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Chemence Medical Products, Inc. v. Medline Industries, Inc.

United States District Court, N.D. Georgia, Atlanta Division

February 12, 2015

CHEMENCE MEDICAL PRODUCTS, INC., Plaintiff,
v.
MEDLINE INDUSTRIES, INC., Defendant

Decided February 11, 2015.

For Chemence Medical Products, Inc., Plaintiff: Robert D. Wilson, LEAD ATTORNEY, PRO HAC VICE, Wilson & Wilson, Co., LPA, Chagrin Falls, OH.

For Medline Industries, Inc., Defendant: Henry D. Fellows, Jr., Kevin P. Weimer, Fellows La Briola, LLP, Atlanta, GA.

For Piedmont Hospital, Inc., Objector: Kyler Lee Wise, LEAD ATTORNEY, Brown, Beloin, Blum & Wise, LLC, Atlanta, GA.

For Chemence Medical Products, Inc., Counter Defendant: Robert D. Wilson, LEAD ATTORNEY, Wilson & Wilson, Co., LPA, Chagrin Falls, OH.

Page 1377

OPINION AND ORDER

Thomas W. Thrash, United States District Judge.

This is a breach of contract action. It is before the Court on the Defendant's

Page 1378

Motion to Compel [Doc. 103], the Defendant's Motion for Extension of Time to Move for Summary Judgment on the Grounds That Plaintiff has Suffered no Actual Damages [Doc. 131], the Defendant's Motion for Summary Judgment [Doc. 134], the Plaintiff's Motion for Partial Summary Judgment [Doc. 150 and Doc. 167], the Defendant's Motion for Leave to File Declarations Authenticating Expert Reports [Doc. 196], the Defendant's Motion for Leave to File a Sur-Reply in Opposition to Plaintiff's Motion for Partial Summary Judgment [Doc. 197], and the Defendant's Motion to Exclude Opinions and Testimony of Dr. Seamas Grant [Doc. 210 and Doc. 230]. For the reasons stated below, the Defendant's Motion to Compel, the Defendant's Motion for Extension of Time, the Defendant's Motion for Leave to File Declarations, and the Defendant's Motion to Exclude Opinions and Testimony of Dr. Grant are DENIED as moot. The Defendant's Motion for Summary Judgment is GRANTED. The Plaintiff's Motion for Partial Summary Judgment is GRANTED in part and DENIED in part. The Defendant's Motion for Leave to File a Sur-Reply is DENIED.

I. Background

The Plaintiff, Chemence Medical Products, Inc., manufactures medical adhesives.[1] The Defendant, Medline Industries, Inc., distributes medical products.[2] On August 1, 2010, Medline and Chemence entered into a Supply Agreement (" the Agreement" ), under which Chemence would supply a surgical closure adhesive to Medline.[3] The Agreement provided that Chemence would supply " a 2-octyl cyanoacrylate surgical closure adhesive with the exact specifications, or substantially similar specifications" as those set forth in the Agreement.[4] Chemence sold that product to Medline under the trade name Octylseal, but also manufactured the same product under two other names -- Dermaᙗ QS and Sureਗ਼ II -- consistent with the Agreement.[5]

The Agreement's terms required Medline to pay Chemence $400,000 upon FDA approval of the product and an additional $227,000 upon execution of the Agreement.[6] Under the Agreement, Medline was required to purchase a minimum annual amount of the product and, as long as Medline met that requirement, Chemence was required to supply the product for a fixed transfer price of $5.50 through December 31, 2012.[7] After December 31, 2012, Chemence could increase the transfer price annually to reflect changes in raw material, labor costs, and manufacturing, provided it gave Medline thirty days' notice.[8] The Agreement then gave Medline the right to reject price increases and terminate the contract upon thirty days' notice, with no further liability.[9]

On November 28, 2012, Chemence notified Medline that sales of Octylseal could be subject to a 2.3% federal excise tax on medical devices.[10] Medline expressed concern about Chemence passing this ...


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