Perrigo Co. v. Merial Ltd., CIVIL ACTION FILE NO. 1:15-CV-3674-SCJ

• Citation: 215 F.Supp.3d 1329
• Decision Date: 06 October 2016
• Docket Number: CIVIL ACTION FILE NO. 1:15-CV-3674-SCJ, CIVIL ACTION FILE NO. 1:15-CV-0013-SCJ
• Parties: PERRIGO COMPANY, Sergeant's Pet Care Products, Inc., d/b/a Perrigo Animal Health; Velcera, Inc.; and Fidopharm, Inc., Plaintiffs, v. MERIAL LIMITED d/b/a Merial, LLC, Defendant. Merial, Inc. and Merial Sas, Plaintiffs v. Perrigo Company, Sergeant's Pet Care Products, Inc. d/b/a Perrigo Animal Health; Velcera, Inc., and Fidopharm, Inc., Defendants.
• Court: U.S. District Court — Northern District of Georgia

215 F.Supp.3d 1329

PERRIGO COMPANY, Sergeant's Pet Care Products, Inc., d/b/a Perrigo Animal Health; Velcera, Inc.; and Fidopharm, Inc., Plaintiffs,

v.MERIAL LIMITED d/b/a Merial, LLC, Defendant.

Merial, Inc. and Merial Sas, Plaintiffs

v.Perrigo Company, Sergeant's Pet Care Products, Inc. d/b/a Perrigo Animal Health; Velcera, Inc., and Fidopharm, Inc., Defendants.

CIVIL ACTION FILE NO. 1:15-CV-3674-SCJ

CIVIL ACTION FILE NO. 1:15-CV-0013-SCJ

United States District Court, N.D. Georgia, Atlanta Division.

Signed October 06, 2016

Kamron T.M. Hasan, Michael S. Degan, Husch, Blackwell Law Firm, Kelly N. Pleas, Perrigo Animal Health, Omaha, NE, Mark Edward McGrath, Paul Garrity, Rena Andoh, Robert S. Friedman, Tyler E. Baker, Sheppard Mullin Richter & Hampton, New York, NY, Cody Sams Wigington, Joseph Matthew Englert, Michael Scott French, Wargo & French LLP, Atlanta, GA, for Plaintiffs.

Carrie S. Dolton, Michael T. Hilgers, Gober, Hilgers Law Firm, Omaha, NE, Frank Garrett Smith, III, Matthew Wolff Howell, Alston & Bird, LLP, Atlanta, GA, John Patrick Elsevier, Jones Day, San Diego, CA, Judy Catherine Jarecki-Black, Merial Limited, Duluth, GA, Edward D. Tolley, Cook, Noell, Tolley & Bates, Athens, GA, for Defendant.

ORDER

HONORABLE STEVE C. JONES UNITED STATES DISTRICT JUDGE

In this two-case consolidated contract dispute between competing pet flea medicine manufacturers, defendants in Civil Action No. 1:15–cv–013 (plaintiffs in Civil Action No. L15–cv–3674)¹ move to dismiss that case for lack of personal jurisdiction. Doc. 164. Plaintiffs oppose. Before addressing the merits of the present dispute, the Court first disposes of several related procedural motions.

I. PRELIMINARY MATTERS

A. The Seal Motions

Both sides move to seal their respective filings and associated attachments related to Defendants' underlying motion to dismiss.² See docs. 166; 168; 172. Neither side opposes the other's requests, and both sides have filed redacted, public versions of the documents they wish sealed. See, e.g. , doc. 170.

Noting that the Court sealed the Complaint in Case 13 and several exhibits "in their entirety" because they refer to "highly confidential, commercially sensitive information,"³ Defendants seek equal treatment for their opening brief (doc. 165-1) and two declarations in support (docs. 165-2, 165-3). Doc. 166. Those filings, they contend, relate to the same information that justified sealing the Complaint. Id. at 3. Over no opposition (per Local Rule 7.1 (B), no response equals no opposition) and because the motion is otherwise well-supported, the Court GRANTS Defendants' motion. Doc. 166. Docket entries 165-1; 165-2; and 165-3 shall remain sealed.

Plaintiffs likewise want portions of their response and two exhibits sealed. Defendants do not oppose. The motion is well-supported, so it is GRANTED. Doc. 169. Docket entries 168; 168-1; and 168-2 shall remain sealed.⁴ All the same can be said for Defendants' motion to seal their reply. Consequently, the Court GRANTS that motion, too. Doc. 172. Doc. 171 shall remain sealed.

B. Defendants' Surreply Request

Despite recognizing "that the Court does not favor surreplies," Plaintiffs "request[ ] the opportunity to address" arguments allegedly "raised for the first time in [Defendants'] reply brief." Doc. 173 at 3. Specifically, they want to respond to Defendants' arguments that:

(i) because [they] initially moved for a transfer of venue under 28 U.S.C. § 1404(a), [Defendants'] did not waive personal jurisdiction, even though other courts have held that a § 1404(a) transfer motion is the equivalent of a Rule 12 motion for purposes of waiver and (ii) subsection (1) of the Georgia Long Arm Statute, [O.C.G.A.] § 9–10–91, allegedly requires continuous and systematic transaction of business, even though that statute requires only transaction of 'any' business.

Doc. 173 at 3 (record citations omitted).

Opposing, Defendants emphasize that this Court strongly disfavors surreplies. See doc. 174 at 5-6. They also insist that none of their reply brief arguments are "new." Id. at 4. Instead, Defendants say, the "arguments simply respond to arguments raised in [Plaintiffs'] response brief." Doc. 174 at 7 (quoting Chemence Med. Prods . , Inc. v. Medline Indus., Inc. , 119 F.Supp.3d 1376, 1383 (N.D. Ga. 2015) ).

It's true that neither the Federal Rules nor this Court's Local Rules contemplate surreplies. Fedrick v. Mercedes Benz USA, LLC , 366 F.Supp.2d 1190, 1197 (N.D. Ga. 2005). "To allow ... [them] as a regular practice would put the court in the position of refereeing an endless volley of briefs." Garrison v. N.E. Ga. Med. Or., Inc. , 66 F.Supp.2d 1336, 1340 (N.D. Ga. 1999). That said, "where a valid reason for such additional briefing exists, such as where the movant raises new arguments in its reply," this Court permits that extra volley. Playnation Play Sys., Inc. v. Velex Corp. , No. 1:14–CV–01046–RWS, 2016 WL4166250, at *1 (N.D. Ga. Apr. 27, 2016).

At best, Defendants' reply brief arguments qualify as responses to Plaintiffs' own oppositional contentions. For example, Plaintiffs' response insists that defendants "waived the ability to challenge personal jurisdiction by previously filing a Rule 12 motion in this case without raising lack of personal jurisdiction as a defense." Doc. 168 at 17. In reply, Defendants point out that their motion to transfer or stay (the aforementioned Rule 12 motion) never cited Rule 12 (they claim it fell under 28 U.S.C. § 1404, the venue statute) and thus they never waived their current jurisdictional challenge. Doc. 171 at 7-9. That's not a "new" argument; rather, it is responds, albeit in slightly different terms, to an argument Plaintiffs raised in their response. Fedrick , 366 F.Supp.2d at 1197. The same is true for Defendants' "systematic and continuous argument," to which Plaintiffs wish to surreply. Hence, the Court DENIES Plaintiffs' motion for leave to file such a brief. Doc. 173.

II. BACKGROUND⁵

Some years ago, Defendant Merial Limited (Merial) created a topical pet flea medicine—"Frontline Plus"—using a combination of two pesticides. Doc. 161 at 4-6. "Frontline Plus products are covered by U.S. Patent No. 6,096,329 [ (329 Patent) ]." Id. at 5. In 2010, Sergeant's Pet Care Products, Inc. (Sergeant's) filed a patent reexamination request challenging the 329 Patent's validity. Id. at 7. Sergeant's lost in June 2011. Id. at 8.

In "early 2011," after seeking reexamination but before that proceeding ended, Sergeant's began selling "a generic version of Frontline Plus" named FiproGard Plus. Doc. 161 at 7. Sergeant's and Merial thereafter entered into an agreement (the "Sergeant's Agreement") that required Sergeant's to, among other things, cease selling any 329 Patent -infringing product if the reexamination resolved in Merial's favor. Id. at 7–8. In return, Merial agreed not to sue Sergeant's for infringement. Id. at 7. When Sergeant's lost on reexamination, the parties amended the Sergeant's Agreement to affirm that Sergeant's would not make or sell infringing products. Id. at 8–9.

Approximately one year later (October 2012), defendant Perrigo acquired Sergeant's. Id. at 17. Now, Sergeant's does business as a Perrigo subsidiary, "Perrigo Animal Health." Id. Six months after that (April 2013), Perrigo also acquired Velcera (id at 22), who itself had been involved in 329 Patent -related litigation with Merial that settled via an agreement (the "Velcera Agreement")⁶ obligating Velcera to cease product sales in exchange for Merial agreeing not to sue. Id. at 10–15.

That same year, Merial became involved in 329 Patent litigation with third-party Ceva Animal Health, LLC. Doc. 161 at 17. Settlement discussions ultimately ended in an agreement whereby Merial granted Ceva a license under the 329 Patent to sell a Frontline Plus-style product. Id. at 23. Per the Velcera Agreement, Merial notified Velcera that Ceva now possessed the rights to sell 329 Patent -related products. Id. at 24.

The Ceva license precipitated Perrigo, Sergeant's, and Velcera's suit against Merial in the District of Nebraska for breach of the Velcera Agreement. Doc. 161 at 25-26; doc. 1 (Case 3674's complaint, filed December 12, 2014). Less than a month later, Merial filed Case 13 against Defendants in this Court contending that they violated the Sergeant's Agreement by "making, selling, offering for sale, or importing into the United States" a 329 Patent -infringing product. Doc. 161 at 28. Merial also moved to dismiss or transfer the Nebraska action—the Nebraska court chose transfer. This Court later consolidated Case 13 and Case 3764. Doc. 160.

Defendants move to dismiss Case 13, insisting that the Court lacks personal jurisdiction. Doc. 165. According to Defendants, they never transacted business in Georgia, do not possess the "continuous and systematic ... affiliations with [Georgia]" necessary to "render [them] essentially at home" here (doc. 165-1 at 18), and never initiated in-state contacts that gave rise to the allegedly offensive conduct at issue in Case 13. Id. at 21. Without those connections, the Court, say Defendants, may not assert its authority. Id. at 8.

Plaintiffs believe Defendants waived any personal jurisdiction challenge "by previously filing a Rule 12 motion in this case without raising lack of personal jurisdiction as a defense" (doc. 168 at 17), and via conduct that implicitly acquiesced to the Court's authority. Id. at 19. Waiver aside, Plaintiffs contend that Defendants transacted business and committed tortious acts in Georgia, either or both of which relate to the conduct underlying plaintiffs' claims in Case 13. Id. at 20–27. Doing so, they say, exposes Defendants to this Court's authority. Id.

III. ANALYSIS

A. Waiver

" '[A]ny time a defendant makes a pre-answer' motion under Federal Rule of Civil Procedure 12, he or she must include, on penalty of waiver, the defenses set forth in subdivisions (2) through (5) of Rule 12(b). If one or more of these defenses[, which include lack of...