STARK, District Judge:
Defendants Mylan Pharmaceuticals Inc. ("Mylan Pharma") and Mylan Inc. ("Mylan Inc." and, together with Mylan Pharmaceuticals, "Mylan" or "Defendants") have moved to dismiss the complaint filed against them by Plaintiffs Acorda Therapeutics, Inc. ("Acorda") and Alkermes Pharma Ireland Limited ("Alkermes" and, together with Acorda, "Plaintiffs"). (D.I.10) Defendants bring their motion pursuant to Federal Rule of Civil Procedure 12(b)(2), asserting a lack of personal jurisdiction. Specifically, Mylan contends that the Supreme Court's recent decision in Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), has resulted in the District of Delaware lacking general jurisdiction over Mylan in this (and likely all)
After reviewing thorough briefing and hearing oral argument, the Court has concluded that it does have personal jurisdiction over Mylan Pharma in this action. While Daimler altered the analysis with respect to general jurisdiction—and the Court agrees with Mylan that this Court cannot exercise general personal jurisdiction over either of the Mylan Defendants on the basis that they are "at home" in Delaware—Daimler does not change the fact that Mylan Pharma consented to this Court's exercise of personal jurisdiction when it registered to do business and appointed an agent for service of process in the State of Delaware. In addition, Plaintiffs have met their burden to establish that this Court has personal jurisdiction over Mylan Pharma based on specific jurisdiction, which provides an independent reason for denying the motion as it relates to Mylan Pharma.
With respect to Mylan Inc., which is the parent of Mylan Pharma, the Court lacks general jurisdiction, as Mylan Inc. is neither "at home" nor registered to do business in Delaware. However, Plaintiffs allege but have not proven a non-frivolous claim that Mylan Inc. used Mylan Pharma as its agent in connection with the ANDA filing giving rise to this litigation. Therefore,
Plaintiff Acorda is a corporation organized under the laws of the State of Delaware, having a principal place of business in Ardsley, New York. (D.I. 1 at ¶ 3) Acorda researches, develops, and sells biotech and pharmaceutical products, including therapies to restore neurological functioning in people with multiple sclerosis ("MS"). (Id.) Plaintiff Alkermes is a corporation organized under the laws of Ireland, having a principal place of business in Dublin, Ireland. (Id. at ¶ 4)
Acorda's "flagship drug product" is Ampyra® which has been shown to improve walking in people with MS. (Id. at ¶¶ 2, 30) Acorda holds New Drug Application ("NDA") No. 022250, approved by the U.S. Food and Drug Administration ("FDA"), for the use of 10 mg dalfampridine extended release tablets. (Id. at ¶ 30) It is this product which Acorda sells under the registered name Ampyra®. (Id.)
There are five patents-in-suit: U.S. Patent Nos. 5,540,938 (the "'938 patent"), 8,007,826 (the "'826 patent"), 8,354,437 (the "'437 patent"), 8,440,703 (the "'703 patent"), and 8,663,685 (the "'685 patent") (collectively, "the Ampyra® patents"). All of the Ampyra® patents are listed in the FDA's "Orange Book"
Mylan Pharma is a corporation organized under the laws of the State of West Virginia, having a principal place of business in Morgantown, West Virginia. (Id. at ¶ 7; D.I. 12 at 2) It "formulat[es], develop[s], manufactur[es], packag[es], market[s], and sell[s] generic copies of branded pharmaceutical products for the United States market, including in Delaware." (D.I. 1 at ¶ 8)
On April 7, 2010, pursuant to sections 371 and 376 of title 8 of the Delaware Code, Mylan Pharma qualified to do business in Delaware, by filing with the Secretary of State (1) a certificate of incorporation, representing its business as "[p]harmaceutical manufacturing, distribution and sales," and (2) and a statement naming Corporation Services Company, in Wilmington, Delaware, as its registered agent to accept service of process in the State of Delaware. (D.I. 1 at ¶ 7; D.I. 15 at 5; D.I. 16, Exs. A & B) Mylan Pharma is also registered with the Delaware Board of Pharmacy as a licensed "Pharmacy-Wholesale" and a "Distributor/Manufacturer CSR." (D.I. 1 at ¶ 9; D.I. 16, Exs. C & D) Additionally, Mylan Pharma has "litigat[ed], as a defendant, over 50 other civil actions initiated in this jurisdiction in the
Mylan Inc. is a corporation organized under the laws of the Commonwealth of Pennsylvania, having a principal place of business in Canonsburg, Pennsylvania. (Id. at ¶ 10) Mylan Inc. is "a pharmaceutical company which develops, licenses, manufacturers, markets and distributes generic pharmaceuticals in the U.S." (Id. at ¶ 11) In fact, Mylan Inc. reports that "it is one of the largest generic pharmaceutical companies in the world today in terms of revenue as a result of, inter alia, its `ability to efficiently obtain [ANDA] approvals." (Id. at ¶ 19; D.I. 16, Ex. E at 5) More particularly, Mylan Inc. "holds the number one ranking in the U.S. generics prescription market in terms of sales and the number two ranking in terms of prescriptions dispensed." (D.I. 1 at ¶ 19)
Although 20 Mylan Inc. subsidiaries have incorporated in Delaware (see D.I. 16, Ex. E at 37-40), Mylan Inc. is not registered to do business in Delaware (see Tr. at 43). Mylan Inc. has "litigat[ed] as a defendant and assert[ed] counterclaims in at least 15 cases initiated in this jurisdiction over the past ten years." (D.I. 1 at ¶ 20)
Neither of the Defendants has any manufacturing plants, offices, facilities, other real property, a telephone listing, or a mailing address in the State of Delaware. (D.I. 12 at ¶ 5) In 2013, Mylan Pharma had no sales in Delaware, and that same year Mylan Inc.'s sales in Delaware produced just $429 in revenue. (Id. at ¶ 5) These figures do not include any revenue the Mylan Defendants derive from distribution of generic drug products in Delaware through out-of-state distributors. (See Tr. at 57)
Mylan Pharma is a wholly-owned subsidiary of Mylan Inc. (Id. at ¶ 7) Plaintiffs allege that Mylan Pharma and Mylan Inc. "are agents of each other and/or work in concert with each other with respect to the development, regulatory approval, marketing, sale, and distribution of pharmaceutical products throughout the United States, including into Delaware." (Id. at ¶ 21) It is undisputed, however, that Defendants are separate corporate entities. (D.I. 17 at 8)
On January 22, 2014, Mylan Pharma filed ANDA No. 20-6858 ("Mylan's ANDA Filing")
On July 9, 2014, Mylan Pharma gave Plaintiffs notice of Mylan's ANDA Filing (the "Mylan Notice Letter"). (Id. at ¶ 34) Specifically, Mylan Pharma mailed the Mylan Notice Letter to Acorda at its principal place of business in New York and also to Alkermes at its principal place of business in Ireland. (See Tr. at 24, 50)
On July 16, 2014, Plaintiffs commenced this action, alleging that Defendants directly and indirectly infringed claims of all of the Ampyra® patents by submitting or causing submission of the Mylan ANDA Filing. (D.I. 1 at 9-16) Because Plaintiffs filed suit within 45 days of receiving the Mylan Notice Letter, the FDA is automatically stayed from giving final approval to Mylan's Generic Product for 30 months. See 21 U.S.C. § 355(j)(5)(B)(iii).
In their complaint, Plaintiffs assert five counts of infringement—one for each of the Ampyra® patents—against both Defendants, as well as a sixth count alleging that Mylan Inc. induced infringement by its role in bringing about Mylan's ANDA Filing. (D.I. 1 at ¶¶ 39-86)
Numerous other generic pharmaceutical companies besides Mylan have filed ANDAs seeking FDA approval to market generic versions of Ampyra®. Consequently, Plaintiffs filed seven other related ANDA suits in the District of Delaware in July 2014, all of which are assigned to the same undersigned Judge.
On August 20, 2014, Defendants filed their motion to dismiss the complaint, pursuant to Federal Rule of Civil Procedure 12(b)(2), contending that this Court lacks personal jurisdiction over both of them. (D.I.10) Briefing on the motion was completed on September 26, 2014 (D.I.21), although the parties thereafter submitted letter briefs addressing the subsequent decision by the Honorable Gregory M. Sleet in AstraZeneca v. Mylan, 72 F.Supp.3d 549, 2014 WL 5778016 (D.Del.2014) (hereinafter "AstraZeneca"). The Court heard oral argument on December 15, 2014.
Pursuant to Federal Rule of Civil Procedure 12(b)(2), a party may move to dismiss a case based on the court's lack of personal jurisdiction over that party. When a defendant moves to dismiss a lawsuit for lack of personal jurisdiction, the plaintiff bears the burden of showing the basis for jurisdiction. See Power Integrations, Inc. v. BCD Semiconductor, 547 F.Supp.2d 365,
Determining the existence of personal jurisdiction generally requires a two-part analysis—one statutory and one constitutional.
In opposing Defendants' motion, Plaintiffs assert three bases for this Court's exercise of personal jurisdiction over both Mylan Defendants: (1) general jurisdiction, notwithstanding Daimler; (2) general jurisdiction based on consent; and (3) specific jurisdiction. In the Discussion below, the Court first describes the Daimler decision, and then turns to each of Plaintiffs' grounds for finding personal jurisdiction.
Daimler involved a dispute over whether the United States District Court for the Northern District of California could exercise general jurisdiction over a German manufacturer of luxury vehicles, Daimler-Chrysler Aktiengesellscaft ("Daimler"). The plaintiffs in Daimler were 22 Argentinian residents, who alleged that a subsidiary of Daimler, Mercedes-Benz Argentina, violated the Alien Tort Statute, 28 U.S.C. § 1350, and the Torture Victim Protection Act of 1991, 106 Stat. 73, note following 28 U.S.C. § 1350, by collaborating with Argentinian security forces to commit human rights violations during Argentina's "Dirty War." Daimler, 134 S.Ct. at 750-51. Daimler's subsidiary allegedly committed the violations in Argentina between 1976 and 1983; the plaintiffs filed suit against Daimler in California in 2004. See id. at 751. The plaintiffs asserted that
As the basis for the California court to exercise jurisdiction over Daimler, plaintiffs alleged that an agency relationship existed between Daimler and another of its subsidiaries, Mercedes-Benz USA, LLC ("MBUSA"). See id. at 752. MBUSA, which was an "indirect" subsidiary of Daimler wholly-owned by another Daimler subsidiary, served as Daimler's exclusive importer and distributor in the United States. See id. at 752 & n. 3. MBUSA was incorporated in Delaware and had its principal place of business in New Jersey. See id. at 751-52. MBUSA's U.S. distribution included California, where MBUSA had several corporate facilities. See id. at 751-52, 758. MBUSA's annual sales of Daimler vehicles in California generated approximately $4.6 billion in revenues, accounting for 2.4% of Daimler's global sales. See id. at 766-67 (Sotomayor, J., concurring).
Daimler's own contacts with California were sporadic, but the plaintiffs argued that MBUSA's contacts with California could be attributed to Daimler for jurisdictional purposes. See id. at 751-52. The district court disagreed, finding that MBUSA was not Daimler's agent, and, further, that Daimler's own contacts with California were insufficient to support a finding of general jurisdiction in California over Daimler. See id. at 752. The district court dismissed the case.
On appeal, the Court of Appeals for the Ninth Circuit initially affirmed the dismissal. See id. at 753. Later, however, the appellate court granted the plaintiffs' petition for rehearing and reversed the district court, finding general jurisdiction based on an agency relationship between Daimler and MBUSA. See id. at 753. Thereafter, the Supreme Court "granted certiorari to decide whether, consistent with the Due Process Clause of the Fourteenth Amendment, Daimler is amenable to suit in California courts for claims involving only foreign plaintiffs and conduct occurring entirely abroad." Id. at 753.
In a unanimous holding,
In reaching its conclusion, the Daimler Court emphasized that although "continuous and systematic contacts" are sufficient to support an exercise of specific jurisdiction when those contacts give rise to the cause of action, an exercise of general jurisdiction requires much more. See id. at 761. To assess whether general jurisdiction was available, the Supreme Court undertook an analysis of whether Daimler was "essentially at home" in California, a concept the Court had described in Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, 131 S.Ct. 2846,
Daimler went on to explain that in all but the most exceptional circumstances, a corporation is "at home" only in the two "paradig[m] ... bases for general jurisdiction": its place of incorporation and its principal place of business. Id. at 760-61 & n. 19. These "affiliations have the virtue of being unique—that is, each ordinarily indicates only one place—as well as easily ascertainable." Id. at 760. Accordingly, limiting general jurisdiction to only those forums in which a corporation is "at home" allows corporations "to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit," while "afford[ing] plaintiffs recourse to at least one clear and certain forum in which a corporate defendant may be sued on any and all claims." Id. at 760-62. By contrast, "exorbitant" theories of general jurisdiction, which would render a corporation potentially liable to suit for all claims in many if not all states, lead to unpredictability for the corporation and are thus "unacceptably grasping." Id. at 761-62.
The factual and legal contexts in which Daimler arose could hardly be more different than those in which the instant case arises. Most fundamentally, in the 1970s and 1980s, when Daimler's subsidiary was allegedly engaged in the activities ultimately giving rise to the 2004 lawsuit against Daimler, Daimler
The first basis on which Plaintiffs oppose Mylan's motion is that, according to Plaintiffs, this Court may exercise general jurisdiction over both Mylan Defendants based on Defendants' continuous and systematic contacts with Delaware. Plaintiffs maintain that general jurisdiction is present here in Delaware notwithstanding the Supreme Court's decision in Daimler. The Court disagrees.
As an initial matter, the Court agrees with both sides that the general jurisdiction analysis required in this case involves consideration solely of the due process issue,
In order for this Court to have general jurisdiction over Mylan based on minimum contacts, the Court must find that Mylan's "affiliations with the State are so `continuous and systematic' as to render them essentially at home in the forum State." Daimler, 134 S.Ct. at 754 (quoting Goodyear, 131 S.Ct. at 2846). Daimler explains:
Id. at 762 n. 20.
Here, neither of the two paradigmatic scenarios in which a corporation is "at home" are present, as neither Mylan Pharma nor Mylan Inc. are Delaware corporations or have their principal place of business in Delaware. The Supreme Court has not "foreclose[d] the possibility that in an exceptional case, a corporation's operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State." Id. at 761 n. 19. But Plaintiffs do not articulate any persuasive basis for finding either Mylan Pharma or Mylan Inc. to have
For these reasons, this Court cannot exercise general personal jurisdiction over either of the Mylan Defendants on the basis that these corporations are "at home" in Delaware.
Plaintiffs next argue that this Court may exercise general jurisdiction over at least Mylan Pharma as a result of that entity's compliance with Delaware's registration statute. That is, Mylan Pharma's decision to register to do business in Delaware and, as Delaware requires, appoint an agent here to accept service of process, has the consequence that Mylan Pharma has consented to the jurisdiction of the courts in Delaware. Mylan Pharma disagrees, arguing that registration to do business in a state "is of no jurisdictional consequence," for reasons including that Mylan Pharma has registered to do business in 22 states (including Delaware), and it cannot be "at home" in all 22 states. (D.I. 12 at 2, 8-9 (citing Daimler, 134 S.Ct. at 762 n. 20 ("A corporation that operates in many places can scarcely be deemed at
"Because the requirement of personal jurisdiction represents first of all an individual right, it can, like other such rights, be waived." Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 704, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982). As the Supreme Court has explained:
Id. at 704-05, 102 S.Ct. 2099 (emphasis added); see also Capriotti's Sandwich Shop, Inc. v. Taylor Family Holdings, Inc., 857 F.Supp.2d 489, 499 (D.Del.2012) ("It is well settled that the requirement of personal jurisdiction is intended to protect a defendant's liberty interests. Because the defense is a personal right, it may be obviated by consent or otherwise waived.") (internal citation and quotation marks omitted).
Moreover, "[a] variety of legal arrangements have been taken to represent express or implied consent to the personal jurisdiction of [a] court." Ins. Corp. of Ir., 456 U.S. at 703, 102 S.Ct. 2099. In particular, the Supreme Court "has upheld state procedures which find constructive consent to the personal jurisdiction of the state court in the voluntary use of certain state procedures." Id. at 704, 102 S.Ct. 2099 (citing Adam v. Saenger, 303 U.S. 59, 67-68, 58 S.Ct. 454, 82 L.Ed. 649 (1938); Chicago Life Ins. Co. v. Cherry, 244 U.S. 25, 29-30, 37 S.Ct. 492, 61 L.Ed. 966 (1917)). Importantly, "`
One manner in which a corporation may be deemed to have consented to the jurisdiction of the courts in a particular state is by complying with the requirements imposed by that state for registering or qualifying to do business there. Nearly a century ago, in Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93, 94, 37 S.Ct. 344, 61 L.Ed. 610 (1917), the Supreme Court stated that "there would be ... little doubt" as to the existence of personal jurisdiction by a state's courts over a corporation
In Robert Mitchell Furniture Co. v. Selden Breck Construction Co., 257 U.S. 213, 42 S.Ct. 84, 66 L.Ed. 201 (1921), the Supreme Court clarified the rationale and scope of Pennsylvania Fire.
Id. at 215-16, 42 S.Ct. 84 (internal citation omitted).
Consistent with Pennsylvania Fire and its progeny, the Third Circuit upheld the constitutionality of Pennsylvania's registration statute, which expressly treated registration to do business in Pennsylvania as consent to the jurisdiction of Pennsylvania's courts over suits against the registering corporation. See Bane v. Netlink, Inc., 925 F.2d 637, 641 (3d Cir.1991). The corporate registration statute at issue in Bane, 15 Pa. Stat. Ann.2004(6) (Purdon 1967) (repealed 1988), required the "designation of the Secretary of the Commonwealth... as the true and lawful attorney of the corporation upon whom all lawful process in any action against it may be served ... [with] the same legal force and validity as if served on the corporation...." Bane, 925 F.2d at 640. The Pennsylvania legislature had explicitly established that the scope of consent under this provision extended to general jurisdiction. See id. (quoting 42 Pa. Cons.Stat. Ann. § 5301(a)(2)(i) (1990)). In finding Pennsylvania's statutory scheme to be constitutional, the Third Circuit observed that "[c]onsent is a traditional basis for assertion of jurisdiction long upheld as constitutional." Bane, 925 F.2d at 641; see also Davis v. Smith, 253 F.2d 286, 288-89 (3d Cir.1958) (finding that appointment of agent in Pennsylvania constituted waiver of venue privilege, because "[e]ven though a statute may require the designation of an agent to receive process, such designation is still deemed a voluntary act evidencing consent to the suit").
The Federal Circuit, whose interpretation on this point will be governing in patent cases like this one, has not addressed the constitutionality of treating registration to do business in a state as consent to the jurisdiction of courts in that state. (See Tr. at 20) Two other courts of appeals that have addressed the issue have upheld the constitutionality of such constructions. See Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1199-1200 (8th Cir.1990) (upholding general jurisdiction based on statutory interpretation of Minnesota Supreme Court and noting that "[t]he whole purpose of requiring designation of an agent for service is to make a nonresident suable in the local courts");
As far as the Court is aware, only two circuits appear to have held that a state registration requirement cannot be the basis for finding consent to general jurisdiction (and one did so years before the Supreme Court's decision in Insurance Corp. of Ireland). See Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1245 (7th Cir.1990) ("Registering to do business is a necessary precursor to engaging in business activities in the forum state. However, it cannot satisfy ... standing alone ... the demands of due process. Such an interpretation of the Indiana registration statute would render it constitutionally suspect...."); Ratliff v. Cooper Laboratories, Inc., 444 F.2d 745, 748 (4th Cir. 1971) ("Applying for the privilege of doing business is one thing, but the actual exercise of that privilege is quite another. The principles of due process require a firmer foundation than mere compliance with state domestication statutes.").
Plaintiffs' consent argument rests on Delaware's registration statute, which provides:
8 Del. C. § 376 (emphasis added). In turn, Section 371 provides, in pertinent part, that:
550 A.2d 1105, 1115-16 (Del.1988) (emphasis added; internal quotation marks omitted). In this way, Sternberg held that a corporation qualified to do business in Delaware, which requires appointment of an agent to accept service of process, has consented to the general jurisdiction of the courts in the State of Delaware.
Prior to Daimler, the District of Delaware had adhered to Sternberg and the Delaware Supreme Court's interpretation of Delaware's registration statute. In Continental Casualty Co. v. American Home Assurance Co., 61 F.Supp.2d 128 (D.Del.1999), now-retired Judge Farnan wrote:
Id. at 129-30 & n. 3 (citing Penn. Fire, 243 U.S. at 95, 37 S.Ct. 344; Sternberg, 550 A.2d at 1108-12). The parties have not cited, nor has the Court through its own research discovered, any decision prior to Daimler which rejected or even questioned the constitutionality of Sternberg.
Given the analysis above, the undersigned Judge concludes that this Court may exercise general jurisdiction over Mylan Pharma based on Mylan Pharma's consent, consent which Mylan Pharma gave when it complied with the Delaware business registration statute by appointing a registered agent in Delaware to accept service of process. It is undisputed that Mylan Pharma is and has been qualified to do business in Delaware since 2010. (See D.I. 15 at 5; Tr. at 55) As required by Delaware law, Mylan Pharma has appointed a registered agent in Delaware who is
Mylan Pharma challenges this conclusion based on Daimler. In Mylan Pharma's view, Daimler narrowed the due process analysis for general jurisdiction, rendering Sternberg unconstitutional. (See Tr. at 58 (Mylan arguing that pre-Daimler cases "were decided when the assumption was that there was this breadth of general jurisdiction that does not occur anymore")) Mylan Pharma reads Daimler as broadly standing for the proposition that due process requires
It is the view of the undersigned Judge that, to the contrary, Daimler does not eliminate consent as a basis for a state to establish general jurisdiction over a corporation which has appointed an agent for service of process in that state, as is required as part of registering to do business in that state. (See Tr. at 39 (Plaintiffs arguing: "Daimler doesn't address what happens if somebody says, well, I'm prepared to forego that defense, to give up my right not to be sued here and to register to
In support of its interpretation of Daimler, Mylan Pharma contends that "International Shoe changed the focus of the jurisdictional inquiry from one based on a defendant's `physical presence' in the forum State to one based on `substantial contacts,' `fair play and substantial justice,' and `fundamental fairness.'" (D.I. 11 at 10) However, the undersigned Judge finds that the conclusion reached in this opinion is in fact consistent with International Shoe, which did not consider the traditional route to personal jurisdiction of consent, as there the defendant "had no agent within the state upon whom service could be made." 326 U.S. at 312, 66 S.Ct. 154. Rather, International Shoe described how a corporation may have sufficient "presence" in a forum to give rise to personal jurisdiction over it "even though
Aside from International Shoe, none of the cases which the Court has cited in
Moreover, Daimler does not address whether personal jurisdiction is an individual right, whether it may therefore be waived, whether waiver may occur by consent, or whether consent is assessed as a matter of state law. Daimler does not indicate whether MBUSA had appointed an agent to accept service of process in California. This may be due to California courts having found that such registration does not suffice to establish personal jurisdiction. See, e.g., World Lebanese Cultural Union, Inc. v. World Lebanese Cultural Union of N.Y., Inc., 2011 WL 5118525, at *4 (N.D.Cal. Oct. 28, 2011) ("California courts, however, have declined to find that a party has consented to a state's jurisdiction merely by appointing an in-state agent for service of process.") (citing DVI, Inc. v. Super. Ct., 104 Cal.App.4th 1080, 1095, 128 Cal.Rptr.2d 683 (2002); Gray Line Tours v. Reynolds Elec. & Eng'g Co., 193 Cal.App.3d 190, 193-95, 238 Cal.Rptr. 419 (1987)). Regardless of the reason for the lack of discussion of these points, that absence further demonstrates that Daimler has nothing to do with consent as a basis for personal jurisdiction.
The undersigned Judge is aware, of course, that a fellow member of this Court has reached a contrary conclusion on this point. In AstraZeneca, Judge Sleet, addressing the same issue presented here, concluded that, after Daimler, exercising general jurisdiction over Mylan Pharma based on consent is untenable, because, "[i]n light of the holding in Daimler ... the Delaware Supreme Court's decision in Sternberg can no longer be said to comport with federal due process." 72 F.Supp.3d at 556, 2014 WL 5778016, at *5. Judge Sleet stated that in Daimler, "the Supreme Court rejected the idea that a company could be haled into court merely for doing business in a state," because "[s]uch a theory ... would scarcely permit out-of-state defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit." Id. (quoting
However, in the view of the undersigned Judge, when courts have clearly held that compliance with a state's registration statute confers general jurisdiction, corporations have the requisite notice to enable them to structure their conduct so as to be assured where they will, and will not, be subject to suit. The problem identified in Daimler only arises when continuous and systematic contacts are used to assess whether a corporation is "at home" in a forum state, which requires a corporation to predict what level of contacts a court will find sufficient. When, instead, the basis for jurisdiction is the voluntary compliance with a state's registration statute, which has long and unambiguously been interpreted as constituting consent to general jurisdiction in that state's courts, the corporation can have no uncertainty as to the jurisdictional consequences of its actions.
Judge Sleet further concluded in AstraZeneca that "[f]inding mere compliance with such statutes sufficient to satisfy jurisdiction would expose companies with a national presence (such as Mylan) to suit all over the country, a result specifically at odds with Daimler." 72 F.Supp.3d at 557, 2014 WL 5778016, at *5. Plainly, today's holding is at one level in tension with the holding in Daimler that it would be "unacceptably grasping" to find general jurisdiction over a corporation "in every State in which a corporation engages in a substantial, continuous, and systematic course of business." See Daimler, 134 S.Ct. at 761 (internal quotation marks omitted). It seems an odd result that while there is not general jurisdiction over a corporation in every state in which the corporation does business, there may be general jurisdiction over a corporation in every state in which that corporation appoints an agent to accept service of process as part of meeting the requirements to register to do business in that state. But if consent remains a valid basis on which personal jurisdiction may arise—and the undersigned Judge concludes that Daimler did not change the law on this point—then this result, though odd, is entirely permissible.
In short, the undersigned Judge does not believe that Daimler meant, sub silentio, to eliminate consent as a basis for jurisdiction. Such a holding would threaten to fundamentally alter the personal jurisdiction defense from a waivable to a non-waivable right, a characteristic of the defense that was not before the Daimler Court and is not explicitly addressed in its opinion. The scope of a corporation's right to consent to jurisdiction in the courts of a particular state has never been thought to be limited to any certain number of states. It may well be that a corporation will voluntarily consent—whether by compliance with state registration statutes, by contract,
Judge Sleet's rejection of consent as a basis for general jurisdiction over
Mylan Inc. has not registered to do business in Delaware or appointed a registered agent to accept service of process on its behalf. Yet Plaintiffs assert that if personal jurisdiction exists over Mylan Pharma on a consent theory, personal jurisdiction must also exist over Mylan Inc. by virtue of it having allegedly caused Mylan Pharma, its wholly-owned subsidiary, to register in Delaware and to appoint an agent to accept service of process here. This takes consent too far; it would effectively manufacture consent out of a lack of consent.
As the Delaware Supreme Court stated in Sternberg, "[J]urisdiction over a wholly owned Delaware subsidiary does not automatically establish jurisdiction over the parent corporation in any forum... both the parent and the subsidiary corporation's contacts with the forum state must be assessed individually." 550 A.2d at 1119-20 (emphasis omitted). Even assuming Plaintiffs could prove that Mylan Inc. directed Mylan Pharma to register to do business in Delaware, this contact with Delaware (in addition to the others discussed previously in connection with the general jurisdiction analysis above) would neither render Mylan Inc. "at home" in Delaware nor constitute Mylan Inc's consent to general jurisdiction here. Thus, it is insufficient to give rise to general jurisdiction over Mylan Inc. in Delaware.
As a final and independent basis for this Court to exercise personal jurisdiction over Mylan Pharma and Mylan Inc., Plaintiffs assert specific jurisdiction. The Court agrees that Plaintiffs have met their burden to establish that this Court may exercise specific jurisdiction as to Mylan Pharma.
"Specific jurisdiction refers to the situation in which the cause of action
Having undertaken the requisite analysis here, the Court finds that it may, consistent with Mylan Pharma's due process rights, exercise specific jurisdiction over Mylan Pharma in this case. Plaintiffs' claims in this litigation arise out of and relate to Mylan Pharma's activities that are, and will be, directed to Delaware. This suit arises from Mylan's ANDA Filing, which is a prerequisite to obtaining FDA approval, which is necessary in order to sell Mylan's Generic Product in the United States, including in Delaware. More directly, this lawsuit arises from Mylan Pharma's sending the Mylan Notice Letter to Plaintiffs, including to Acorda, a Delaware corporation. At the time Mylan Pharma sent the Mylan Notice Letter to Acorda, Acorda had already initiated litigation in Delaware to enforce the Ampyra® patents against efforts to introduce generic Ampyra® to the U.S. market. Therefore, when it sent the Mylan Notice Letter to Acorda, Mylan Pharma knew or should have known that: (i) Acorda is a Delaware corporation; (ii) Acorda had already begun litigating the Ampyra® patents in the District of Delaware by filing suit against another ANDA filer (Actavis) here; (iii) Acorda would file suit against Mylan Pharma within 45 days of receiving the Mylan Notice Letter; and (iv) to obtain the efficiencies of coordinated litigation in a single district, Plaintiffs would almost certainly sue Mylan Pharma in Delaware.
Mylan Pharma has directed other activities at Delaware, including registering to do the business of "[p]harmaceutical manufacturing, distribution and sales" here, appointing a registered agent to accept service of process here, and registering with the Delaware Board of Pharmacy as a "Pharmacy/Wholesale" and "Distributor/Manufacturer CSR." (See D.I. 1 at ¶¶ 7, 9; D.I. 15 at 20; D.I. 16, Exs. A & B) Mylan Pharma has also been a frequent litigant in the District of Delaware, in precisely the type of case now before the Court—ANDA litigation—and its business model is expressly dependent on the certainty of its participation in such litigation. (See D.I. 1 at ¶ 11) Indeed, Mylan Pharma has litigated over 50 cases in Delaware. (Id. at ¶ 17)
134 S.Ct. at 754 (emphasis added; internal citation and quotation marks omitted). Fundamentally, for all of the reasons explained above, no traditional notions of fair play and substantial justice are offended by exercising specific jurisdiction over Mylan Pharma. The lack of unfairness to Mylan Pharma from having to litigate its efforts to obtain FDA approval of Mylan's Generic Product in the District of Delaware is particularly evident from the chronology of events relevant to this litigation, recited above, including particularly that when Mylan Pharma sent the Mylan Notice Letter, Acorda had already initiated Ampyra® related litigation in Delaware.
In World-Wide Volkswagen Corp. v. Woodson, the Supreme Court explained:
444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) (emphasis added; internal citations and quotation marks omitted). Even back in January 2014, when Mylan Pharma submitted Mylan's ANDA Filing, there was a high degree of predictability that Acorda, a Delaware corporation, would sue Mylan Pharma in Delaware to enforce the Ampyra® patents.
The Court reaches the same conclusion by considering the factors described in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), as being pertinent to determining "whether assertion of personal jurisdiction is `reasonable and fair'" in a particular case. Applying those factors here, the Court concludes that: (i) "the burden on the defendant" to litigate in the District of Delaware is minimal, as demonstrated by Mylan Pharma's frequent presence in Delaware and its failure to articulate any prejudice (beyond purported injury to its constitutional rights) attendant to litigating here; (ii) the forum state's interest in adjudicating the dispute, which is significant given that Acorda is a Delaware corporation seeking to enforce its patents and that this Plaintiff has ongoing related litigation pending in this Court; (iii) Plaintiffs' interest in obtaining convenient and effective relief, which also favors Delaware, given that Acorda is a small company facing eight generic challenges to its principal product (see Tr. at 31); and (iv) "the interstate judicial system's interest in obtaining the most efficient resolution of controversies," which again strongly favors keeping the case against Mylan Pharma here,
In AstraZeneca, Judge Sleet found that this Court has specific jurisdiction over Mylan Pharma in another ANDA case. One factual distinction between AstraZeneca and the instant case is that in AstraZeneca Mylan Pharma had mailed its paragraph IV certification letter to the plaintiff, AstraZeneca Pharmaceuticals LP ("AstraZeneca"), in Delaware, where AstraZeneca is both incorporated and has its principal place of business. See 72
Moreover, because Acorda is a Delaware corporation, it seems proper to conclude that Acorda suffers "injury" in Delaware as a result of Mylan's ANDA Filing. Of course, identifying a physical place where Acorda is injured by an ANDA submission is difficult, as a corporation is not a natural person, see Citizens United v. Fed. Election Comm'n, 558 U.S. 310, 343, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010), and as the infringement injury here is "highly artificial," see Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 678, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990). Mylan argues this means that Acorda is not injured anywhere. (See, e.g., Tr. at 60) But it is more logical to conclude that Acorda is injured,
The Court recognizes, as Mylan emphasizes (see, e.g., Tr. at 60-61), that Plaintiffs' contacts cannot be the sole basis for finding jurisdiction over Defendants. That does not, however, mean that an injury felt by a Delaware corporate citizen is entirely irrelevant to the specific jurisdiction inquiry. Such injury is felt in Delaware given that Delaware is one of the places at which a Delaware corporation is "at home."
Walden v. Fiore, ___ U.S. ___, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014), which the Supreme Court decided shortly after Daimler, does not change this result. In Walden, the Court found a lack of specific jurisdiction over a law enforcement officer (in a Bivens tort action) who had no contacts with the forum state and whose conduct took place entirely outside of the forum state, even though the plaintiffs' alleged injury was felt entirely in the forum state. Walden dealt with natural persons experiencing a real injury, not corporations experiencing an artificial injury. Moreover, here Mylan Pharma has contacts with Delaware beyond its injuring a Delaware corporation—such as its registration to do business in Delaware, registration with the Delaware Board of Pharmacy, and its litigation history in Delaware. Hence, here, unlike in Walden, the "forum State's exercise of jurisdiction over an out-of-state intentional
Finally, as noted by Judge Sleet in AstraZeneca, it appears that specific jurisdiction has traditionally been disfavored as a basis for finding personal jurisdiction in an ANDA case. See AstraZeneca, 72 F.Supp.3d at 557-58, 2014 WL 5778016, at *6 (citing Zeneca Ltd. v. Mylan Pharmaceuticals, Inc., 173 F.3d 829 (Fed.Cir.1999) and In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 693 F.Supp.2d 409, 420-21 (D.Del.2010)). Like Judge Sleet, the undersigned Judge does not view this as a bar to finding specific jurisdiction here. In a post-Daimler world, it may very well be that specific jurisdiction becomes a more prominent basis for exercising jurisdiction in ANDA cases.
Accordingly, the Court concludes that it may, consistent with the Due Process Clause, exercise specific jurisdiction over Mylan Pharma, which is a second basis for the Court to deny the motion to dismiss as to Mylan Pharma.
Plaintiffs contend that this Court may exercise specific jurisdiction over Mylan Inc. as well. To the extent Plaintiffs' theory is that the direct contacts among Mylan Inc., Delaware, and this lawsuit are sufficient to justify the exercise of specific jurisdiction over Mylan Inc., the Court disagrees. Unlike Mylan Pharma, Mylan Inc. is not registered to do business in Delaware and there is no allegation that Mylan Inc. was directly involved in the preparation or submission of Mylan's ANDA Filing. The only potentially relevant contacts among Mylan Inc., Delaware, and the instant lawsuit are Mylan Inc.'s involvement in other ANDA litigation (see D.I. 1 at ¶ 20), the incorporation of 20 Mylan Inc. subsidiaries in Delaware (see D.I. 15 at 17; D.I. 16, Ex E at 37-40), and the vast extent of Mylan Inc.'s presence in United States (see D.I. 1 at ¶ 19; D.I. 16, Ex. E at 5). These contacts, on their own, are insufficient to show that Mylan Inc. purposefully directed activities at Delaware and that Plaintiffs' claims arise out of or relate to those activities.
Plaintiffs alternatively contend that this Court can exercise specific jurisdiction over Mylan Inc. on the basis of an agency relationship between Mylan Inc. and Mylan Pharma, its wholly-owned subsidiary. Plaintiffs allege: "Defendants are agents of each other and/or work in concert with each other with respect to the development, regulatory approval, marketing, sale, and distribution of pharmaceutical products throughout the United States, including into Delaware," including with respect to Mylan's ANDA Filing at issue here. (D.I. 1 at 6) While "the mere fact that a non-Delaware corporation owns a Delaware subsidiary is not sufficient in itself to justify Delaware's exercise of personal jurisdiction over the non-Delaware parent," ACE & Co. v. Balfour Beatty PLC, 148 F.Supp.2d 418, 422-23 (D.Del. 2001), "[u]nder the agency theory, the court may attribute the actions of a subsidiary company to its parent where the subsidiary acts on the parent's behalf or at the parent's direction," Intellectual Ventures I LLC v. Nikon Corp., 935 F.Supp.2d 787, 793 (D.Del.2013) (quoting C.R. Bard, Inc. v. Guidant Corp., 997 F.Supp. 556, 560 (D.Del.1998)). "When applying the agency theory, a court should focus its inquiry on the arrangement between the parent and the subsidiary, the authority given in that arrangement, and the relevance of that
Plaintiffs have alleged that Mylan Pharma's relevant contacts can be attributed to Mylan Inc. Plaintiffs request that, if the Court concludes they have failed to meet their burden of establishing personal jurisdiction over either of the Defendants, the Court allow Plaintiffs to undertake jurisdictional discovery instead of dismissing Plaintiffs' claims. (See D.I. 15 at 19)
Generally, "jurisdictional discovery should be allowed unless the plaintiffs' claim [of personal jurisdiction] is clearly frivolous." Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 107 F.3d 1026, 1042 (3d Cir.1997) (internal quotation marks omitted); see also Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir.2003). However, a court should not permit discovery as a matter of course simply because a plaintiff has named a particular party as a defendant. See Hansen v. Neumueller GmbH, 163 F.R.D. 471, 474 (D.Del.1995). Instead, before allowing jurisdictional discovery to proceed, "[t]he court must be satisfied that there is some indication that this particular defendant is amenable to suit in this forum." Id. at 475.
Plaintiffs' allegation of an agency relationship between Mylan Inc. and Mylan Pharma is not clearly frivolous. In addition to the undisputed parent-subsidiary relationship, Plaintiffs have specifically alleged that Mylan Pharma's appointment of a registered agent for service of process in Delaware can be attributed to Mylan Inc. (See D.I. 1 at 6) This, taken together with allegations about Mylan Inc's 20 Delaware subsidiaries and nationwide distribution of products (see D.I. 16, Ex. E), at least suggests, with reasonable particularity, the possible existence of requisite contacts among Mylan Inc., Delaware, and this litigation.
Therefore, the Court will permit Plaintiffs to take limited jurisdictional discovery into whether the Court may exercise specific personal jurisdiction over Mylan Inc. based on an agency theory.
For the reasons stated above, the Court will deny the motion to dismiss as to Mylan Pharma. This Court has general jurisdiction over Mylan Pharma due to Mylan Pharma's consent, and it has specific jurisdiction over Mylan Pharma based on Mylan Pharma's relationship with Delaware and the particular circumstances of this ANDA litigation. With respect to Mylan Inc., this Court may not exercise general jurisdiction, because Mylan Inc. is not "at home" here and has not consented to general jurisdiction here. However, the Court will permit Plaintiffs to take limited jurisdictional discovery in order to determine whether the Court may exercise specific jurisdiction over Mylan Inc.
An appropriate Order follows.
At Wilmington this
For the reasons stated in the Opinion issued this same date,
IT IS HEREBY ORDERED that:
1. Defendants' Motion to Dismiss for Lack of Jurisdiction Over the Person (D.I.10) is
2. Plaintiffs' request for jurisdictional discovery (D.I. 15 at 19) is
3. The parties shall meet and confer and shall submit, no later than January 28, 2015, a joint status report containing their proposal(s) as to how this matter should proceed in light of the Court's ruling. Among other things, the parties shall provide their view(s) as to the scope and timing of jurisdictional discovery, as well as a procedure by which, following the completion of such discovery, Mylan Inc. may renew its motion to dismiss for lack of personal jurisdiction.
Mylan points out that the Sternberg Court itself undertook a due process analysis, despite stating that this inquiry was unnecessary, and ultimately found sufficient minimum contacts on which to base the exercise of jurisdiction there. See 550 A.2d at 1117 ("[D]espite our conclusion that a minimum contact analysis is not required, in view of the broad language in Shaffer, we will examine [plaintiff's] claim according to the standards enunciated in International Shoe."). The defendant in Sternberg, of course, did not have the benefit of the Delaware Supreme Court's analysis in Sternberg at the time it was deciding to register to do business in Delaware. The same potential prejudice, due to arguable lack of notice, is not present here, given the 22-year gap between the Sternberg decision and Mylan Pharma's decision to register in Delaware.
