AstraZeneca AB v. Mylan Pharm., Inc.

• Citation: 72 F.Supp.3d 549
• Decision Date: 05 November 2014
• Docket Number: Civil Action No. 14–696–GMS
• Parties: AstraZeneca AB, Plaintiff, v. Mylan Pharmaceuticals, Inc., Defendant.
• Court: U.S. District Court — District of Delaware

72 F.Supp.3d 549

AstraZeneca AB, Plaintiff

v.Mylan Pharmaceuticals, Inc., Defendant.

Civil Action No. 14–696–GMS

United States District Court, D. Delaware.

Signed November 5, 2014

Michael P. Kelly, Esquire, and Daniel M. Silver, Esquire, McCarter & English, LLP, counsel for plaintiff. Of counsel: Charles E. Lipsey, Esquire, James B. Monroe, Esquire, Robert F. Shaffer, Esquire, and Maximilienne Bishop, Esquire, Finnegan, Henderson, Farabow, Garret & Dunner, L.L.P.

Richard L. Horwitz, Esquire, David E. Moore, Esquire, and Erich W. Struble, Esquire, Potter Anderson & Corroon LLP, counsel for defendant. Of counsel: Joshua Mack, Esquire, and Douglas H. Carsten, Esquire, Wilson Sonsini Goodrich & Rosati.

OPINION

SLEET, U.S. District Judge

I. INTRODUCTION

AstraZeneca AB (“AstraZeneca”) filed a complaint against defendant Mylan Pharmaceuticals, Inc. (“Mylan”) on June 2, 2014, alleging patent infringement of U.S. Patent Nos. 7,951,400 (“the '400 Patent”), RE44,186 (“the '186 Patent”), and 8,628,799 (“the '799 Patent”). (D.I. 1.) The cause of action was triggered when Mylan filed two Abbreviated New Drug Applications (“ANDA”) Nos. 205980 and 205981 with the U.S. Food and Drug Administration (“FDA”) for approval to market saxaglitptin hydrochloride tablets—generic versions of AstraZeneca's ONGLYZA® drug product—and saxaglitptin hydrochloride and metformin hydrochloride extended-release tablets—generic versions of AstraZeneca's KOMBIGLYZE™ XR drug product—prior to expiration of the '400 Patent, the '186 Patent, and the '799 Patent. (Id. ¶¶ 1–3.)

Currently before the court is Mylan's motion to dismiss this suit for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), filed on June 25, 2014. (D.I. 8.) For the reasons that follow, Mylan's motion to dismiss is denied.

II. BACKGROUND

AstraZeneca is a company operating and existing under the laws of Sweden, with its principal place of business in Södertälje, Sweden. (D.I. 1, ¶ 4.) AstraZeneca's U.S. subsidiary, AstraZeneca Pharmaceuticals LP (“AstraZeneca U.S.”) is a limited partnership operating and existing under the laws of Delaware, with its principal place of business in Wilmington, Delaware. (Id. ¶ 5.) Mylan is incorporated in West Virginia and has its principal place of business in Morgantown, West Virginia. (Id. ¶ 7.)

AstraZeneca filed this lawsuit in the U.S. District Court for the District of Delaware. In its complaint, AstraZeneca alleges:

10. This Court has jurisdiction over Mylan because, inter alia, this action arises from actions of Mylan directed toward Delaware and because Mylan has purposefully availed itself of the rights and benefits of Delaware law by engaging in systematic and continuous contacts with Delaware. Mylan regularly and continuously transacts business within the State of Delaware, including by selling pharmaceutical products in Delaware, either on its own or through its affiliates. Upon information and belief, Mylan derives substantial revenue from the sale of those products in Delaware and has availed itself of the privilege of conducting business within the State of Delaware.

11. Mylan has previously been sued in this judicial district without objecting on the basis of lack of personal jurisdiction and has availed itself of Delaware courts through the assertion of counterclaims and by filing suits in Delaware.

(Id. ¶¶ 10, 11.)

In its motion to dismiss, Mylan challenges AstraZeneca's characterization of Mylan's Delaware contacts. The two ANDAs at issue in this case were prepared in West Virginia and filed in Maryland with the FDA. (D.I. 10, ¶ 10.) Mylan has no property or employees in Delaware, and Mylan conducts essentially no direct sales in Delaware. (Id. ¶¶ 6–8.) Mylan is, however, registered to do business in Delaware and has appointed a registered agent to accept service of process in Delaware, pursuant to 8 Del. C. §§ 371, 376. (D.I. 15, Ex. A.) Mylan has also litigated in the District of Delaware numerous times, mostly as a defendant, but also as a plaintiff in a handful of cases. (Id. Ex. E.)

III. STANDARD OF REVIEW

The court must dismiss a case when it lacks personal jurisdiction over the defendant. Fed.R.Civ.P. 12(b)(2) ; Freres v. SPI Pharma, Inc., 629 F.Supp.2d 374, 382 (D.Del.2009). The plaintiff bears the burden of establishing that the defendants are properly subject to the court's jurisdiction. See ICT Pharm., Inc. v. Boehringer Ingelheim Pharm., Inc., 147 F.Supp.2d 268, 270–71 (D.Del.2001).

Personal jurisdiction is technically derived from two separate sources: state statutory law and U.S. constitutional due process. Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1359–60 (Fed.Cir.2001). The Delaware long-arm statute, however, has been construed “broadly to confer jurisdiction to the maximum extent possible under the Due Process Clause,” so the focus of the inquiry traditionally rests on the constitutional component. 10 Del. C. § 3104 ; see Merck & Co., Inc. v. Barr Labs., Inc., 179 F.Supp.2d 368, 372 (D.Del.2002) (citing Hercules Inc. v. Leu Trust & Banking Ltd., 611 A.2d 476, 480–81 (Del.1992) ).¹

“[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. State of Wash., Office of Unemployment Compensation & Placement, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (internal quotation marks omitted). Since the Supreme Court initially announced this rule in International Shoe, the doctrine has split into two categories: specific and general jurisdiction. Specific jurisdiction exists where “the defendant has ‘purposefully directed’ his activities at residents of the forum, and the litigation results from alleged injuries that ‘arise out of or relate to’ those activities.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472–73, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (internal citations omitted) (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984) ; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) ). In contrast, general jurisdiction does not require that the cause of action arise out of contacts with the forum state. Helicopteros, 466 U.S. at 421, 104 S.Ct. 1868. Rather, general jurisdiction exists where the defendant's contacts with the forum “are so continuous and systematic as to render it essentially at home in the forum State.” Daimler AG v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 761, 187 L.Ed.2d 624 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, –––U.S. ––––, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011) ). Recent Supreme Court opinions confirm that “specific jurisdiction has become the centerpiece of modern jurisdiction theory,” whereas general jurisdiction—often referred to as “all-purpose” jurisdiction—“[has played] a reduced role.” Id. at 755 (alteration in original) (quoting Goodyear, 131 S.Ct. at 2854 ).

IV. DISCUSSION

Faced with Mylan's challenge to personal jurisdiction, AstraZeneca “bears the burden of showing the basis for this Court's jurisdiction.” See Power Integrations, Inc. v. BCD Semiconductor Corp., 547 F.Supp.2d 365, 369 (D.Del.2008). AstraZeneca maintains that (1) Mylan has consented to general jurisdiction in Delaware, (2) Mylan is subject to specific jurisdiction in Delaware, and (3) Mylan is subject to general jurisdiction in Delaware. (D.I. 15.) The court addresses each of these arguments.²

A. General Jurisdiction

AstraZeneca argues that Mylan's contacts with Delaware are sufficient to render it “essentially at home” here. AstraZeneca points to the fact that Mylan is registered to do business in Delaware and allegedly derives substantial revenue from the sales of its products in Delaware, via an “extensive network of physicians, hospitals, long-term care facilities, group purchasing organizations, retailers, and wholesalers.”

(Id. at 10–11.) AstraZeneca also alleges that Mylan is “at home in Delaware district court” because of its involvement in numerous patent- and ANDA-related lawsuits over the past two decades. (Id. at 11; Ex. E.)

In ANDA litigation, general jurisdiction traditionally provided the basis to assert jurisdiction over generic drug company defendants. See, e.g., In re Cyclobenzaprine Hydrochloride Extended–Release Capsule Patent Litig., 693 F.Supp.2d 409, 421 (D.Del.2010) (focusing on defendant's “substantial revenue” from Delaware drug sales in upholding general jurisdiction). Since the Supreme Court's recent decision in Daimler, however, the standard for exercising general jurisdiction has shifted. See Daimler, 134 S.Ct. 746. The court finds that AstraZeneca has failed to allege contacts sufficient to render Mylan at home in Delaware, in light of Daimler.

In Daimler, elaborating on its previous decision in Goodyear, 131 S.Ct. 2846, the Supreme Court explained that a corporation is “at home” for the purposes of general jurisdiction in only a narrow set of circumstances: “With respect to a corporation, the place of incorporation and principal place of business are paradig[m] ... bases for general jurisdiction.” Daimler, 134 S.Ct. at 760 (alteration in original) (internal quotations marks omitted). The Court was careful to emphasize that the “place of incorporation” and the “principal place of business” exemplars were not exhaustive. Id. at 760–61. But at the same time, the Court rejected the idea that “continuous and systematic” contacts, alone, are sufficient to confer jurisdiction. Id. at 761–62 (finding such a test for general jurisdiction would be “unacceptably grasping” and “exorbitant”). The role of general jurisdiction is a limited one: “afford 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 760.³

The court...