United States District Court, D. Massachusetts
UNIVERSITY OF MASSACHUSETTS BIOLOGIC LABORATORIES and THIRD SECTOR NEW ENGLAND, INC., Plaintiffs,
CSL BEHRING AG, Defendant.
MEMORANDUM AND ORDER ON PLAINTIFFS' MOTION TO
REMAND AND DEFENDANT'S MOTION TO DISMISS
DENNIS SAYLOR, IV UNITED STATES DISTRICT JUDGE
an action for declaratory judgment arising out of a contract
dispute. In 2002, the University of Massachusetts Biologic
Laboratories (“MassBiologics”), Third Sector New
England (“TSNE”), and a predecessor to CSL
Behring AG (“CSL”) entered into a licensing
agreement. Under the agreement, TSNE and MassBiologics
granted CSL the exclusive right and license to technology
related to the prevention and treatment of cytomegalovirus
infection using immunoglobulin and monoclonal antibodies. CSL
was to pay MassBiologics and TSNE royalties on the sale of
products made using that technology, including a product
September 2015, CSL sent letters to MassBiologics and TSNE
stating its belief that it was no longer required to pay
royalties under the licensing agreement. MassBiologics and
TSNE then filed this declaratory judgment action in the
Suffolk Superior Court seeking to clarify the parties'
rights and obligations under the agreement. Asserting
diversity jurisdiction, CSL removed the action to this Court.
and TSNE have now moved to remand the action to state court.
They contend that complete diversity is lacking because
MassBiologics is an arm of the state and therefore not a
citizen of Massachusetts for the purposes of diversity
jurisdiction. CSL has moved to dismiss for failure to state a
claim upon which relief can be granted.
reasons stated below, plaintiffs' motion to remand will
be granted. CSL's motion to dismiss will remain pending
after the remand.
April 23, 1990, Third Sector New England
(“TSNE”), a Massachusetts non-profit corporation,
and Molecular Vaccines (later known as MedImmune) entered
into a licensing agreement concerning the production of an
anti-cytomegalovirus product. (Compl. ¶ 6, 8).
Cytomegalovirus (“CMV”) is a common herpes virus
that can be dangerous for individuals with weakened immune
systems, such as organ-transplant recipients. (Compl. ¶
7). Under the agreement, TSNE agreed to transfer to MedImmune
the information and technical assistance necessary to enable
MedImmune to manufacture, test, and package hyperimmune CMV
intravenous immunoglobulin, later sold as CytoGam. (Compl.
¶ 8). TSNE also granted MedImmune an exclusive right and
license to TSNE's “Technology, ” which was
defined as any “discovery, know how, invention,
improvements, development, trade secret, data, governmental
approvals or licenses” concerning the prevention and
treatment of CMV. (Compl. ¶ 10, 11).
agreed to pay TSNE royalties of ten to fifteen percent of the
net sales of products made using TSNE's
“Technology, ” including CytoGam. (Compl. ¶
14). MedImmune also agreed to “use reasonable efforts
under the circumstances” to commercialize, market, and
sell CMV-related products. (Compl. ¶ 15).
University of Massachusetts Biologic Laboratories
(“MassBiologics”) was established in 1996 by the
Massachusetts legislature in order to “research,
develop and produc[e] . . . vaccines and biologic products
designed to reduce or prevent morbidity and mortality in the
commonwealth.” Mass. Gen. Laws ch 75, § 43(a). In
2002, MedImmune, TSNE, and MassBiologics entered into an
assignment agreement that transferred TSNE's rights,
interests, and obligations under the original agreement to
MassBiologics, reserving to TSNE, among other things, the
right to a portion of the royalties paid. (Compl. ¶ 19,
December 2006, MedImmune assigned all of its rights and
obligations under the agreement to ZLB Behring AG (later
known as CSL Behring AG). (Compl. ¶ 22, 23). Since 2007,
CSL has paid royalties to MassBiologics and TSNE as required
by the agreement. However, on September 7, 2015, CSL sent
letters to MassBiologics and TSNE stating its belief that,
under the terms of the agreement, it was no longer obligated
to pay royalties. (Compl. ¶ 31).
January 20, 2016, MassBiologics and TSNE filed a complaint in
the Suffolk County Superior Court seeking (1) a declaratory
judgment affirming that CSL is required to continue to pay
royalties on sales of CytoGam and (2) specific performance of
CSL's obligations under the agreement. (Compl. ¶ 35,
36). On July 13, 2016, CSL removed this action to this Court
pursuant to 28 U.S.C. §§ 1441 and 1446.
and MassBiologics have moved to remand this action back to
the Suffolk County Superior Court. CSL has moved to dismiss
the complaint for failure to ...