The Rockefeller Univ. V. Ligand Pharmaceuticals, 08 Civ. 2755(PKC).

• Decision Date: 19 May 2008
• Docket Number: No. 08 Civ. 2755(PKC).,08 Civ. 2755(PKC).
• Citation: 581 F.Supp.2d 461
• Parties: THE ROCKEFELLER UNIVERSITY, a New York Not-for-profit corporation, Plaintiff, v. LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation, Defendant.
• Court: U.S. District Court — Southern District of New York

581 F.Supp.2d 461

THE ROCKEFELLER UNIVERSITY, a New York Not-for-profit corporation, Plaintiff, v. LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation, Defendant.

No. 08 Civ. 2755(PKC).

United States District Court, S.D. New York.

May 19, 2008.

COPYRIGHT MATERIAL OMITTED

Peter Neil Wang, Anat Hakim, Douglas Scott Heffer, Richard C. Peet, Foley & Lardner LLP, Washington, DC, for plaintiff.

Gregg I. Anderson, Knobbe Martens Olson & Bear, LLP, San Diego, CA, Simon Joel Kasha Miller, Greenberg Traurig, LLP, New York City, for defendants.

MEMORANDUM AND ORDER

P. KEVIN CASTEL, District Judge.

Defendant Ligand Pharmaceuticals Incorporated ("Ligand") has moved to dismiss this action for lack of personal jurisdiction and improper venue. Alternatively, it seeks to transfer the action to the Southern District of California, pursuant to 28 U.S.C. § 1404(a). For the reasons set forth below, this court concludes that there is general jurisdiction over Ligand, venue is proper and the section 1404(a) factors do not favor transfer to another district. The motion is denied.

Background

The action was commenced in Supreme Court New York County by The Rockefeller University (the "University") and timely removed to this Court by Ligand invoking diversity jurisdiction. 28 U.S.C. §§ 1332, 1441(b).¹ The University alleges that in 1992 it licensed to Ligand certain technology, know-how and inventions relating to the tools to screen therapeutic drugs. It further alleges that Ligand granted a sublicense to a predecessor-in-interest to SmithKline Beecham ("SKB") and that Ligand has received milestone payments from SKB. The University alleges that Ligand breached the 1992 licensing agreement by failing to pay to the University its contractual share of the milestone payments.

The licensing agreement between the University and Ligand and made as of September 30, 1992 (the "Agreement"), recites that Ligand is a Delaware corporation with its principal place of business in San Diego, California, and that the University is a non-profit educational corporation organized under the laws of the state of New York with an office in Manhattan. The Agreement refers to the "valuable technology and know-how relating to peptidyl hormone mediated gene expression" developed by "Dr. James Darnell and his colleagues at Rockefeller and at NYU." The licensed territory is defined as the "entire world." The agreement contains a New York choice of law provision.

In June 1992, Ligand's representatives were invited to New York to meet with representatives of the University in connection with the negotiation of what eventually became the licensing agreement. (Letter of Giesar, June 17, 1992.) Following execution of the agreement, Dr. Darnell wrote to Ligand's Director of Research thanking him for his visit to the University. (Letter of Darnell, Dec. 22, 1992.) A January 25, 1993 meeting was scheduled between Dr. Darnell and Dr. John Rosen of Ligand and Darnell's administrative secretary arranged for housing accommodations for Rosen at a University facility. (Letter of Cousseau, Jan. 20, 1993.)

Ligand argues that there is no general or specific jurisdiction over it. It asserts that those Ligand employees who performed work pursuant to the agreement with SKB's predecessor did so in California and not in New York. (Decl. of Marschke, Mar. 20, 2008.) It states that, at the time of suit, it was not present in New York on a systematic or continuous basis. It neither owns nor leases real estate in New York; it maintains no telephone listing and has no employees in New York. (Decl. of Warfield-Graham, Mar. 19, 2008.) It concedes that it is authorized to do business in this state, but disputes whether such authorization is, alone, a sufficient basis for jurisdiction. Ligand sold the product AVINZA in New York from about 1998 to about 2007, but asserts that it no longer sells the product and that the product has nothing to do with the subject matter of this lawsuit. (Id.)

Discussion

A. Personal Jurisdiction

On a defendant's motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction. See In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir.2003) (per curiam). "[T]he nature of the plaintiff's obligation varies depending on the procedural posture of the litigation." Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.1990). Prior to discovery, a plaintiff may defeat a Rule 12(b)(2) motion by "pleading in good faith legally sufficient allegations of jurisdiction." Id. (citation omitted). Plaintiff must make a "prima facie showing" of personal jurisdiction. Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir.1998) (quotation omitted).

Personal jurisdiction may be exercised over any defendant "who could be subjected to the jurisdiction of a court of general jurisdiction in the state where the district court is located." Rule 4(k)(1)(A), Fed.R.Civ.P. If plaintiff is able to establish a factual predicate for jurisdiction under the laws of the forum state—here, New York—then the court must consider whether the exercise of jurisdiction violates due process. Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 94 (2d Cir. 2000).

Under New York's general jurisdiction statute, N.Y. CPLR § 301, "a foreign corporation is subject to general personal jurisdiction in New York if it is `doing business' in the state." Wiwa, 226 F.3d at 95. "`[A] corporation is "doing business" and is therefore "present" in New York and subject to personal jurisdiction, with respect to any cause of action, related or unrelated to the New York contacts, if it does business in New York, "not occasionally or casually, but with a fair measure of permanence and continuity."'" Id. (quoting Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267, 115 N.E. 915 (1917)) (alteration in Wiwa). The corporation must be engaged in "a continuous and systematic course of `doing business' here...." Frummer v. Hilton Hotels Int'l, Inc., 19 N.Y.2d 533, 536, 281 N.Y.S.2d 41, 227 N.E.2d 851 (1967). There is no precise test for "doing business" in the state, and courts must look to "the aggregate of the corporation's activities in the State...." Laufer v. Ostrow, 55 N.Y.2d 305, 310, 449 N.Y.S.2d 456, 434 N.E.2d 692 (1982). There are, however, several traditional factors that courts consider when undertaking this analysis, and they are "whether the company has an office in the state, whether it has any bank accounts or other property in the state, whether it has a phone listing in the state, whether it does public relations work there, and whether it has individuals permanently located in the state to promote its interests." Wiwa, 226 F.3d at 98.

Here, plaintiff's claim of general personal jurisdiction over defendant rests on a theory of consent. Ligand has had on file with the Secretary of State of New York, from 1998 up to and including the date the summons was served, a proper authorization to do business. Under N.Y. Business Corporation Law § 1301(a), a foreign corporation may not "do business" in the state until it has been authorized to do so in accordance with the statute. Certain activities may be conducted in New York, e.g., shareholder meetings or maintenance of bank accounts, without such authority. Id. § 1301(b). An application for authority to do business is filed with the Department of State. Id. § 1304. The filing must state "[t]he county within the state in which its office is to be located." Id. § 1304(5). In this case, Ligand's current filing with the New York Department of State states: "County: New York." The application for authorization requires the designation of the Secretary of State as its agent upon whom service may be served and also designation of an address "within or without this state" to which process received by the Secretary of State is to be mailed. Id. § 1304(6). Ligand has supplied the address of CT Corporation System at 111 Eighth Avenue, New York, New York as the address where process ought to be mailed. In addition, the application permits, but does not require, the designation of a "registered agent ... upon whom process against [the corporation] may be served." Id. § 1304(7). Ligand has elected to avail itself of this provision and has listed CT Corporation System at its New York County address as its "Registered Agent."

Upon the filing by the Department of State of the application, the foreign corporation becomes authorized to do business and "[s]uch authority shall continue so long as it retains its authority to do such business in the jurisdiction of its incorporation and its authority to do business in this state has not been surrendered, suspended or annulled in accordance with law." Id. § 1305. Ligand has the power to "revoke or change the designation of a registered agent." Id. § 1309-A(3). It also may surrender its authority to do business. Id. § 1310. There is no claim that Ligand has done either.

As support for the proposition that authorization to do business is not the equivalent of consent to personal jurisdiction, Ligand relies upon dictum in Beja v. Jahangiri, 453 F.2d 959, 962 (2d Cir.1972), and a district court decision following Beja and concluding that there was no personal jurisdiction over a defendant authorized to do business in New York, Bellepointe v. Kohl's Dep't Stores, Inc., 975 F.Supp. 562 (S.D.N.Y.1997). Beja observed that "[a]lthough the mere authorization to do business, even though granted at a corporation's request, may not be conclusive on the issue of jurisdiction under NYCPLR § 301, ... it is certainly very strong evidence that the corporation is subject to in personam jurisdiction, ..." 453 F.2d at 962 (citations omitted).²

With the exception of Bellepointe and one other district court case, Wright v. Maersk Line, Ltd., No. 99 Civ. 11282(LMM), 2000 WL 744370, at *1 (S.D.N.Y. June 9, 2000), cases since Beja have found...