Opinion
05 Civ. 10580 (SAS).
March 13, 2006
Richard Pu, Esq., New York, New York, For Plaintiffs.
Edward J. Reich, Esq., Cliona A. Levy, Esq., SONNENSCHEIN NATH ROSENTHAL LLP, New York, New York, For Defendants.
OPINION AND ORDER
I. INTRODUCTION
Titan Pharmaceuticals and Nutrition, Inc. and George Mitsopolous (collectively "Titan") bring this putative class action alleging fraud related to their license agreement (the "License Agreement") with Medicine Shoppe International, Inc. ("MSI"). The License Agreement contains an arbitration clause requiring the parties to submit to arbitration before the American Arbitration Association ("AAA") in St. Louis, Missouri, and a forum selection clause requiring the parties to litigate in the Eastern District of Missouri. MSI has commenced arbitration proceedings against Titan in St. Louis, and Titan now moves for a preliminary injunction to stay arbitration and, in the alternative, to compel defendants to comply with AAA rules regarding selection of an arbitrator, and for attorney's fees. MSI moves to dismiss this action based on the License Agreement's arbitration clause. Alternatively, MSI moves to dismiss or transfer this action based on the License Agreement's forum selection clause. For the following reasons, Titan's motions are denied, and MSI's motion to dismiss the action in favor of arbitration is granted.
II. BACKGROUND
A. The Agreement
On or about December 12, 1996, MSI and Titan entered into the License Agreement, under which Titan agreed to make payments to MSI in exchange for a license to operate a retail pharmacy at a designated location in Brooklyn, New York, and to use the Medicine Shoppe® System and the Medicine Shoppe trademarks. Titan's obligations were guaranteed by George Mitsopoulos' parents, Apostolos and Efrosini Mitsopoulos. The License Agreement contains the following arbitration clause:
See License Agreement, Ex. A to 1/23/06 Declaration of Cliona A. Levy, Counsel to MSI, in Support of Motion to Dismiss or to Transfer ("1/23/06 Levy Decl.").
See 1/6/06 Declaration of Levy in Opposition to Motion for Preliminary Injunction ("1/6/06 Levy Decl.") ¶ 3. On December 1, 2004, MSI brought suit in the United States District Court for the Eastern District of New York against Apostolos and Efrosini Mitsopoulos for breach of their guaranty of Titan's obligations to MSI (the "Eastern District Action"). See id. ¶ 10.
All controversies, disputes or claims arising between us and/or our officers, directors, parents, affiliates, agents, employees or attorneys (in their representative capacity) and you and/or your shareholders, partners, officers, directors or employees shall be submitted for arbitration to the St. Louis, Missouri office of the American Arbitration Association on demand of either of us. Such arbitration proceedings shall be conducted in St. Louis, Missouri and, except where otherwise provided in this Agreement, such claims shall be heard by one arbitrator in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association.
License Agreement § 14(G).
The arbitration clause does not apply to any request for "a temporary restraining order or preliminary injunctive relief against threatened or actual conduct that would cause [Titan] or [MSI] irreparable loss or damages," or "claims related to or based on the Marks, any lease or sublease of real estate . . . or the enforceability of [certain] restrictive covenants." The arbitration clause also provides that both parties "agree to be bound by the provisions of any statute of limitations provided herein." In a separate clause, the License Agreement provides that notice of any claim "must be made within one (1) year from the occurrence of the facts giving rise to such claim."
Id. § 14(F)-(G).
Id.
Id. § 14(K).
The License Agreement also contains a forum selection clause which provides that any cause of action "which is not required to be arbitrated pursuant hereto . . . shall be brought in the state or federal courts of general jurisdiction in St. Louis, Missouri, and [MSI and Titan] hereby waive any objection to the jurisdiction or venue of such courts." The License Agreement incorporates by reference a Uniform Franchise Offering Circular ("UFOC"). The UFOC states:
Id. § 14(I).
See id. §§ 1(B), 14(N).
THE FRANCHISE AGREEMENT PERMITS THE FRANCHISEE TO ARBITRATE WITH MSI ONLY IN MISSOURI. OUT OF STATE ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO ARBITRATE WITH MSI IN MISSOURI THAN IN YOUR HOME STATE. Plaintiffs allege that they read the UFOC. The License Agreement also provides that it is governed by Missouri law.
UFOC at 1, Ex. B to 1/23/06 Levy Decl. (emphasis in original).
See First Amended Complaint ("Compl.") ¶ 19(b).
See License Agreement § 14(H).
B. St. Louis Arbitration
On or about March 16, 2005, MSI commenced arbitration proceedings against Titan in St. Louis, Missouri, alleging that Titan had breached its payment obligations under the License Agreement (the "St. Louis Arbitration"). On April 8, 2005, Titan submitted its response and counterclaims against MSI in the St. Louis Arbitration. On April 14, 2005, Titan sought a stay of the St. Louis Arbitration from the AAA, which the AAA denied on May 10, 2005. Over Titan's objections, the AAA appointed Jay Kanzler as arbitrator. Notwithstanding its attempts to obtain a stay and objections to Kanzler's appointment, Titan participated in the St. Louis Arbitration proceedings until approximately December 8, 2005. The arbitration hearing is scheduled to begin on May 15, 2006.
See 1/6/06 Levy Decl. ¶ 4.
See id. ¶ 5. See also Response and Counterclaims, Ex. C to 12/20/05 Declaration of Levy in Opposition to Motion to Stay Arbitration.
See 1/6/06 Levy Decl. ¶¶ 6-7.
See 10/19/05 Letter from Richard Pu, Counsel to Titan to Jennifer Bell, for Renee R. Mobley, Case Manager, AAA, Appendix to 12/14/05 Pu Declaration in Support of Titan's Order to Show Cause at 34-36 (objecting to Kanzler's qualifications and impartiality); 12/28/05 Letter from Bell to Pu and Jake A. Palumbo, Counsel to MSI, attached as Ex. D. to 1/6/06 Levy Decl. (reaffirming appointment of Kanzler over Titan's objections).
See 2/13/06 Declaration of Richard Pu in Opposition to MSI's Motion to Dismiss ("2/13/06 Pu Decl.") ¶¶ 3-5.
See 1/6/06 Memorandum of Law in Opposition to Plaintiffs' Motion for a Preliminary Injunction for a Stay of Arbitration ("1/6/06 Def. Mem.") at 4 n. 5.
C. State Court Action
On December 14, 2005, Titan commenced an action against MSI in the Supreme Court of the State of New York, County of New York (the "State Court Action"), alleging substantially the same claims as those alleged in this action. That same day, Titan moved by order to show cause in the State Court Action for a temporary restraining order ("TRO") staying the St. Louis Arbitration, which that court denied on December 19, 2005.
See 1/6/06 Levy Decl. ¶ 15.
See id.
D. Federal Court Action
On December 16, 2005, Titan filed this action against MSI, Cardinal Health, Inc. ("Cardinal Health"), and the AAA. Titan seeks to recover damages due to alleged misconduct by MSI and Cardinal Health on a variety of contract, tort, and statutory theories. The claims arise from substantially the same facts as the counterclaims alleged by Titan in the St. Louis Arbitration. The Complaint also seeks a stay of the St. Louis Arbitration, on the ground that the arbitration clause was fraudulently induced, and an injunction compelling the AAA to "comply with its own rules" regarding arbitrator bias. Titan alleges that the AAA improperly rejected two potential arbitrators, and selected Kanzler without questioning him with regard to potential bias.
See Compl. ¶¶ 51-94.
Id. ¶¶ 1, 20-27.
See id. ¶ 40.
On December 16, 2005, Titan applied for a TRO to stay the St. Louis Arbitration and for injunctive relief with respect to the AAA. District Judge Laura Taylor Swain, acting as the Part I Judge, denied Titan's application for a TRO without prejudice and ordered defendants to show cause why the relief sought by Titan should not be granted. On December 19, 2005, MSI removed the State Court Action to this Court. At the December 20, 2005 hearing, this Court denied Titan's request for a TRO, dismissed Titan's claims against the AAA with prejudice, and dismissed the now-removed State Court Action as duplicative. On December 21, 2005, this Court denied Titan's motion for reconsideration of its order denying the TRO, noting that Titan had failed to disclose that it had sought the same relief in the State Court Action in violation of Local Rule 6.1(d) of the United States District Court for the Southern District of New York.
See id. ¶ 16.
See 12/20/05 Transcript of Hearing before this Court ("12/20/05 Tr.") at 24-31.
III. LEGAL STANDARD
A. Motion to Dismiss
A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure should be granted only if "`it appears beyond doubt that the plaintiff can prove no set of facts in support of [its] claim which would entitle [it] to relief.'" When deciding a motion to dismiss, courts must accept all factual allegations in the complaint as true, and draw all reasonable inferences in plaintiff's favor. Although the plaintiff's allegations are taken as true, the claim may still fail as a matter of law if it appears beyond doubt that the plaintiff can prove no set of facts in support of its claim which would entitle it to relief, or if the claim is not legally feasible. A district court may dismiss a plaintiff's claims with prejudice in favor of arbitration.
Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 100 (2d Cir. 2005) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
See Ontario Pub. Serv. Employees Union Pension Trust Fund v. Nortel Networks Corp., 369 F.3d 27, 31 (2d Cir. 2004) (citation omitted).
See, e.g., Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers Lybrand, L.L.P., 322 F.3d 147, 158 (2d Cir. 2003).
See, e.g., Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 86 (2000).
B. Preliminary Injunction
"[A] preliminary injunction is an extraordinary and drastic remedy." To obtain a preliminary injunction, a party must demonstrate (1) probability of irreparable harm in the absence of injunctive relief and (2) either (a) a likelihood of success on the merits of the claim, or (b) "sufficiently serious questions going to the merits to make them a fair ground for litigation plus a balance of hardships tipping decidedly toward the party requesting the preliminary relief." "The party seeking the injunction must show a `clear' or `substantial' likelihood of success where the injunction sought is mandatory — i.e., it will alter, rather than maintain, the status quo."
Mazurek v. Armstrong, 520 U.S. 968, 972 (1997).
Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 24 (2d Cir. 2004) (quotation marks and citation omitted).
Id.
C. Arbitrability
The determination of whether a dispute is arbitrable under the Federal Arbitration Act ("FAA") comprises two questions: "(1) whether there exists a valid agreement to arbitrate at all under the contract in question . . . and if so, (2) whether the particular dispute sought to be arbitrated falls within the scope of the arbitration agreement." To find a valid agreement to arbitrate, a court must apply the "generally accepted principles of contract law." "[A] party is bound by the provisions of a contract that [it] signs, unless [it] can show special circumstances that would relieve [it] of such obligation."
9 U.S.C. § 3.
Hartford Accident Indemnity Co. v. Swiss Reinsurance Am. Corp., 246 F.3d 219, 226 (2d Cir. 2001) (quotation marks omitted).
Genesco, Inc. v. T. Kakiuchi Co., 815 F.2d 840, 845 (2d Cir. 1987).
Id.
1. Valid Agreement to Arbitrate
In Prima Paint Corporation v. Flood Conklin Manufacturing Company, the Supreme Court held that "arbitration clauses as a matter of federal law are `separable' from the contracts in which they are embedded, and that where no claim is made that fraud was directed to the arbitration clause itself, a broad arbitration clause will be held to encompass arbitration of the claim that the contract itself was induced by fraud." The Supreme Court has recently clarified that even where the party resisting arbitration claims that the agreement as a whole is void, "unless the challenge is to the arbitration clause itself, the issue of the contract's validity is considered by the arbitrator in the first instance."
388 U.S. 395, 402 (1967).
Buckeye Check Cashing, Inc. v. Cardegna, 126 S.Ct. 1204, 1209 (Feb. 21, 2006). Accord Rubin v. Sona Int'l Corp., No. 05 Civ. 6305, 2006 WL 525658, at *2 (S.D.N.Y. Mar. 3, 2006) (applying Buckeye and enforcing arbitration clause).
Where "the claim is fraud in the inducement of the arbitration clause itself — an issue which goes to the `making' of the agreement to arbitrate — the federal court may proceed to adjudicate it." In such a situation there "must be some substantial relationship between the fraud or misrepresentation and the arbitration clause in particular." This substantial relationship "requires more than a mere claim that the `arbitration clause is an element of the scheme to defraud;' it must include `particularized facts specific to the . . . arbitration clause which indicate how it was used to effect the scheme to defraud.'" A party may not "establish a connection between the alleged fraud and the arbitration clause in particular merely by adding the allegation that the arbitration clause was a part of the overall scheme to defraud."
Prima Paint, 388 U.S. at 403-04.
Campaniello Imp., Ltd. v. Saporiti Italia S.p.A., 117 F.3d 655, 667 (2d Cir. 1997).
Garten v. Kurth, 265 F.3d 136, 143 (2d Cir. 2001) (quoting Campaniello, 117 F.3d at 667).
Id. at 143-44 (citing Campaniello, 117 F.3d at 667).
To establish fraudulent inducement under Missouri law, a plaintiff must show: "(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or his ignorance of its truth; (5) the speaker's intent that the representation should be acted on by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of the falsity of the representation; (7) the hearer's reliance on the representation being true; (8) the hearer's right to rely thereon; and (9) the hearer's consequent and proximately caused injury."
ARE Sikeston Ltd. P'ship v. Weslock Nat., Inc., 120 F.3d 820, 829-30 (8th Cir. 1997) (citing Slone v. Purina Mills, Inc., 927 S.W.2d 358, 371 (Mo.Ct.App. 1996); State ex. rel. PaineWebber, Inc. v. Voorhees, 891 S.W.2d 126, 128 (Mo. 1995) (en banc)).
2. Scope of Arbitration Clause
Because there is "a strong federal policy favoring arbitration," the Second Circuit has emphasized that
any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Accordingly, [f]ederal policy requires us to construe arbitration clauses as broadly as possible. We will compel arbitration unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.
Ace Capital Re Overseas Ltd. v. Central United Life Ins. Co., 307 F.3d 24, 28 (2d Cir. 2002) (quotation marks and citations omitted).
Collins Aikman Prods. Co. v. Building Sys., Inc., 58 F.3d 16, 19 (2d Cir. 1995).
"[A] court should decide at the outset whether `the arbitration agreement [is] broad or narrow.' If broad, then there is a presumption that the claims are arbitrable."
Id. at 20 (citations omitted).
To determine if an arbitration clause is broad "a court must determine whether, on the one hand, the language of the clause, taken as a whole, evidences the parties' intent to have arbitration serve as the primary recourse for disputes connected to the agreement containing the clause, or if, on the other hand, arbitration was designed to play a more limited role in any future dispute." "[C]ourts have held that where an agreement contains a broad arbitration clause, in order to remove a specific dispute from arbitration the language of the agreement purporting to do so must be `clear and unambiguous' or `unmistakably clear.'"
Louis Dreyfus Negoce S.A. v. Blystad Shipping Trading Inc., 252 F.3d 218, 224 (2d Cir. 2001) (citation omitted).
Gangemi v. General Elec. Co., 532 F.2d 861, 865 (2d Cir. 1976) (quoting Int'l Ass'n of Mach. Auto. Workers v. General Elec. Co., 406 F.2d 1046 (2d Cir. 1969)).
IV. DISCUSSION
A. Fraudulent Inducement of the Arbitration Clause
Titan offers two theories of fraudulent inducement of the arbitration clause. First, Titan argues that the arbitration clause was fraudulently induced because the agreement contains an invalid one-year limitations period. Titan alleges that MSI knew that the one-year limitations period was void under Missouri law. Titan alleges that MSI included the limitations period so that "franchisees would refrain from asserting stale claims against MSI based on the misperception that such claims were barred by the one-year statute of limitation. But MSI itself could not be so barred, because it could assert the invalidity of the provision if need be." The arbitration clause states that both parties "agree to be bound by any statute of limitations provisions herein." Therefore, Titan argues that the arbitration clause is tainted by fraud.
See Compl. ¶ 27. Under Missouri law, "All parts of any contract or agreement hereafter made or entered into which either directly or indirectly limit or tend to limit the time in which any suit or action may be instituted, shall be null and void." Mo. Rev. Stat. § 431.030.
Compl. ¶ 27(c).
License Agreement § 14(K).
Under Prima Paint, Titan must arbitrate this claim. The contractual limitations period applies to any claim arising out of the License Agreement, whether arbitrable or nonarbitrable. Titan does not allege that it was induced to agree to arbitrate based on the one-year limitations clause or any fraud related to that limitations clause. Because Titan's claim does not "go to the `making' of the agreement to arbitrate," the issue must be submitted to the arbitrator. Furthermore, the Complaint does not allege that Titan relied on MSI's promise to abide by the limitations provision when it signed the License Agreement.
See id. § 14(G).
See Buckeye Check Cashing, 126 S.Ct. at 1209 (under Prima Paint, parties' agreement to arbitrate was not rendered invalid by their agreement to a usurious finance charge).
Prima Paint, 388 U.S. at 403-04. Accord Campaniello, 117 F.3d at 667.
Second, Titan alleges that Clair Flaten, MSI's franchise director, fraudulently induced the arbitration clause through his oral statement to Mitsopoulos "that the reason for arbitration was that it was less expensive for franchises if they ever had any claims against MSI." Titan alleges that "in fact, as Flaten knew, the provision was there to make it less expensive for MSI to sue franchisees."
Compl. ¶ 28.
Id.
Titan's second theory does not support a claim of fraudulent inducement. Titan does not allege that Flaten's statement was in fact false. Titan does not allege that arbitration is more expensive for franchisees than litigation. Any representation by MSI regarding the cost of arbitration for Titan would not have been actionable because it would have been "at best a statement of opinion or one regarding possible future consequences if the arbitration clause were to be invoked."
Titan's allegations could be construed as a claim that Flaten's statement was misleading because Flaten did not disclose that arbitration made it easier for MSI to pursue claims against franchisees. But Titan does not allege that any such omission was material, or that it reasonably relied on any assumption to the contrary when it agreed to arbitrate.
Allied Sanitation, Inc. v. Waste Management Holdings, Inc., 97 F. Supp. 2d 320, 335 (E.D.N.Y. 2000) (rejecting claim that arbitration clause was fraudulently induced by the statement that it "won't cost you anything").
Titan's claim also fails because Titan has not alleged that it was injured as a result of any misstatement by Flaten about arbitration. Titan has argued in its briefs that it has suffered injury because Missouri is an inconvenient forum. But the UFOC contains a clear warning to the franchisee that "out of state arbitration may force you to accept a less favorable settlement for disputes" and "[i]t may also cost more to arbitrate with MSI in Missouri than in your home state." Mitsopoulis read the UFOC and could not have reasonably relied on any statement by Flaten to the contrary.
See 2/13/06 Pl. Opp. at 23.
UFOC at 1 (emphasis omitted).
See Larry's United Super, Inc. v. Werries, 253 F.3d 1083 (8th Cir. 2001) (applying Missouri law and rejecting the argument that arbitration clause was fraudulently induced by oral misstatements which were contradicted by the written agreement). Because Titan has not demonstrated that the arbitration clause is invalid, I do not reach MSI's argument that Titan has waived its right to contest arbitration through participation in the St. Louis arbitration proceedings.
B. Scope of Arbitration Clause
The License Agreement's arbitration clause requires the parties to arbitrate " all controversies, disputes or claims arising between" them, with certain limited exceptions. This clause "evidences the parties' intent to have arbitration serve as the primary recourse for disputes connected to the agreement." Therefore, Titan must show that any exclusion to the parties' broad agreement to arbitrate is "unmistakably clear."
License Agreement § 14(I) (emphasis added).
Louis Dreyfus Negoce, 252 F.3d at 224 (citation omitted). Accord Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 n. 13 (1985) ("the exclusion of some areas of possible dispute from the scope of an arbitration clause does not serve to restrict the reach of an otherwise broad clause in the areas in which it was intended to operate").
Gangemi, 532 F.2d at 865.
Titan argues that its claim for "breach of contract, insofar as that claim pertained to MSI's failure to negotiate a new lease for Titan" is outside the scope of the arbitration clause because it falls within the exception for "claims related to or based on . . . any lease or sublease of real estate." But Titan's claim is not related to "any lease," rather, it is based on MSI's failure to negotiate a lease. The Complaint alleges that MSI's obligation to negotiate a new lease with Titan's landlord arose "[u]nder Paragraph C of the License Agreement," not under any lease agreement. This Court must resolve doubts in favor of arbitrability. Titan must submit its claim related to MSI's failure to negotiate a new lease to the arbitrator.
2/13/06 Pl. Opp. at 3-4. Titan concedes that the remainder of its claims are within the scope of the arbitration clause, except for its claim that the arbitration clause is invalid and its request for injunctive relief related to the AAA. See id.
Compl. ¶ 37.
See Collins Aikman, 58 F.3d at 19.
Titan has already asserted this claim as a counterclaim in the St. Louis Arbitration. See 3/3/06 Letter from Levy to the Court at 3.
C. Request for Injunctive Relief
Because this Court finds that Titan's claim that the arbitration clause is invalid is without merit, Titan's request for a preliminary injunction to stay arbitration is denied. Titan also moves for a mandatory injunction to compel compliance with AAA rules on the process for selecting an arbitrator. But "where the applicable rules of arbitration require that an independent panel or board handle and determine complaints of arbitrator bias or impartiality, the decision of that panel `will generally be reviewable by a district court only after an award has been made.'" This Court's authority to remedy arbitrator bias is limited to setting aside the award after it has been rendered. Therefore, Titan's request for injunctive relief related to the AAA is denied.
Application of York Hanover Holding, A.G. v. American Arbitration Ass'n, No. 92 Civ. 1643, 1993 WL 159961, at *2 (S.D.N.Y. May 11, 1993) (citing Sanko S.S. Co. v. Cook Industries, Inc., 495 F.2d 1260, 1264 n. 4 (2d Cir. 1973). Accord San Carlo Opera Co. v. Conley, 72 F. Supp. 825, 833 (S.D.N.Y. 1946), aff'd, 163 F.2d 310 (2d Cir. 1947).
See Michaels v. Mariforum Shipping, 624 F.2d 411, 414 n. 4 (2d Cir. 1980) (stating in dictum that "it is well established that a district court cannot entertain an attack upon the qualifications or partiality or arbitrators until after the conclusion of the arbitration and the rendition of an award"); 1109580 Ontario, Inc. v. Bear, Stearns Co., Inc., No. 02 Civ. 7690, 2003 WL 470308, at *3 (S.D.N.Y. Feb. 25, 2003) (refusing to remedy alleged breach of the arbitration process prior to its conclusion); Marc Rich Co. v. Transmarine Seaways Corp., 443 F. Supp. 386, 387-88 n. 3 (S.D.N.Y. 1978) ("[n]o section of the [Federal Arbitration] Act . . . provides for judicial scrutiny of an arbitrator's qualifications in any proceeding other than an action to confirm or vacate an award").
D. Motion to Dismiss
Where all of the issues raised in the Complaint must be submitted to arbitration, the Court may dismiss an action rather than stay proceedings. In making this determination, the Second Circuit urges district courts to consider the fact that "dismissal renders an order appealable under [9 U.S.C.] § 16(a)(3), while the granting of a stay is an unappealable interlocutory order under [9 U.S.C.] § 16(b)." MSI moves to dismiss, and does not request a stay. That motion is granted. I do not reach MSI's alternative request that the action be dismissed or transferred based on the License Agreement's forum selection clause because it is moot.
See Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992).
Salim Oleochemicals v. M/V SHROPSHIRE, 278 F.3d 90, 93 (2d Cir. 2002).
Titan argues that the action may proceed against Cardinal Health. Cardinal Health has not joined in MSI's motion to dismiss or appeared in this action. Therefore, the action against Cardinal Health remains in this Court.
The parties dispute whether Cardinal Health was properly served when Titan served Sonnenschein Nath Rosenthal LLP ("Sonnenschein"), MSI's counsel. Although Edward Reich of Sonnenschein stated that he appeared "for the defendants" at a hearing before Judge Laura Taylor Swain, 12/16/05 Tr. of Hearing before Judge Swain at 53, Sonnenschein has clarified that it does not represent Cardinal Health. See 2/23/06 Reply Memorandum of Law in Further Support of Defendant Medicine Shoppe International, Inc.'s Motion to Dismiss or Transfer at 1. Titan has not moved for a default judgment against Cardinal Health.
E. Attorney's Fees
Titan requests attorney's fees under section 1927 of Title 28 of the United States Code, arguing that MSI has unnecessarily multiplied the proceedings by failing to exchange letters prior to filing its motion to dismiss in violation of this Court's individual practices and procedures. But, at the hearing on December 20, 2005, this Court granted permission to MSI to file a motion to dismiss, eliminating the need for a letter exchange. Titan's request is denied.
See 12/20/05 Tr. at 23.
V. CONCLUSION
For the reasons set forth above, MSI's motion to dismiss Titan's claims against it is granted. Titan's motions for preliminary injunctions and for attorney's fees are denied. The Clerk of the Court is directed to close these motions [Docket Nos. 4, 9, 29].
SO ORDERED.