United States District Court, W.D. Missouri, Western Division
Fernando J. Gaitan, Jr. United States District Judge
before the Court is defendants’ motion to dismiss (Doc.
Beyond Batten Disease Foundation (hereinafter
“BBDF”) brought suit against defendant
Children’s Mercy Hospital (hereinafter
“CMH”), Stephen F. Kingsmore, Darrell L.
Dinwiddie, and Neil A. Miller (employees of CMH) asserting
three causes of action: Claim one for unjust enrichment;
Claim two for tortious interference; and Claim three for
conversion of intellectual property. BBDF is pursuing all of
these claims under Missouri law.
a 501(c)(3) non-profit charitable foundation located in Texas
and formed under the laws of Texas. BBDF’s mission is
to eradicate Batten disease (a rare genetic,
neurodegenerative condition). BBDF wanted to commercialize a
rare disease genetic test. In order to do so, it decided to
partner with National Center for Genome Resources
(hereinafter “NCGR”) based in New Mexico. BBDF
funded the research for NCGR to develop the test. Defendants
Stephen F. Kingsmore (hereinafter “Kingsmore”),
Darrell L. Dinwiddie (hereinafter “Dinwiddie”),
and Neil A. Miller (hereinafter “Miller”) were on
the research team at NCGR. BBDF had an agreement with NCGR
that BBDF retained the intellectual property that resulted
from the project.
needed a partner to help them commercialize the genetic test.
With Kingsmore’s assistance, BBDF started negotiating
with CMH about a joint venture to use the genetic test. CMH
planned to open a pediatric genome center. In January 2011,
CMH decided to hire Kingsmore, Dinwiddie, and Miller away
from NCGR to work on the pediatric genome center CMH was
developing. CMH and BBDF continued negotiations regarding
collaborating on commercializing the diagnostic genetic test.
CMH opened their pediatric genome center in October of 2011.
In November 2012, CMH sent BBDF a Contribution Agreement to
essentially buy BBDF out of any future commercialization of
the genetic testing device.
the same time that BBDF was negotiating with CMH to
commercialize the test, it was also negotiating with LabCorp
and Sonic Healthcare (other diagnostic companies). Both
LabCorp and Sonic Healthcare terminated negotiations with
BBDF. LabCorp ceased the negotiations in 2012. Sonic
Healthcare ceased its negotiations in August 2014. CMH is
currently operating their pediatric genome center and
allegedly using intellectual property owned by BBDF to
deciding a motion to dismiss under Rule 12(b)(6), the Court
must accept the plaintiff’s factual allegations as
true, construing them in the light most favorable to the
plaintiff. Patterson Oil Co. v. VeriFone, Inc., No.
2:15-cv-4089, 2015 U.S. Dist. LEXIS 141635, at *9 (W.D. Mo.
Oct. 19, 2015) (citing Schaaf v. Residential Funding
Corp., 517 F.3d 544, 549 (8th Cir. 2008)). Fed.R.Civ.P.
8(a)(2) states that a pleading must contain a “short
and plain statement of the claim showing that the pleader is
entitled to relief.” “The pleading standard Rule
8 announces does not require ‘detailed factual
allegations, ’ but it demands more than an unadorned,
Ashcroft v. Iqbal, 556 U.S. 662, 677-678 (2009)
(quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555, (2007)). In order for a claim to survive a motion
to dismiss, “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 677-678 (2009).
borrowing statute, Mo. Rev. Stat. § 516.190, provides
that “[w]henever a cause of action has been fully
barred by the laws of the state, territory or country in
which it originated, said bar shall be a complete defense to
any action thereon, brought in any of the courts of this
state.” Usually, “the possible existence of a
statute of limitations defense is not ordinarily grounds for
Rule 12(b)(6) dismissal unless the complaint itself
establishes the defense.” Nelson v. Bitters,
No. C15-4077-CJW, 2016 U.S. Dist. LEXIS 35020, *17 (N.D. Iowa
Mar. 18, 2016) (quoting Joyce v. Armstrong Teasdale,
LLP, 635 F.3d 364, 367 (8th Cir. 2011) (quoting
Jessie v. Potter, 516 F.3d 709, 713 n.2 (8th Cir.
2008))). However, “when it ‘appears from the face
of the complaint itself that the limitations period has run,
’ a [statute of] limitations defense may properly be
asserted through a Rule 12(b)(6) motion to dismiss.”
Nelson v. Bitters, No. C15-4077-CJW, 2016 U.S. Dist.
LEXIS 35020, *17 (N.D. Iowa Mar. 18, 2016) (quoting
Wycoff v. Menke, 773 F.2d 983, 984-85 (8th Cir.
1985)). The purpose of the borrowing statute is
“primarily to prevent a plaintiff from forum shopping
for a statute of limitations. The statute prevents a
plaintiff from gaining more time to bring an action merely by
suing in a forum other than where the cause of action
accrued.” Natalini v. Little, 185 S.W.3d 239,
241 (Mo.Ct.App. 2006).
move to dismiss BBDF’s claims with prejudice, alleging
that BBDF’s claims are barred under Missouri’s
borrowing statute since the claims each have a two year
statute of limitation in Texas. Although Missouri has a five
year statute of limitations for the types of claims presented
by plaintiff, defendants assert that Missouri’s statute
of limitations does not apply because BBDF’s claims
originated in Texas and BBDF is claiming purely economic
BBDF argues that BBDF was not exclusively injured in Texas
and the case has a strong enough connection to Missouri for
the Missouri statute of limitations to apply. BBDF also
asserts that CMH’s continued use of the genetic test is
a continuing tort, and therefore the statute of limitations
has not run. BBDF further claims that without discovery,
there are too many unknown facts to determine whether the
statute of limitation has run. BBDF also asks that it be
granted leave to amend its complaint if the Court finds in
favor of CMH, instead of dismissing the action with
looking at the facts in the light most favorable to the
plaintiff, the Court must determine how to apply
Missouri’s borrowing statute. “[T]he
‘critical issue’ in applying the borrowing
statute ‘is determining where a cause of action
originated.’” Morley v. Square, Inc.,
No. 4:14cv172, 2014 U.S. Dist. LEXIS 147476, *7 (E.D. Mo.
Oct. 16, 2014) (quoting Great Plains Trust Co. v. Union
Pac. R. Co., 492 F.3d 986, 992 (8th Cir. 2007). To
determine where the cause of action originated, the Court
looks at (1) where the plaintiff sustained damage and (2)
where the damage was “capable of ascertainment.”
Hildene Opportunities Master Fund Ltd v.Arvest Bank,
No. 14-1110-cv-W-ODS, 2016 U.S. Dist. LEXIS 8117 (W.D. Mo.
Jan. 25, 2016). “[D]amages are ‘sustained and
capable of ascertainment’ when the fact of damage can
be discovered or made known.” Morley v. Square,
Inc., No. 4:14-cv-172, 2014 U.S. Dist. LEXIS 147476, *7
(E.D. Mo. Oct. 16, 2014) (quoting Jordan v. Willens,937 S.W.2d 291, 294 (Mo. App. W.D. 1996)). “[F]or cases
involving a purely economic injury, as opposed to a physical
accident with economic consequences, a cause of action
originates where the plaintiff is financially damaged.”
Morley v. Square, Inc., No. 4:14cv172, 2014 U.S.
Dist. LEXIS 147476, *7 (E.D. Mo. Oct. 16, 2014) (quoting