Cases & Deals

Zimmer wins judgment on pleadings dismissing untimely unfair competition claims

Clients Zimmer Holdings, Inc.

On January 20, 2011, Judge Stanton Wettick of the Commerce and Complex Litigation Center of the Allegheny County Court of Common Pleas granted a motion for judgment on the pleadings dismissing the final claims pending against Jones Day clients Zimmer and Zimmer-Randall Associates ("Zimmer"), along with all other defendants, in litigation asserting improper and unfair competition. The successful motion for judgment on the pleadings marked the final round in a series of motions filed by Jones Day winning dismissal of more than seven counts in both state and federal court.

Plaintiffs initiated suit against Zimmer and four other orthopedic implant manufacturers in 2008 in the United States District Court for the Western District of Pennsylvania claiming that the manufacturers improperly induced various physicians, hospitals, and medical institutions to use defendants' devices. Zimmer won dismissal with prejudice of the federal antitrust and Racketeer Influenced and Corrupt Organizations Act claims in March 2009, and the United States Court of Appeals for the Third Circuit affirmed the dismissal with a unanimous opinion in June 2010.

While the federal appeal was pending, plaintiffs filed related state claims in the Allegheny County Court of Common Pleas, alleging various theories of common law unfair competition. On preliminary objections filed by Jones Day, Zimmer secured dismissal of claims for conspiracy and tortious interference with contract. Zimmer then answered plaintiffs' sole remaining claim for interference with prospective business relations asserting, inter alia, the statute of limitations as an affirmative defense. To document the expiration of the statute of limitations, Zimmer attached a set of news articles and Securities and Exchange Commission filings to its answer.

Relying on the attachments to Zimmer's answer, as well as the allegations of plaintiffs' complaint, Judge Wettick adopted Jones Day's argument that the two-year statute of limitations had expired and no tolling doctrines applied. In particular, citing certain news reports proffered by Jones Day, Judge Wettick refused to apply the discovery rule because "the exercise of reasonable diligence requires plaintiffs to be aware of the scuttlebutt in the business of selling orthopedic devices." Judge Wettick held that plaintiffs had sufficient information available to them and that their claims accrued well beyond the two-year limitations period.

McCullough v. Zimmer, Inc., et al., Case No. GD-09-010725 (Pa. Ct. C.P., Allegheny County)

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