Kv Pharm. Co. v. J. Uriach & Cia S.A.

• Decision Date: 28 September 2010
• Docket Number: Case No. 4:09cv1700 TCM.
• Citation: 743 F.Supp.2d 1073
• Court: U.S. District Court — Eastern District of Missouri
• Parties: KV PHARMACEUTICAL COMPANY, Plaintiff,v.J. URIACH & CIA S.A., Defendant.

743 F.Supp.2d 1073

KV PHARMACEUTICAL COMPANY, Plaintiff,

v.J. URIACH & CIA S.A., Defendant.

Case No. 4:09cv1700 TCM.

United States District Court, E.D. Missouri, Eastern Division.

Sept. 28, 2010.

James F. Wiley, Jr., Stephen H. Rovak, Sonnenschein and Nath, LLP, St. Louis, MO, for Plaintiff.Geoffrey C. Mason, Mark Boland, Raja N. Saliba, Sughrue and Mion, Washington, DC, John W. Moticka, Stinson and Morrison, St. Louis, MO, John B. Scherling, Sughrue Mion, PLLC, La Jolla, CA, for Defendant.

MEMORANDUM AND ORDER

THOMAS C. MUMMERT, III, United States Magistrate Judge.

This is an action for breach of contract and misappropriation of trade secrets brought by KV Pharmaceutical Company (Plaintiff), a Delaware corporation with its principal place of business in Missouri, against J. Uriach & CIA, S.A. (Defendant), a Spanish corporation with its principal place of business in Barcelona. Pending is the opposed motion of Defendant to dismiss for lack of personal jurisdiction and forum non conveniens.¹ [Doc. 28]

Background

Plaintiff alleges in its complaint that it entered into an agreement with Defendant in May 1993 “for the development, manufacture, and sale” of an antifungal cream with an ingredient, Flutrimazole, developed by Defendant and a drug delivery system, Site Release, developed by Plaintiff. (Compl. ¶¶ 7, 12–13.) This agreement provided, among other things, that Plaintiff was “to use its best efforts to develop” the cream for sale by Defendant and Defendant was to maintain the confidentiality of the information furnished by Plaintiff. ( Id. ¶¶ 14, 18.) Defendant was also to take the necessary steps to obtain approval from the countries in the European Economic Community (EEC) to manufacture, sell, and distribute in those countries the cream developed by Plaintiff. ( Id. ¶ 2.4.) Plaintiff, however, had the “exclusive right to the manufacture, use, and sale” of the cream in the United States, Canada, and Mexico. ( Id. ¶ 4.1.) This agreement further provided that it “shall be deemed to have been entered into and shall be governed by and construed under the laws of the State of Missouri....” ( Id. ¶ 20. Ex. 1 ¶ 14. 1.)

The parties amended this agreement in June 2002, and in 2005 Plaintiff sent Defendant a letter terminating the agreement pursuant to a provision in that amendment. ( Id. ¶¶ 21, 23.) Defendant then allegedly failed to return certain trade secrets and information to Plaintiff as required and subsequently began marketing and selling a cream using Plaintiff's Site Release system. ( Id. ¶¶ 24–25.) This action followed.

In its pending motion, Defendant argues that this Court lacks personal jurisdiction over it because its only contact with Missouri is its contract with Plaintiff. Defendant additionally argues that the case should be dismissed for forum non conveniens because Spain has a stronger public interest in the outcome of the dispute, which its courts are fully capable of resolving.

In support of its motion, Defendant submits the unrefuted declaration of its officer, Joaquin Uriach, averring that Plaintiff's and Defendant's business relationship began in 1992 when Plaintiff wrote Defendant proposing a marketing partnership in Spain for a product Plaintiff had developed. (Uriach Decl. ¶ 7; Decl. Ex. 1.) Defendant was not interested, and so informed Plaintiff by letter. (Uriach Decl. ¶ 7; Decl. Ex. 2.) In this same letter, Defendant inquired whether it could use Plaintiff's Biosert technology with its Flutrimazole. ( Id.) Flutrimazole, discovered by Defendant in Spain, is the active ingredient in a vaginal anti-fungal cream, Gine Micetal®, sold exclusively in Spain by Defendant. (Uriach Decl. ¶¶ 5, 6.) Plaintiff responded by letter that its scientists believed that Flutrimazole could be incorporated into either its Biosert and Site Release systems, suggested that it provide a development proposal, and noted that the author, Plaintiff's vice-president, would soon be in Europe and would be happy to meet with Defendant. (Uriach Decl. Ex. 3.) Subsequently, in April 1992, Plaintiff's vice-president meet with Defendant's representative in Paris, France. (Uriach Decl. Ex. 5.) In February 1993, two of Plaintiff's representatives, including the vice-president, traveled to Defendant's offices in Barcelona. (Uriach Decl. ¶ 9.) Three months later, they entered into their agreement. ( Id. ¶ 10.)

In September 2001, Defendant's representatives met with Plaintiff's representatives at its Missouri facility. ( Id. ¶ 14.) Four years later, the parties' agreement was terminated by Plaintiff. (Compl. ¶ 23.)

Mr. Uriach avers that Defendant “has no agent for service of process in Missouri”; does not own, sell, or lease property in Missouri; has no employees, offices, service or other facilities, telephone numbers, bank accounts, or loan applications in Missouri; does no advertising and attends no regular events, including trade shows or other pharmaceutical industry meetings, in Missouri; and does not own any subsidiary or other controlled entity with any of the foregoing contacts. (Uriach Decl. ¶ 4.) Moreover, although Defendant does maintain a website, that website is international only. ( Id.) Defendant also has not been a party to any previous litigation in Missouri. ( Id.) All its efforts pursuant to the parties' 1993 agreement were performed in Spain. ( Id. ¶ 19.)

Plaintiff contends that this Court may exercise personal jurisdiction over Defendant given (a) its more than ten-year relationship with Plaintiff, a Missouri corporation, pursuant to an agreement formed under Missouri law, (b) the parties' intent that “critical activities such as the development of prototypes and the drafting of study protocols ... be performed in Missouri”; (c) the Missouri location of the scientists and technicians whose knowledge was to be transferred; (d) the Missouri location of “the substantial bulk of all the technical expertise related to the delivery vehicle”; and (e) the commission by Defendant of a tort in Missouri, the harm from the tortious acts having been suffered in Missouri. (Pl. Mem. at 5–6.)

Discussion

“To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must state sufficient facts in the complaint to support a reasonable inference that [the defendant] can be subjected to jurisdiction within the state.” Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir.2004). Once personal jurisdiction is challenged, the plaintiff has the burden of making a prima facie showing of such facts. Id.; accord Burlington Indus., Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir.1996). Although “[t]he evidentiary showing required at the prima facie stage is minimal,” Johnson v. Arden, 614 F.3d 785, 794 (8th Cir.2010) (quotations omitted), this “showing must be tested, not by the pleadings alone, but by the affidavits and exhibits presented with the motions and in opposition thereto,” Dever, 380 F.3d at 1072 (quotations omitted). When determining whether a plaintiff has made such a showing, the court must view the evidence in the light most favorable to plaintiff and must resolve any factual conflict in the plaintiff's favor. Digi–Tel Holdings, Inc. v. Proteq Telecomms., Ltd., 89 F.3d 519, 522 (8th Cir.1996).

“A federal court in a diversity action my assume jurisdiction over nonresident defendants only to the extent permitted by the long-arm statute of the forum state and by the Due Process Clause.” Dever, 380 F.3d at 1073 (quotations omitted). In Missouri, the prima facie case to establish personal jurisdiction over a non-resident defendant requires a showing that “ ‘(1) the cause of action arose out of an activity covered by Missouri's long-arm statute,² ... and (2) the defendant had sufficient minimum contacts with Missouri to satisfy the requirements of due process.’ ” Johnson, 614 F.3d at 794 (quoting Berry v. Berry (In re Marriage of Berry), 155 S.W.3d 838, 840 (Mo.Ct.App.2005)) (footnote added). The “ ‘ultimate objective [of Missouri's long-arm statute is] to extend the jurisdiction of the courts of [Missouri] over nonresident defendants to that extent permissible under the Due Process Clause of the Fourteenth Amendment of the Constitution of the United States.’ ” Clune v. Alimak AB, 233 F.3d 538, 541 (8th Cir.2000) (quoting State v. Pinnell, 454 S.W.2d 889, 892 (Mo.1970) (en banc)). “Accordingly, Missouri courts have interpreted the statute broadly to cover those cases where the Due Process Clause permits the assertion of personal jurisdiction.” Id. Thus, this Court's inquiry into whether the assertion of personal jurisdiction over Defendant satisfies Missouri's long-arm statute is coextensive with its inquiry into whether the assertion satisfies due process. See Id.; Porter v. Berall, 293 F.3d 1073, 1075 (8th Cir.2002).

To satisfy due process, “traditional notions of fair play and substantial justice must not be offended.” Porter, 293 F.3d at 1075 (quotations omitted); accord Dever, 380 F.3d at 1073; Burlington Indus., Inc., 97 F.3d at 1102. “A defendant must have warning that his activities may result in his being haled into court in a particular jurisdiction and must invoke the benefits and protections of that jurisdiction by purposefully availing himself of the privilege of conducting those activities.” Porter, 293 F.3d at 1075. A “ ‘random, fortuitous, or attenuated’ ” connection between the nonresident defendant and the plaintiff will not suffice. First Nat'l Bank of Lewisville, Ark. v. First Nat'l Bank of Clinton, Ky., 258 F.3d 727, 729 (8th Cir.2001) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)).

The Eighth Circuit Court of Appeals has “set forth five factors courts must consider when determining whether there are sufficient minimum contacts to confer jurisdiction.” Johnson, 614 F.3d at 794 (citing Aftanase v. Economy Baler Co., 343 F.2d 187, 197 (8th Cir.1965)). “These factors include: (1) the nature and...