A federal judge agrees to dismiss a lawsuit filed against Johnson & Johnson (NYSE:JNJ) subsidiary Biosense Webster by a former sales rep and St. Jude Medical (NYSE:STJ) that sought to block Biosense from enforcing a non-compete agreement.
Sarah Elsener and St. Jude sued Biosense in February, arguing before Judge Stephen Wilson of the U.S. District Court for Central California that the J&J subsidiary shouldn’t be allowed to keep Elsener from selling St. Jude’s cardiac rhythm management and atrial fibrillation devices, according to court documents.
Elsener was a clinical account specialist for Biosense and its AF products, according to the documents. She and St. Jude argued that because her new duties involve CRM devices, which Biosense doesn’t sell, or selling AF products outside her former Biosense territory, the non-compete agreement doesn’t apply.
"As a St. Jude technical service specialist, Elsener seeks to provide: i) sales, and support for the sales of, St. Jude’s non-competitive CRM devices and leads in, among other places, her former Biosense accounts; and/or ii) sales, and support for the sales of, competitive AF devices to customers and potential customers of St. Jude to whom Elsener did not sell or service Biosense products during the twelve (12) months prior to her departure from Biosense. Elsener has begun her training on St. Jude’s CRM products, and is now in doubt as to her ability to practice her chosen profession, and is in fear of losing of losing her job if Biosense is able to enforce its overly broad covenant," according to the documents [emphasis theirs].
But after Biosense agreed to Elsener’s interpretation of the non-compete clause, she asked Wilson to dismiss her from the complaint, the documents show. Biosense then asked Wilson to dismiss St. Jude’s claims for unfair competition, according to court records.
"On May 13, 2014, BWI sent a letter to Plaintiffs explaining that BWI agrees that Elsener may sell CRM devices for SJM and AF products outside of her former BWI accounts, and requested Plaintiffs dismiss the lawsuit. Plaintiffs never responded. Given that BWI has agreed not to restrict Elsener’s ability as alleged in the Amended Complaint and BWI has not threatened imminent litigation against Elsener, is there an adequate basis for Plaintiffs’ claim for declaratory relief?" the company argued [emphasis theirs]. "The answer is simply no. Plaintiffs have failed to allege an "actual controversy" of "sufficient immediacy and reality" in the Amended Complaint sufficient to invoke this Court’s jurisdiction. Even if Plaintiffs have properly pleaded a claim for declaratory relief, this Court should exercise its discretion to decline to hear the matter because Plaintiffs are engaged in forum shopping—the facts giving rise to this action have a tenuous relationship, at best, to California— and the case implicates only state law issues."
After a hearing this week, Wilson told the case’s lawyers August 26 that he intends to dismiss the case with prejudice, according to the documents.
