Judge Sleet denies motion to dismiss for lack of personal jurisdiction in ANDA litigation

In a recent opinion, Judge Gregory M. Sleet denied defendant Mylan Pharmaceutical, Inc.’s (“Mylan”) motion to dismiss plaintiff AstraZeneca AB’s (“AstraZeneca”) ANDA action for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2).  AstraZeneca AB v. Mylan Pharmaceuticals, Inc., C.A. No. 14-696-GMS (D. Del. Nov. 5, 2014).  AstraZeneca alleged that the Court maintained jurisdiction over Mylan because (i) Mylan “consented to jurisdiction in Delaware”; (ii) Mylan is “subject to specific jurisdiction in Delaware”; and (iii) Mylan is “subject to general jurisdiction in Delaware.” Id. at 5. Judge Sleet concluded that the Court maintained jurisdiction over Mylan only on the grounds that Mylan is subject to specific jurisdiction in Delaware.

First, Judge Sleet determined that AstraZeneca failed to demonstrate that Mylan “is properly subject to general jurisdiction in Delaware.”  Rejecting jurisdiction on this ground, Judge Sleet explained that “AstraZeneca notes only that Mylan is registered to do business in Delaware and has a broad network of third-party contacts within the state,” and that “[u]pholding jurisdiction on these allegations alone would permit the ‘exercise of general jurisdiction in every [s]tate.’” Id. at 7. Judge Sleet also noted that “Mylan’s litigation history in Delaware fail[ed] to rise to [a] level” that would subject Mylan to general jurisdiction.  Id. at 8.

Next, Judge Sleet rejected AstraZeneca’s argument that Mylan “consented to be subject to Delaware’s general jurisdiction by registering to do business in the state and by appointing a registered agent to accept service of process.” Id. at 8.  First acknowledging there “is a circuit split as to whether this type of ‘statutory consent’ is an adequate basis on which to ground a finding of personal jurisdiction,” Judge Sleet ultimately concluded that “Mylan’s compliance with Delaware’s registration statutes-mandatory for doing business within the state-cannot constitute consent to jurisdiction.” Id. at 9-11. In reaching this determination, Judge Sleet relied on the Supreme Court’s decision in Daimler AG v. Bauman, 134 S. Ct. 746, 761 (2014), which held that “‘continuous and systematic contacts’ alone are insufficient to establish general jurisdiction,”  and thus rejected “the idea that a company could be haled into court merely for ‘doing business’ in a state.” Id. at 11. Judge Sleet additionally noted that “[f]inding mere compliance with such statutes sufficient to satisfy jurisdiction would expose companies with a national presence (such as Mylan) to suit all over the country, a result specifically at odds with Daimler.” Id.

Judge Sleet did find, however, that AstraZeneca demonstrated that Mylan is subject to specific jurisdiction in Delaware.  Judge Sleet first noted that “specific jurisdiction has historically been disfavored by courts as a basis to exercise jurisdiction over generic drug company defendants in ANDA cases.” Id. at 12.  Judge Sleet explained that “ANDA litigation is unlike other patent infringement litigation: The injury is abstract, making it difficult to point to a location out of which the injury ‘arises’ for jurisdictional purposes.” Id. at 14.  Nevertheless, Judge Sleet ultimately concluded that Mylan was subject to personal jurisdiction in Delaware, reasoning that “Mylan’s contact with Delaware is not illusory . . . . Mylan sent its paragraph IV certification to AstraZeneca U.S. in Delaware, thus triggering the forty-five-day countdown for AstraZeneca to file a lawsuit-a ‘real act with actual consequences.’” Id. at 15. Judge Sleet also found that “Mylan cannot plausibly argue that it could not ‘reasonably anticipate being haled into court’ in Delaware when patent litigation is an integral part of a generic drug company’s business.” Id.

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