United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
J. Lodge United States District Judge
before the Court is Defendants' Motion to Dismiss Idaho
State Law Claims and to Compel Arbitration. (Dkt. 9.) The
parties filed responsive briefing and the motion is now ripe.
Having fully reviewed the record herein, the Court finds that
the facts and legal arguments are adequately presented in the
briefs and record. Accordingly, in the interest of avoiding
further delay, and because the Court conclusively finds that
the decisional process would not be significantly aided by
oral argument, the Motion shall be decided on the record
before the Court without oral argument.
AND PROCEDURAL BACKGROUND
Walkwell International, Inc. (“Walkwell”) is an
Idaho corporation that designs medical support devices. (Dkt.
1-4, Ex. D, Complaint, ¶ 1.) Defendant DJO Global, Inc.
(“DJO”) is a Delaware corporation with its
principal place of business in Vista, California.
Id. at ¶ 2. DJO is the largest nonsurgical
orthopedic rehabilitation device company in the United
States. Id. at ¶ 12.
February 14, 1997, Walkwell and Johnson & Johnson
Professional, Inc. (“J&J”) entered into a
License Agreement. Id. at ¶ 4. Walkwell owned
patents and a trademark relating to the “Dorsiwedge
Night Splint” (the “splint”). Id.
at ¶ 4-10. Pursuant to the Licensing Agreement, Walkwell
licensed the splint patents and trademark for use by J&J.
Id. at ¶ 4-10. In exchange for the exclusive
license to produce and sell the splint, J&J agreed to pay
certain royalties to Walkwell. J&J later transferred its
interests, rights, and responsibilities under the License
Agreement to DJO, who is the contractual successor to J&J
with respect to the License Agreement. Id. at ¶
to the License Agreement, J&J and then DJO manufactured
and sold the splint, paying Walkwell royalties. Id.
at ¶ 11-14. However, in 2015, Walkwell alleges that DJO
violated the License Agreement when it stopped making royalty
payments, but continued to manufacture and sell the split.
Id. at ¶ 15.
11, 2017, as a result of these alleged violations, Walkwell
filed suit against DJO in the Fourth Judicial District of
Idaho. (Dkt. 1-4, Ex. D, Complaint.) In its Complaint,
Walkwell alleges trademark infringement under the Lanham Act
and common law, patent infringement, and violations of the
Idaho Consumer Protection Act (ICPA). (Dkt. 1-4, Ex. D,
Complaint.) On June 27, 2017, DJO filed a Notice of Removal
to this Court pursuant to 28 U.S.C. §§ 1441 and
1446. (Dkt. 1.) DJO removed the case based on this Court
having federal question over the Lanham Act and patent claims
and supplemental jurisdiction over the remaining claims.
28, 2017, DJO filed its Motion to Dismiss Idaho State Law
Claims and to Compel Arbitration. (Dkt. 9.) On August 16,
2017, Walkwell filed an Objection and Cross-Motion to Remand.
(Dkt. 12.) The Motion is ripe for the Court's
consideration and the Court finds as follows.
motion to dismiss made pursuant to Federal Rule of Civil
Procedure 12(b)(6) tests the sufficiency of a party's
claim for relief. When considering such a motion, the
Court's inquiry is whether the allegations in a pleading
are sufficient under applicable pleading standards. Federal
Rule of Civil Procedure 8(a) sets forth minimum pleading
rules, requiring only a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2).
general, a motion to dismiss will only be granted if the
complaint fails to allege “enough facts to state a
claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged. The plausibility standard is not
akin to a ‘probability requirement, ' but asks for
more than a sheer possibility that a defendant has acted
lawfully.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009)(citations omitted).
from factual insufficiency, a complaint is also subject to
dismissal under Rule 12(b)(6) where it lacks a cognizable
legal theory, Balistreri v. Pacifica Police Dept.,
901 F.2d 696, 699 (9th Cir. 1990), or where the allegations
on their face “show that relief is barred for some
legal reason.” Jones v. Bock, 549 U.S. 199,
the Court “must take all of the factual allegations in
the complaint as true, ” it is “not bound to
accept as true a legal conclusion couched as a factual
allegations.” Twombly, 550 U.S. at 555.
Therefore, “conclusory allegations of law and
unwarranted inferences are insufficient to defeat a motion to
dismiss for failure to state a claim.” Caviness v.
Horizon Comm. Learning Cent., Inc., 590 F.3d 806, 811-12
(9th Cir. 2010)(citation omitted).
ruling on a motion to dismiss, the court must normally
convert a Rule 12(b)(6) motion into one for summary judgment
under Rule 56 if the court considers evidence outside of the
pleadings. United States v. Ritchie, 342 F.3d 903,
907 (9th Cir. 2003). However, a court may consider
attachments to the complaint and documents referred to in the
complaint, where the authenticity of such documents are not
in question. Cooper v. Pickett, 137 F.3d 616, 622-23
(9th Cir. 1997) (citing Branch v. Tunnel, 14 F.3d
449, 453-54 (9th Cir. 1994)).
alleges DJO violated the Lanham Act and common law by
infringing on its trademark, committed patent infringement,
and violated the Idaho Consumer Protection Act (ICPA). (Dkt.
1.) DJO contends that Walkwell should be compelled to
arbitrate these claims as the parties agreed in the Licensing
Agreement. (Dkt. 9, 14.) DJO further contends that
Walkwell's state law claims, brought under Idaho law,
must be dismissed because the Licensing Agreement contains a
choice of law provision in which the parties agreed that
their relationship would be controlled by the law of New
Jersey. (Dkt. 9, 14.)
response to DJO's Motion, Walkwell argues that the
Licensing Agreement's arbitration and choice of law
provisions are unconscionable. Walkwell further ...