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VetSam Biopharma, Inc. v. ENSO Discoveries LLC

United States District Court, D. Kansas

December 17, 2019

VETSAM BIOPHARMA, INC., Plaintiffs,
v.
ENSO DISCOVERIES, LLC, et al., Defendants.

          MEMORANDUM & ORDER ON MOTION TO STAY

          HON. KENNETH G. GALE U.S. MAGISTRATE JUDGE.

         Now before the Court is the Motion to Stay Discovery (Doc. 22) filed by Defendant Kansas Regenerative Medicine Center, LLC (hereinafter “Defendant”). Having reviewed the submissions of the parties, Defendants' motion is DENIED for the reasons set forth below.

         FACTUAL BACKGROUND

         Defendant is a stem cell treatment center providing adult stem cell therapy treatments. Plaintiff contends that Defendant's process directly infringes the treatment methods claimed in a patent held by Plaintiff, the “‘202 Patent.” (Doc. 1, at 14, 20.)

         Defendant moves the Court for an Order stay of the present action while awaiting the resolution of a later-filed patent infringement case Plaintiff brought in the Central District of California against California Stem Cell Treatment Center, another clinic performing stem cell treatments, VetStem Biopharma, Inc. v. California Stem Cell Treatment Center, Inc., No. 19-4728 (hereinafter “the California case”). Defendant argues that allowing the California case “to proceed with [sic] promote judicial economy and ultimately, save the Court, counsel and parties time and resources by deciding identical issues in a single action.” (Doc. 23, at 1.)

         ANALYSIS

         “The decision to stay discovery and other pretrial proceedings is firmly vested in the sound discretion of the trial court.” Toney v. Harrod, No. 15-3209-EFM-TJJ, 2018 WL 5830398, at *1 (D. Kan. Nov. 7, 2018) (citing Pet Milk Co. v. Ritter, 323 F.2d 586, 588 (10th Cir. 1963); McCoy v. U.S., No. 07-2097-CM, 2007 WL 2071770, at *2 (D. Kan. July 16, 2007)). This power is part of the Court's inherent power to control its docket. Ed Tobergte Assocs. Inc. v. Zide Sport Shop of Ohio, Inc., 83 F.Supp.2d 1197, 1198 (D. Kan. 1999) (citation omitted).

         That stated, Tenth Circuit has concluded that “the right to proceed in court should not be denied except under the most extreme circumstances.” Commodity Futures Trading Comm'n v. Chilcott Portfolio Mgmt., Inc., 713 F.2d 1477, 1484 (10th Cir. 1983). For instance, the District of Kansas generally does not favor staying discovery pending a ruling on a dispositive motion. McCoy, 2007 WL 2071770, at *2.

         As discussed above, there is an allegedly similar case pending in the Central District of California against California Stem Cell Treatment Center, another clinic performing stem cell treatments, VetStem Biopharma, Inc. v. California Stem Cell Treatment Center, Inc., No. 19-4728. Defendant contends that the “first-to-file” rule validates staying the proceedings in the present action.

Federal courts have developed a general rule to apply to situations in which essentially the same issues and litigants are involved in two substantially identical causes of action before federal courts in different districts. The first-to-file rule provides that the court where jurisdiction first attaches should make the determination of the appropriate venue to decide the case, and the second court will decline to act until proceedings in the first court terminate. See Cessna Aircraft Co. v. Brown, 348 F.2d 689, 692 (10th Cir.1965); see also Hospah Coal Co. v. Chaco Energy Co., 673 F.2d 1161 (10th Cir.1982); Custom Energy, LLC v. Liebert Corp., No. Civ. A. 98- 2077-GTV, 1998 WL 295610 (D.Kan. June 2, 1998).

Tobergte Assocs., 83, F.Supp.2d at 1198.

         Although the present action was filed before the California action (yet on the same day), Defendant argues that this case should be stayed “because … the equities and principals of judicial economy underlying the first to file rule weigh in favor of allowing resolution of the California Action before proceeding with the claims against KRMC.” (Doc. 23, at 2.) More specifically, Defendant continues that

(1) the Plaintiff is asserting identical claims in both suits; (2) Defendant KRMC is postured substantially similar to the Defendant in the California Action; and (3) judicial economy will be served by allowing the California Action to proceed. Finally, and perhaps most importantly, the parties in the California Action are the larger and more important ‘players' in this dispute, and fairness and equity favor having those parties be the ones that spend the money and time to first decide the issues of infringement and validity of the patent in question, before a small ...

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