K–v Pharm. Co. v. Cia

• Decision Date: 03 August 2011
• Docket Number: No. 10–3403.,10–3403.
• Citation: 99 U.S.P.Q.2d 1699,648 F.3d 588
• Parties: K–V PHARMACEUTICAL COMPANY, Appellant,v.J. URIACH & CIA, S.A., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

648 F.3d 588

99 U.S.P.Q.2d 1699

K–V PHARMACEUTICAL COMPANY, Appellant,

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

No. 10–3403.

United States Court of Appeals, Eighth Circuit.

Submitted: April 14, 2011.Filed: Aug. 3, 2011.

Stephen Howard Rovak, argued, James F. Wiley, on the brief, St. Louis, MO, for appellant.John Bailie Scherling, argued, La Jolla, CA, John W. Moticka, St. Louis, MO, Geoffrey C. Mason, Mark Boland, Raja N. Saliba, Washington, DC, on the brief, for appellee.Before WOLLMAN, GILMAN,¹ and MELLOY, Circuit Judges.GILMAN, Circuit Judge.

K–V Pharmaceutical Company (KV), a Delaware corporation with its principal place of business in St. Louis, Missouri, sued J. Uriach & CIA, S.A. (Uriach), a Spanish corporation with its principal place of business in Barcelona, Spain, for breach of contract and misappropriation of trade secrets. The lawsuit was filed in the United States District Court for the Eastern District of Missouri.

Uriach moved to dismiss the complaint on three grounds: (1) lack of personal jurisdiction; (2) forum non conveniens; and (3) failure to state a claim upon which relief can be granted. The district court granted Uriach's motion to dismiss for lack of personal jurisdiction, declined to reach the forum-non-conveniens argument, and denied the motion for failure to state a claim without prejudice. KV timely appealed. For the reasons set forth below, we reverse the district court's decision to dismiss the complaint for lack of personal jurisdiction and remand the case for further proceedings consistent with this opinion.

I. Background

KV and Uriach entered into a contract in May 1993 to develop, manufacture, and sell an antifungal cream with an ingredient developed by Uriach—Flutrimazole—and a drug-delivery system developed by KV—Site Release. Uriach was to sell the antifungal cream throughout the world, except for the United States, Canada, and Mexico, where KV had the rights to sell the cream. The parties amended their contract twice, first in October 1998 and later in June 2002.

KV finally terminated the contract in 2005. Uriach then allegedly failed to return certain trade secrets and confidential information to KV, and later began marketing and selling a cream that allegedly uses KV's Site Release system. KV sued Uriach in Missouri for breach of contract (specifically, a breach of the confidentiality provisions, which continue for 10 years after contract termination) and for misappropriation of trade secrets, seeking damages and an injunction to prevent Uriach from selling the antifungal cream in question.

In granting Uriach's motion to dismiss for lack of personal jurisdiction, the district court found that Uriach's “only contact with Missouri are letters, telephone calls, one meeting, and a Missouri choice of law provision. These contacts, considered in the aggregate, are insufficient to establish personal jurisdiction.” KV Pharmaceutical Co. v. J. Uriach & CIA S.A., 743 F.Supp.2d 1073, 1079 (E.D.Mo.2010) (citation omitted.) The district court further reasoned that the contract's “contemplated future consequences would not occur in Missouri” because Uriach “agree[d] to do tasks that were entirely restricted to Europe or excluded the United States, Canada, and Mexico.” Id. at 1078 (internal quotation marks omitted).

Uriach argues that we should affirm the district court's personal-jurisdiction decision or, in the alternative, that we should dismiss KV's complaint based on either forum non conveniens or on the complaint's failure to state a claim. We will consider each of these arguments in turn below.

II. Analysis

A. Personal jurisdiction

The primary issue on appeal is whether the district court has personal jurisdiction over Uriach. We review personal-jurisdiction issues de novo. Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir.2004). To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that personal jurisdiction exists, which is accomplished by pleading sufficient facts “to support a reasonable inference that the defendant[ ] can be subjected to jurisdiction within the state.” Id. (original brackets and internal quotation marks omitted); accord Digi–Tel Holdings, Inc. v. Proteq Telecommunications (PTE), Ltd., 89 F.3d 519, 522 (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) (internal quotation marks omitted), the “showing must be tested, not by the pleadings alone, but by the affidavits and exhibits” supporting or opposing the motion, Dever, 380 F.3d at 1072 (internal quotation marks omitted). We must view the evidence in the light most favorable to the plaintiff and resolve all factual conflicts in its favor in deciding whether the plaintiff made the requisite showing. Digi–Tel, 89 F.3d at 522.

Personal jurisdiction in a diversity case exists “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 (internal quotation marks omitted). “Missouri's long-arm statute authorizes personal jurisdiction over defendants who, inter alia, transact business [or] make a contract ... within the state.” Viasystems, Inc. v. EBM–Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 593 (8th Cir.2011) (citing Mo.Rev.Stat. § 506.500.1). In adopting the long-arm statute, the Missouri legislature “intended to provide for jurisdiction, within the specific categories enumerated in the statutes [e.g., transacting business or making a contract within the state,] to the full extent permitted by the due process clause.” State ex rel. Metal Serv. Ctr. of Ga., Inc.v. Gaertner, 677 S.W.2d 325, 327 (Mo.1984) (en banc). The reasons why Uriach's actions fit within both of these categories are the same as the reasons why extending personal jurisdiction over Uriach comports with the Due Process Clause. We will therefore focus on the due process issue rather than needlessly repeat ourselves.

Due process requires that the defendant purposefully establish “minimum contacts” in the forum state such that asserting personal jurisdiction and maintaining the lawsuit against the defendant does not offend “traditional conceptions of fair play and substantial justice.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 464, 474–477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (brackets and internal quotation marks omitted). The defendant must have engaged in “some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Id. at 475, 105 S.Ct. 2174 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). This purposeful-availment requirement is met where the “defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.” Id. at 474, 105 S.Ct. 2174 (quoting World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)).

Based on these principles, the Eighth Circuit has established five factors that must be considered in determining whether sufficient minimum contacts exist for personal jurisdiction: “(1) the nature and quality of the contacts with the forum state; (2) the quantity of the contacts; (3) the relationship of the cause of action to the contacts; (4) the interest of [the forum state] in providing a forum for its residents; and (5) the convenience or inconvenience to the parties.” Johnson, 614 F.3d at 794. Although “the first three factors are primary factors, and the remaining two are secondary factors,” we look at all of the factors and the totality of the circumstances in deciding whether personal jurisdiction exists. Id.

Before addressing the five factors set forth above, we first turn to the role of contracts in the personal-jurisdiction analysis. A contract between a plaintiff and an out-of-state defendant is not sufficient in and of itself to establish personal jurisdiction over the defendant in the plaintiff's forum state. Burger King, 471 U.S. at 478–79, 105 S.Ct. 2174. Personal jurisdiction, moreover, does not turn on “mechanical tests or on conceptualistic theories of the place of contracting or of performance.” Id. at 478, 105 S.Ct. 2174 (ellipses and internal quotation marks omitted). The Supreme Court has instead

emphasized the need for a “highly realistic” approach that recognizes that a “contract” is “ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction.” It is these factors—prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing—that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum.

Id. at 479, 105 S.Ct. 2174 (quoting Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316–17, 63 S.Ct. 602, 87 L.Ed. 777 (1943)).

With these principles in mind, Uriach's purposeful contacts with the state of Missouri include the following:

• Letters, emails, and telephone calls to KV before May 1993 that were part of the contract negotiations.

• Letters, emails, and telephone calls to KV after the contract was executed but before the contract was amended for the second time in 2002. The head of Uriach's legal department, Joaquin Uriach, admits that the parties had numerous communications from July 1993 to February 1994 “regarding the information Uriach needed, among other things, to prepare the pharmaceutical dossier to obtain regulatory approval in Spain.” He also admits that “[a]t least twenty Uriach personnel were actively involved in the contract negotiations with KV, the years of communication with KV[,] and the work Uriach undertook to develop the vaginal cream.” The fact...