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Odish v. Peregrine Semiconductor, Inc.

United States District Court, E.D. Michigan, Southern Division

March 11, 2015

JOSEPH ODISH and CRANBROOK CAPITAL CONSULTING GROUP, LLC, Plaintiffs,
v.
PEREGRINE SEMICONDUCTOR, INC., MORGANTHALER VENTURES, GARY MORGANTHALER, GAYE MELISSA MORGANTHALER, and DAVID JONES, jointly and severally, Defendants.

OPINION AND ORDER ADOPTING REPORT AND RECOMMENDATION [50] AND GRANTING DEFENDANTS' MOTION TO DISMISS [36]

LAURIE J. MICHELSON, District Judge.

Plaintiff Joseph Odish, a Michigan attorney, brought this lawsuit pro se on behalf of himself and his company, Plaintiff Cranbrook Capital Consulting, LLC. In their 174-page, twenty-three count Amended Complaint, Plaintiffs allege that they have an ownership stake in the technology company Cognitive Code. Cognitive Code developed the software program SILVIA, an artificial intelligence product alleged to be a competitor with Apple's SIRI. Plaintiffs say that they invested time and money in Cognitive Code to make it more valuable, but that Defendants, investors and advisors for the company, have diminished its value and that of the SILVIA program through their allegedly wrongful conduct.

On June 25, 2014, Defendants filed a Motion to Dismiss pursuant to Federal Rules of Procedure 12(b)(2) and 12(b)(3). (Dkt. 36.) Plaintiffs did not respond, though they did file multiple requests for judicial notice regarding non-party Oncomed Pharmaceuticals, a company allegedly connected with the Defendants. (Dkts. 37, 38, 42.) On November 17, 2014, Magistrate Judge Paul J. Komives issued a Report and Recommendation that Defendants' motion be granted pursuant to Federal Rule of Civil Procedure 12(b)(2). (Dkt. 50.) Plaintiffs filed objections (Dkt. 52) and Defendants responded (Dkt. 53).

The Court has reviewed the Report, Plaintiffs' objections, and Defendants' response. The Court concludes that most of Plaintiffs' objections are waived due to their failure to respond to Defendants' Motion to Dismiss. And the unwaived objections do not demand reversal of the Report and Recommendation. Thus, the Report and Recommendation will be ADOPTED and Defendants' Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) will be GRANTED.

I. BACKGROUND

In their Motion, Defendants argued that this Court lacks personal jurisdiction over them and that venue is improper in this Court. (Defs.' Br. at 1-2.) They also ask that this case be transferred to the United States District Court for the Northern District of California pursuant to 28 U.S.C. § 1404(a). ( Id. ) The relevant allegations regarding the Defendants, as stated in the Amended Complaint, are as follows:

Defendant Gary Morgenthaler is a resident of California and a principal equity partner of Morgenthaler Ventures.
Defendant PEREGRINE SEMICONDUCTOR SYSTEMS. A publicly traded company with ticker symbol PMSI that Gary Morgenthaler still has a significant equity interest and exercises "control" over per SEC regulations and definitions....
Defendant Gaye Melissa Morgenthaler is a resident [of] California and upon information and belief, a significant stakeholder in the private venture capital firm that bears her name. She and her husband Defendant David Jones are presently members of the Advisory Board of Cognitive Code per the corporation website....
Defendant David Jones is a resident of California and married to Defendant Gaye Melissa Morgenthaler.
Defendant Morgenthaler Ventures is a Delaware Corporation that specializes in Venture Capital funding.... [with] their main office in Menlo Park, California. And other offices in Cleveland, Ohio, where the subsidiary Morgenthaler Private Equity Group is housed. They also have offices in Boston....

(Dkt. 14, Am. Compl., at ¶¶ 15-20.)

As to jurisdiction and venue, the Amended Complaint states as follows:

The jurisdiction of this Court is based upon § 22 of the Securities Act of 1933, 15 U.S.C. § 77v, Section 27 of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78aa, 28 U.S.C. § 1331 and principles of supplemental jurisdiction, 28 U.S.C. § 1367. Venue is proper in this district pursuant to § 27 of the Exchange Act and 28 U.S.C § 1391(b). Defendant Peregrine Semiconductor is a publically traded company; many of the acts herein this district and all the named Defendants conduct substantial business in this District. Securities Subject Matter jurisdiction: This action also arises under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "1934 Act"), 15 U.S.C. §§ 78j(b) and 78t, and the rules and regulations promulgated thereunder, including SEC Rule 10b-5, 17 C.F.R. 240.10b-5. Jurisdiction is based upon Section 27 of the 1934 Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 1331. Venue is thus also proper in this District under section 27 of the 1934 Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 1391(b). Defendants maintained its United States offices, transacts business, and has agents in this ...

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