United States District Court, D. Delaware
FOREST LABORATORIES, INC., FOREST LABORATORIES HOLDINGS, LTD., MERZ PHARMA GMBH & CO. KGAA, MERZ PHARMACEUTICALS GMBH, and ADAMAS PHARMACEUTICALS, INC., Plaintiffs,
AMNEAL PHARMACEUTICALS LLC, AMNEAL PHARMACEUTICALS OF NEW YORK, LLC, AMERIGEN PHARMACEUTICALS, INC., AMERIGEN PHARMACEUTICALS LTD., and MYLAN PHARMACEUTICALS, INC., Defendants.
REPORT AND RECOMMENDATION
CHRISTOPHER J. BURKE, Magistrate Judge.
Plaintiffs Forest Laboratories, Inc., Forest Laboratories Holdings, Ltd. (referred to herein, together with Forest Laboratories, Inc., as "Forest"), Merz Pharma GmbH & Co. KGaA, Merz Pharmaceuticals GmbH, and Adamas Pharmaceuticals, Inc. (collectively "Plaintiffs") filed the above-captioned Hatch-Waxman action against Defendants Amneal Pharmaceuticals LLC, Amneal Pharmaceuticals of New York, LLC, Amerigen Pharmaceuticals, Inc., Amerigen Pharmaceuticals Ltd., and Mylan Pharmaceuticals, Inc. (collectively "Defendants"). Presently before the Court is Mylan Pharmaceuticals, Inc.'s ("Mylan") Motion to Dismiss for lack of personal jurisdiction, filed pursuant to Federal Rule of Civil Procedure 12(b)(2) (the "Rule 12(b)(2) Motion"). (D.I. 25) For the reasons set forth herein, the Court recommends that Mylan's Rule 12(b)(2) Motion be DENIED.
A. Procedural Posture
This action in part arises out of Mylan's submission of Abbreviated New Drug Application ("ANDA") No. 206032 to the United States Food and Drug Administration. (D.I. 1 at ¶ 45) Plaintiffs assert that Mylan's ANDA filing constitutes infringement of eight patents, all of which relate to Forest's Namenda XR® brand memantine hydrochloride extended release capsules. ( Id. at ¶¶ 11, 29, 47)
Plaintiffs filed suit in the instant case on April 21, 2014. ( Id. at 17) On June 11, 2014, in lieu of answering the Complaint, Mylan filed the Rule 12(b)(2) Motion, asserting that the Complaint against it should be dismissed because the Court lacks personal jurisdiction over Mylan. (D.I. 25) The Rule 12(b)(2) Motion was fully briefed as of July 10, 2014. (D.I. 48) On July 15, 2014, Chief Judge Leonard P. Stark referred the Rule 12(b)(2) Motion to the Court for resolution. (D.I. 52) At Plaintiffs' and Mylan's request, (D.I. 49, 51), the Court heard oral argument regarding the motion on September 22, 2014. (D.I. 68, hereinafter "Tr.")
Mylan, a wholly owned subsidiary of Mylan, Inc., is a West Virginia corporation with its principal place of business in Morgantown, West Virginia. (D.I. ¶ at ¶ 10; D.I. 27 at ¶ 5) Mylan manufacturers and/or distributes generic drugs that are sold in the United States. (D.I. 1 at ¶ 10) It has been registered to transact business in Delaware since April 2010, and has likewise complied with similar statutory registration requirements in 21 other states. (D.I. 27 at ¶ 4; D.I. 43, ex. N)
None of Mylan's employees or officers are located in Delaware, nor does it have any offices or facilities in the State. (D.I. 27 at ¶ 3) Mylan's net sales in Delaware for 2013 are reported to be zero. ( Id. at ¶ 4)
C. Mylan's Other Cases in Delaware
Due in part to its role as a generic drug manufacturer, Mylan is a frequent litigant in the District of Delaware, often appearing as a defendant in ANDA litigation. ( See D.I. 41, ex. 0 (listing 58 cases involving Mylan over the last 20 years in the District of Delaware)) In several of its currently pending cases, Mylan has asserted that this Court lacks personal jurisdiction over it, based on the recent holding by the Supreme Court of the United States in Daimler AG v. Bauman, 134 S.Ct. 746 (2014) ( "Daimler" ). ( See, e.g., Civil Action No. 14-696-GMS, D.I. 8; Civil Action No. 14-935-LPS, D.I. 10; Civil Action No. 14-820-RGA, D.I. 14; Civil Action No. 14-1278-GMS, D.I. 12)
The District Judges in two of these cases (Chief Judge Stark and Judge Gregory M. Sleet) have addressed Mylan's motion, coming to opposite conclusions as to whether the Court has general jurisdiction over Mylan after Daimler. See Acorda Therapeutics, Inc. v. Mylan Pharms. Inc., ___ F.Supp. 3d. ___, 2015 WL 186833, at *20 (D. Del. Jan. 14, 2015) (holding, inter alia, that this Court has general jurisdiction over Mylan in light of Mylan's consent); AstraZeneca AB v. Mylan Pharms., Inc., ___ F.Supp. 3d ___, 2014 WL 5778016, at *5 (D. Del. Nov. 5, 2014) (holding the opposite). In one of these two cases, Judge Sleet certified the issue for interlocutory appellate review by the United States Court of Appeals for the Federal Circuit. Astrazeneca AB v. Aurobindo Pharma Ltd., Civil Action No. 14-664-GMS, 2014 WL 7533913, at *1 (D. Del. Dec. 17, 2014).
II. STANDARD OF REVIEW
Rule 12(b)(2) requires the Court to dismiss any case in which it lacks personal jurisdiction. Fed.R.Civ.P. 12(b)(2). As an initial matter, if a jurisdictional defense is raised by way of a Rule 12(b)(2) motion, then the plaintiff bears the burden of showing the basis for jurisdiction. Eastman Chem. Co. v. AlphaPet Inc., Civ. Action No. 09-971-LPS-CJB, 2011 WL 6004079, at *3 (D. Del. Nov. 4, 2011); Power Integrations, Inc. v. BCD Semiconductor Corp., 547 F.Supp.2d 365, 369 (D. Del. 2008). To satisfy its burden at this stage of the litigation, in a case where the district court has not held an evidentiary hearing, the plaintiff must only establish a prima facie case of personal jurisdiction. Metcalfe v. Renaissance Marine Inc., 566 F.3d 324, 330 (3d Cir. 2009); Sam Mannino Enters., LLC v. John W. Stone Oil Distrib., LLC, 26 F.Supp. 3d 482, at 485 (W.D. Pa. 2014); Power Integrations, Inc., 547 F.Supp.2d at 369. All factual inferences to be drawn from the pleadings, affidavits and exhibits must be drawn in the plaintiffs favor at this stage. Eastman Chem. Co., 2011 WL 6004079, at *3; Power Integrations, Inc., 547 F.Supp.2d at 369; Brautigam v. Priest, No. 99-365-SLR, 2000 WL 291534, at *2 (D. Del. Mar. 2, 2000).
The Supreme Court has recognized two classifications of personal jurisdiction: "general jurisdiction" and "specific jurisdiction." Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S.Ct. 2846, 2853-54 (2011) (internal quotation marks and citations omitted). The Supreme Court distinguished between these concepts in International Shoe Co. v. Washington, 326 U.S. 310 (1945), which remains the "canonical opinion" in the area of personal jurisdiction. Daimler, 134 S.Ct. at 754 (citation omitted)). "Specific jurisdiction" encompasses causes of action that "aris[e] out of or relate to the [defendant foreign corporation's] contacts with the forum." Goodyear, 131 S.Ct. at 2853 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)). "General jurisdiction" encompasses complaints arising from dealings that are distinct from the corporation's activities in the state. Goodyear, 131 S.Ct. at 2853-54 (citing International Shoe, 326 U.S. at 318); see also Daimler, 134 S.Ct. at 754. A court may exercise general jurisdiction over a foreign corporation only when the corporation's "affiliations with the State [in which suit is brought] are so continuous and systematic' as to render [it] essentially at home in the forum State.' Daimler, 134 S.Ct. at 751 (quoting Goodyear, 131 S.Ct. at 2851).
Ordinarily, "[t]o establish personal jurisdiction, the plaintiff must adduce facts sufficient to satisfy two requirements-one statutory and one constitutional." Eastman Chem. Co., 2011 WL 6004079, at *3. In most cases, the Court must first consider whether the defendant's actions fall within the scope of Delaware's long-arm statute, 10 Del. C. § 3104(c). Id .; Power Integrations, Inc., 547 F.Supp.2d at 369. Second, the Court must determine whether the exercise of jurisdiction comports with the defendant's right to due process. Eastman Chem. Co., 2011 WL 6004079, at *3 (citing Int'l Shoe Co., 326 U.S. at 316); Power Integrations, Inc., 547 F.Supp.2d at 369. Due process is satisfied if the Court finds that "minimum contacts' exist between the non-resident defendant and the forum state, "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Power Integrations, Inc., 547 F.Supp.2d at 369 (quoting Int 1 Shoe Co., 326 U.S. at 316).
In this action, however, Plaintiffs assert that a minimum contacts analysis is unnecessary, on the theory that due process is satisfied because Mylan has consented to jurisdiction in Delaware by registering to do business in the State. (D.I. 40 at 7-10) This argument is addressed in detail below.
A. Plaintiffs' Argument Regarding Consent to Jurisdiction
Plaintiff argues that this Court has personal jurisdiction over Mylan because Mylan has consented to jurisdiction in Delaware by registering to do business here and by appointing a Delaware agent for service of process, pursuant to 8 Del. C. §§ 371 & 376 (hereinafter, the "Delaware registration statute"). (D.I. 40 at 5-7 (arguing that "[r]esolution of Mylan's motion boils down to [this] single, straightforward issue")) Plaintiffs argue that consent-by-registration was a valid path to establishing personal jurisdiction prior to Daimler, and that it remains so thereafter. ( Id. at 5-10) To that end, Plaintiffs note that the Supreme Court of the State of Delaware has long held that a corporation that authorizes its agent to receive service of process in compliance with the Delaware registration statute has consented to the exercise of personal jurisdiction in Delaware. ( Id. at 5-6); see also Sternberg v. O'Neil, 550 A.2d 1105, 1116 (Del. 1988). Thus, according to Plaintiffs, foreign defendants who register to do business in Delaware are subject to general personal jurisdiction in Delaware courts. (D.I. 40 at 5-6)
For the reasons set forth below, the Court agrees with Plaintiffs.
B. Consent to General Jurisdiction
In analyzing this issue, the Court will first address whether, prior to Daimler, a foreign corporation could validly consent to personal jurisdiction through compliance with the terms of a state registration statute like the one at issue here. After answering this question affirmatively, the Court will then consider the particular terms of the Delaware registration statute and whether, in light of Supreme Court precedent pre-Daimler, a foreign corporation that complied with those terms did, in fact, consent to general jurisdiction in the State. After also finding the answer to that question to be "yes, " the Court will then assess whether Mylan in fact complied with the terms of the Delaware registration statute. And lastly, after ...