Bristol-Myers Squibb Co. v. Matrix Labs. Ltd.

• Decision Date: 12 August 2013
• Docket Number: No. 12 Civ. 5846(PAE).,12 Civ. 5846(PAE).
• Citation: 964 F.Supp.2d 287
• Parties: BRISTOL–MYERS SQUIBB COMPANY, Plaintiff, v. MATRIX LABORATORIES LIMITED, now known as Mylan Laboratories Limited, Defendants.
• Court: U.S. District Court — Southern District of New York

964 F.Supp.2d 287

BRISTOL–MYERS SQUIBB COMPANY, Plaintiff,

v.MATRIX LABORATORIES LIMITED, now known as Mylan Laboratories Limited, Defendants.

No. 12 Civ. 5846(PAE).

United States District Court,

S.D. New York.

Aug. 12, 2013.

Henninger Simons Bullock, Lisa Robyn Plush, Richard A. Spehr, Mayer Brown LLP, New York, NY, for Plaintiff.

Jessica Leigh Margolis, Wilson Sonsini Goodrich & Rosati, Michael S. Sommer, Wilson, Sonsini, Goodrich & Rosati P.C., New York, NY, for Defendants.

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge:

Plaintiff Bristol–Myers Squibb Company (“BMS”) brings this breach of contract action against defendant Matrix Laboratories Limited (“Matrix”). Matrix moves to dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(2) and 12(b)(6), arguing that this Court lacks personal jurisdiction over Matrix and that the Amended Complaint fails to state a claim for breach of contract. BMS opposes the motion and seeks leave to take jurisdictional discovery in the event the Court finds personal jurisdiction lacking. For the reasons that follow, the Court finds that BMS has made a prima facie showing of personal jurisdiction. However, Matrix's motion to dismiss is granted because the Amended Complaint fails to state a claim. BMS's request to take jurisdictional discovery is denied as moot.

I. Background¹A. Factual Background

BMS is a Delaware corporation with its principal place of business in New York. Am. Compl. ¶ 15. It sells the well-known HIVS/AIDS drug atazanavir under the brand name Reyataz. It has patents or pending patent applications related to atazanavirin more than 50 countries. Id. ¶ 1 & n. 1. Matrix is an Indian corporation with its principal place of business in India. Id. ¶ 16. It is one of the world's largest generic drug manufacturers. It is in the business of manufacturing, marketing, and selling generic pharmaceutical products throughout the United States. Id.

On April 17, 2011, BMS and Matrix entered into an “immunity from suit” agreement (the “Agreement”), which is at the heart of this litigation. The Agreement granted Matrix the right to manufacture, distribute, and sell generic atazanavir in certain underdeveloped countries without fear of patent litigation by BMS. Id. ¶¶ 2, 30. BMS agreed to forego any royalties or profits associated with Matrix's sale of generic atazanavir under the Agreement, and BMS provided the manufacturing technology necessary to allow Matrix to produce the drug on its own. Id. ¶¶ 3–4. The purpose of the Agreement was to facilitate broad low-cost distribution of generic atazanavir to areas in dire need of HIV/AIDS treatment and prevention. Id. ¶ 2.

Significant here, the Agreement immunizes Matrix's sale of generic atazanavir only in the “Territory,” which is defined to include India and 48 countries in sub-Saharan Africa. See Agreement § 1.10 & App. C. The Territory does not include Venezuela. Id.; Am. Compl. ¶¶ 29, 31. In November 2011, Matrix asked BMS to consent to Matrix's selling generic atazanavir in Venezuela. BMS did not consent, however, because BMS had supplied Reyataz to Venezuela for several years and had two patent applications pending in Venezuela at the time of Matrix's request. Id. ¶¶ 5, 31–32. Twice more in early 2012, Matrix sought BMS's consent to Matrix's engaging in such sales, but BMS again declined. Id. ¶¶ 6–8.

Nevertheless, in February 2012, Matrix sold a significant amount of generic atazanavir, estimated as a one-year's supply, to the Pan American Health Organization (“PAHO”), allegedly knowing that PAHO would then distribute it in Venezuela. Id. ¶¶ 9, 33. This product later was shipped to the Venezuelan Ministry of Health and sold throughout Venezuela. Id. ¶¶ 9, 12, 35. BMS alleges that Matrix's sale to PAHO was in breach of the Agreement. BMS alleges that PAHO's ensuing sales within Venezuela caused BMS to lose a year's worth of sales of branded Reyataz to Venezuela, causing estimated damages of $15 million. Id. ¶¶ 14, 36.

B. Procedural History

On July 30, 2012, BMS filed the original Complaint. Dkt. 1. On March 4, 2013, after the parties stipulated to several extensions of Matrix's time to answer or otherwise respond to the Complaint, see Dkt. 4–6, Matrix filed a motion to dismiss, arguing that this Court lacks personal jurisdiction over Matrix and that the Complaint fails to state a claim for breach of contract. Dkt. 11. On April 16, 2013, BMS filed an Amended Complaint. Dkt. 17.

On May 15, 2013, Matrix filed the pending motion to dismiss, Dkt. 18; a memorandum of law in support of that motion, Dkt. 19 (“Matrix Br.”); and two declarations in support of that motion, Dkt. 20, 21 (Declaration of Rajeev Mukundun (“Mukundun Decl.”)). In that motion, Matrix again argues that the Court lacks personal jurisdiction, see Matrix Br. 8–21, and that the Amended Complaint fails to state a claim for breach of contract, see id. at 21–25. On June 10, 2013, BMS filed a cross-motion for jurisdictional discovery, Dkt. 23; a memorandum of law in opposition to Matrix's motion and in support of BMS's request for jurisdictional discovery, Dkt. 25 (“BMS Br.”); and a declaration in opposition to Matrix's motion and in support of BMS's motion, Dkt. 24. On June 27, 2013, Matrix filed a memorandum of law, Dkt. 27 (“Matrix Reply Br.”), and a declaration, Dkt. 28, in further support of its motion and in opposition to BMS's motion. On July 8, 2013, BMS filed a memorandum of law in further support of its motion for jurisdictional discovery. Dkt. 29 (“BMS Reply Br.”).

II. Personal Jurisdiction

Matrix first moves to dismiss the Amended Complaint for lack of personal jurisdiction pursuant to Rule 12(b)(2). See Matrix Br. 8–21; Matrix Reply Br. 4–22. BMS opposes that motion. It requests leave to take jurisdictional discovery in the event the Court finds personal jurisdiction lacking. See BMS Br. 4–21; BMS Reply Br. 1–10.

A. Applicable Legal Standard

“[T]he plaintiff bears the burden of establishing that the court has jurisdiction over the defendant.” DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir.2001) (citation omitted); accord In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659, 673 (2d Cir.2013). “[T]he showing a plaintiff must make to defeat a defendant's claim that the court lacks personal jurisdiction over it ‘varies depending on the procedural posture of the litigation.’ ” Dorchester Fin. Secs, Inc. v. Banco BRJ, S.A., No. 12–770–cv, 2013 WL 3335784, at *3 (2d Cir. July 3, 2013) (per curiam) (quoting Ball v. Metallurgie Hoboken–Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.1990)). “Prior to discovery, a plaintiff challenged by a jurisdiction testing motion may defeat the motion by pleading in good faith, legally sufficient allegations of jurisdiction. At that preliminary stage, the plaintiff's prima facie showing may be established solely by allegations.” Id. (quoting Ball, 902 F.2d at 197);accord In re Terrorist Attacks, 714 F.3d at 673 (“In order to survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists.” (citation omitted)).

“This showing may be made through the plaintiff's ‘own affidavits and supporting materials, containing an averment of facts that, if credited, would suffice to establish jurisdiction over the defendant.’ ” S. New Eng. Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 138 (2d Cir.2010) (quoting Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir.2001)). The Court “construe[s] the pleadings and affidavits in the light most favorable to plaintiffs, resolving all doubts in their favor.” Dorchester, supra, at 85 (quoting S. New Eng. Tel., 624 F.3d at 138);accord A.I. Trade Fin., Inc. v. Petra Bank, 989 F.2d 76, 79–80 (2d Cir.1993) (“[W]here the issue is addressed on affidavits, all allegations are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor, notwithstanding a controverting presentation by the moving party.” (citation omitted)). Nevertheless, the Court “will not draw argumentative inferences in the plaintiff's favor” and need not “accept as true a legal conclusion couched as a factual allegation.” In re Terrorist Attacks, 714 F.3d at 673 (citations omitted); accord Licci ex rel. Licci v. Lebanese Canadian Bank, 673 F.3d 50, 59 (2d Cir.2012).

B. Discussion

The amenability of a foreign corporation, such as Matrix, to suit in federal court in a diversity action is determined in accordance with the law of the forum state—here, New York. See Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir.2002); Metro. Life Ins. Co. v. Robertson–Ceco Corp., 84 F.3d 560, 567 (2d Cir.1996). “[I]n resolving questions of personal jurisdiction in a diversity action, a district court must conduct a two-part inquiry. First, it must determine whether the plaintiff has shown that the defendant is amenable to service of process under the forum state's laws; and second, it must assess whether the court's assertion of jurisdiction under these laws comports with the requirements of due process.” Metro. Life Ins., 84 F.3d at 567;accord Ehrenfeld v. Mahfouz, 489 F.3d 542, 547 (2d Cir.2007).

Under New York C.P.L.R. § 301, a foreign corporation is subject to general jurisdiction in New York courts “if it has engaged in such a continuous and systematic course of ‘doing business' here that a finding of its ‘presence’ in this jurisdiction is warranted.” Landoil Res. Corp. v. Alexander & Alexander Servs., Inc., 77 N.Y.2d 28, 33, 563 N.Y.S.2d 739, 565 N.E.2d 488 (1990) (citation omitted); accord Jazini v. Nissan Motor Co., 148 F.3d 181, 184 (2d Cir.1998) (“New York courts may exercise personal jurisdiction over a foreign corporation that is engaged in such a continuous and systematic course of ‘doing business' in New York as to warrant a finding of its ‘presence’ in the state, even if the cause of action is unrelated to the defendant's New York activities.” (...