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In re Talc Product Liability Litigation

Superior Court of Delaware

September 10, 2018

IN RE: TALC PRODUCT LIABILITY LITIGATION

          Submitted: July 30, 2018

         Defendants Johnson & Johnson and Johnson & Johnson Consumer Inc. 's Motion to Dismiss Based on Lack of Personal Jurisdiction. GRANTED.

         Defendants Johnson & Johnson and Johnson & Johnson Consumer Inc. 's Motion for a Protective Order to Quash Jurisdictional Discovery Requests. GRANTED.

          R. Joseph Hrubiec, Esquire and W. Steven Berman, Esquire, NAPOLI SHKOLNIK, LLC, Wilmington, Delaware. Hunter J. Shkolnik, Esquire, NAPOLI SHKOLNIK, PLLC, Melville, New York. Attorneys for Plaintiffs.

          Raeann Warner, Esquire, JACOBS & CRUMPLAR, P.A., Wilmington, Delaware. Attorney for Plaintiffs.

          Michael P. Kelly, Esquire and Daniel J. Brown, Esquire, McCARTER & ENGLISH, LLP, Wilmington, Delaware. Jessica D. Miller, Esquire, SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP, Washington, D.C. (argued). Attorneys for Defendants Johnson & Johnson and Johnson & Johnson Consumer Inc. (f/k/a Johnson & Johnson Consumer Companies, Inc.).

          OPINION

          BUTLER, J.

         INTRODUCTION

         The Court is here presented with a host of Complaints, all to the same effect. Each alleges that Defendants, in various capacities, were involved in the production, marketing, and sale of talc, specifically in the form of baby powder. It is alleged that this product, advertised as smooth and soothing to babies, causes cancer in adult women. While multiple Defendants are named, only Johnson & Johnson and its subsidiary, Johnson & Johnson Consumer Inc. (f/k/a Johnson & Johnson Consumer Companies, Inc.) (collectively, "JNJ"), have moved to dismiss the claims brought by nonresident Plaintiffs for lack of personal jurisdiction. JNJ also moves for a protective order, seeking to foreclose the nonresident Plaintiffs from taking "jurisdictional discovery." After careful consideration, the Court finds that it is without personal jurisdiction over JNJ as to the claims of the nonresident Plaintiffs. The Court further finds that the nonresident Plaintiffs have not set forth a plausible basis to believe that limited jurisdictional discovery will establish the requisite jurisdiction, and the Court will therefore also grant JNJ's Motion for a Protective Order.

         BACKGROUND

         These complaints allege that women who use talcum powder in their perineal area over a period of time contracted ovarian cancer. Talc was manufactured, marketed, and sold by the defendants as baby powder.

         Lawsuits making similar allegations have been filed in multiple jurisdictions across the United States.[1] In one such case in Missouri, Johnson & Johnson moved to dismiss a claim brought by a nonresident of Missouri on personal jurisdiction grounds. The motion to dismiss was denied by the trial court. But after a jury awarded the plaintiff $72 million in damages, a Missouri appellate court reversed the trial court's personal jurisdiction ruling, effectively wiping out the verdict.[2]

         Over 200 talc lawsuits have been filed in Delaware. The Plaintiffs in these suits hail from all over the country.[3] Two law firms represent all of the Plaintiffs in these Delaware cases. The Complaints are substantively quite similar in their factual allegations and legal theories.

         A. Plaintiffs' Allegations

         Plaintiffs allege that JNJ and the other named Defendants produced, marketed, sold, and shipped talc-based products over a number of years. They claim that this production and marketing persisted despite convincing evidence developed by studies that talc was associated with ovarian cancer when used by women on the perineum. Plaintiffs allege that JNJ and the other Defendants, acting individually, collectively and through industry councils and related lobbying efforts, mounted a concerted effort to avoid warning the public of the dangers associated with the use of talc. According to Plaintiffs, JNJ continued its sales and marketing campaign of talc products despite being explicitly advised of its dangers from several creditable sources.

         B. JNJ's Motion to Dismiss

         JNJ has not filed an answer to the Complaint, arguing instead that the Court should dismiss the Complaints of nonresident plaintiffs because the Court has neither "general" nor "specific" jurisdiction over JNJ. Plaintiffs also served JNJ with a number of "jurisdictional discovery" requests intended to support the Court's exercise of personal jurisdiction over JNJ. Rather than responding to the discovery, JNJ has filed a Motion for a Protective Order, seeking exemption from responding to the discovery demand because, as JNJ sees it, discovery will not yield facts that would support jurisdiction in Delaware.

         C. Procedural History

         At the Court's request, Plaintiffs' counsel first filed their opposition to JNJ's Motion for a Protective Order. While this issue was under consideration, the United States Supreme Court handed down its decision in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County.[4] The Court then invited the parties to file supplementary briefs on the impact of that decision.

         After reviewing the briefing at that stage, it became clear that the jurisdictional discovery issue was completely intertwined with the question of jurisdiction itself. Plaintiffs then obliged the Court's request to respond to the Motion to Dismiss as well.[5]

         STANDARD OF REVIEW

         Allegations in a complaint may be made broadly and need not describe the basis upon which the Court has jurisdiction.[6] But on a motion to dismiss for lack of personal jurisdiction under Superior Court Civil Rule 12(b)(2), the plaintiff bears the burden to make out a, prima facie case establishing jurisdiction over a nonresident defendant.[7] A prima facie case requires the "production of enough evidence to allow the fact-trier to infer the fact at issue and rule in the party's favor."[8] The burden of establishing a defendant's amenability to suit is not merely restricted to the allegations contained in the complaint.[9] Rather, extra-pleading material may be used to supplement the complaint and establish jurisdiction.[10] Therefore, in considering a motion to dismiss under Rule 12(b)(2), the Court is not bound by the pleadings and may consider other matters such as affidavits and briefs of the parties in making determinations regarding personal jurisdiction.[11]

         Ordinarily, when jurisdiction is questioned, the Court will permit jurisdictional discovery.[12] But when the record plainly shows that such discovery will yield nothing to substantiate jurisdiction in the forum, discovery will be foreclosed.[13] A plaintiff is not entitled to jurisdictional discovery where the assertion of personal jurisdiction "lacks the minimal level of plausibility needed to permit discovery to go forward."[14]

         ANALYSIS

         I. JNJ's Motion to Dismiss Based on Lack of Personal Jurisdiction

         The due process concerns relating to the law of personal jurisdiction have been evolving in recent years. Because of the importance of this evolution in this analysis, a close examination of the recent jurisprudence is warranted.

         A. The United States Supreme Court's Recent Rulings on Personal Jurisdiction

         In 2011, the United States Supreme Court decided Goodyear Dunlop Tires Operations, S.A. v. Brown[15] Goodyear was a suit in a North Carolina court filed by North Carolina residents who were injured in a bus accident in France, alleging a failure of tires manufactured by an Ohio company and sold by its European subsidiaries. The European subsidiaries of Goodyear moved to dismiss for want of personal jurisdiction; Goodyear USA did not join in the motion.

         The Court differentiated between general jurisdiction-jurisdiction unrelated to the conduct complained of-and specific jurisdiction-jurisdiction specifically arising out of the conduct complained of. The Court held that general jurisdiction could only be had where a defendant is "essentially at home" in the forum state.[16]While a corporation is certainly "at home" in its place of incorporation or its principal place of business, [17] the Court did not further refine what "continuous and systematic activities" would qualify a corporation as being "essentially at home" in a forum and thus appropriate for the assertion of general jurisdiction. But the Court did specifically repudiate any "stream of commerce" theory of general jurisdiction:

"Flow of a manufacturer's products into the forum . . . may bolster an affiliation germane to specific jurisdiction. . . But ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant."[18]

         On the other hand, specific jurisdiction is limited to adjudication of "issues deriving from, or connected with, the very controversy that establishes jurisdiction."[19] The only substantial relationship of North Carolina to the controversy was that the plaintiffs resided there. According to the Court, this was an insufficient basis to support specific jurisdiction.

         Then in 2014, the Court decided two personal jurisdiction cases: Daimler AG v. Bauman[20] and Walden v. Fiore.[21]

         In Daimler, Argentinian residents brought tort claims in a California court, alleging that an Argentinian Daimler subsidiary (MB Argentina) conspired with Argentinian security forces to kidnap and kill employees of MB Argentina. The plaintiffs named only the Daimler parent company ~ Daimler, AG ~ not MB Argentina or its U.S. subsidiary, MBUSA. No plaintiff resided in California and all of the tortious activities occurred in Argentina. Nevertheless, plaintiffs argued that because MBUSA sold many automobiles in California and had a regional office there, those activities should be imputed to the parent, Daimler AG, which, it was argued, used agents to conduct substantial business in California. The Supreme Court rejected this argument.

         Daimler gave the Court an opportunity to review and expand on what it had said previously about general jurisdiction in Goodyear.

Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business; it simply typed those places paradigm all-purpose forums. Plaintiffs would have us look beyond the exemplar bases Goodyear identified and approve the exercise of general jurisdiction in every State in which a corporation "engages in a substantial, continuous, and systematic course of business." That formulation, we hold, is unacceptably grasping.[22]

         Although MBUSA had multiple facilities and sales in California, those activities were not enough to support general jurisdiction over the parent company under an agency theory. Neither Daimler nor MBUSA were incorporated or headquartered in California. According to the Court, the Ninth Circuit erred in concluding "that Daimler, even with MBUSA's contacts attributed to it, was at home in California, and hence subject to suit there on claims by foreign plaintiffs having nothing to do with anything that occurred in or had its principal impact in California."[23]

         Less than two months after Daimler, the Court decided Walden v. Fiore.[24] In Walden, a DEA agent working at a Georgia airport seized a large amount of cash from a couple that was passing through Georgia on their way home to Nevada. The couple eventually got their money back, but nonetheless filed suit against the agent in federal court in Nevada. The Supreme Court held that Nevada could not assert jurisdiction over the Georgia DEA agent.

         The Court further clarified the proper focus of specific jurisdiction:

For a State to exercise jurisdiction consistent with due process, the defendant's suit-related conduct must create a substantial connection with the forum State .... First, the relationship must arise out of contacts that the "defendant himself creates with the forum State .... Second, our "minimum contacts" analysis looks to the defendant's contacts with the forum State itself, not the defendant's contacts with persons who reside there .... [And, finally, ] [d]ue process requires that a defendant be haled into court in a forum State based on his own affiliation with the State, not based on the "random, fortuitous, or attenuated" contacts he makes by interacting with other persons affiliated with the State."[25]

         The Court made clear that for purposes of determining specific jurisdiction, "it is the defendant, not the plaintiff or third parties, who must create contacts with the forum State."[26]

         This brings us to the Supreme Court's June 2017 ruling in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County.[27] But first, a brief history may be helpful.

         More than 600 plaintiffs filed suit in California against Bristol-Myers Squibb ("Bristol-Myers"), alleging injuries caused by ingestion of a Bristol-Myers drug called Plavix. Only a few of the plaintiffs were California residents. Bristol-Myers is a Delaware corporation with headquarters in New York. Bristol-Myers moved to dismiss the complaints of the nonresident plaintiffs, arguing that California courts had no jurisdiction over the tort claims of nonresident plaintiffs.

         In the United States Supreme Court, the majority first held that the California Supreme Court correctly concluded that there could be no general jurisdiction because, despite Bristol-Myers's activities in California, it was incorporated in Delaware and headquartered in New York with a major research and development presence in New Jersey. The fact that Bristol-Myers sold a lot of Plavix in California and had a large presence there via a distribution contract with McKesson was insufficient to move the Court to consider Bristol-Myers "at home" there.

         As to specific jurisdiction, the Court, citing to Goodyear, stated that the Court's settled jurisdictional principles controlled the case:

In order for a court to exercise specific jurisdiction over a claim, there must be an "affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State." When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State. ("[E]ven regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales").[28]

         The Court rejected the California Supreme Court's reasoning that specific jurisdiction could be relaxed or mollified by a defendant's activities in the forum that were unrelated to the conduct giving rise to the complaint.[29] It likewise rejected the notion that the similarity between the California residents' complaints ...


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