal as to Abbott Laboratories (claim plausible on letter); granted dismissal without prejudice as to Abbott Vascular for lack of factual nexus |
| Whether contract claims are time‑barred | Stack argues tolling/equitable estoppel based on an alleged acknowledgment by Capek that Abbott owed the Launch Payment | Abbott argues Stack knew of Xience V launch in 2006 and demanded payment, so claims before Feb 13, 2008 are barred by the 4‑year California limitations period | Contract claims accruing before Feb 13, 2008 dismissed without prejudice; equitable estoppel not plausibly pleaded |
| Whether breach claims about unspecified products (other than Xience V) are plead with sufficient specificity | Stack relies on the Agreement’s defined technology categories to identify covered products | Abbott contends Stack must identify specific products to give fair notice | Pleading is sufficient at this stage because Agreement defines the technology categories; dismissal on this basis denied |
| Whether UDTPA claim survives | Stack contends breaches, removal of his inventor credit, and removal of Pacetti Patent reference are unfair/deceptive and affect commerce | Abbott contends the royalty dispute is a contractual/employer‑employee issue outside UDTPA, and the patent/labeling allegations are either preempted or not sufficiently egregious/commerce‑affecting | UDTPA claim dismissed: royalty failure is contractual (no impact on commerce); exclusion from inventor credit likewise contract performance; removal of Pacetti Patent reference is too attenuated to constitute substantial aggravation |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: plausible factual content required)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (antitrust pleading standard; plausibility framework)
- United States v. Bestfoods, 524 U.S. 51 (general rule that parent corp. not liable for subsidiary acts)
- Goodman v. Praxair, Inc., 494 F.3d 458 (4th Cir. 2007) (statute of limitations dismissal at Rule 12(b)(6) rare; affirmative defense only when clear on complaint face)
- Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331 (4th Cir. 1998) (caution against piggybacking UDTPA claim onto contract dispute)
- Dalton v. Camp, 353 N.C. 647 (N.C. 2001) (elements of UDTPA and requirement that act affect commerce)
- White v. Thompson, 364 N.C. 47 (N.C. 2010) (UDTPA applies to business‑to‑business and business‑to‑consumer interactions; not internal single‑business disputes)