Earlier this year we posted about the decision on defendant's motion to dismiss in Crockett v. Luitpold Pharmaceuticals, Inc., 2020 WL 433367 (E.D. Pa. Jan. 28, 2020). We called it a "patchwork" decision, meaning we generally liked it but it wasn't a seamless defense victory. Well, the court ruled on another defense motion just this month and this one we can say we like completely.
In case you've forgotten, or been thinking of something else for the last four months, the case involves an injectable medication used to treat iron deficiency anemia in people who are intolerant to oral medications. This drug was first developed in Europe before being approved by the FDA in 2013. In the United States, the drug is manufactured and marketed by two companies. The complaint, however, also names as defendants the European companies who manufacture and sell the equivalent generic product there. Crockett v. Luitpold Pharmaceuticals, Inc., 2020 U.S. Dist. LEXIS 102216, at *2 (E.D. Pa. Jun. 11, 2020). One of those companies, headquartered in Switzerland, moved to dismiss based on lack of personal jurisdiction.
Plaintiffs waived any argument that the court had general jurisdiction over defendant by failing to respond to defendant's argument on that point. Id. at *6. That left only the question of specific jurisdiction which requires that the defendant have "personally directed [its] activities at the forum" and "the litigation must arise out of or relate to at least one of those activities." Id.
Plaintiff's first argument regarding purposeful availment was that defendant designed a product that caused injury to someone in Pennsylvania. But, the court was quick to note that the Third Circuit has already shot down stream of commerce as a basis for exercising personal jurisdiction over a foreign defendant. Id. at *6-7.
Plaintiff's second argument was that one of the European companies, not the one who moved to dismiss, had a licensing agreement with one of the US manufacturers to allow it to sell the generic version of the drug in the US. This the court found "far too attenuated." Id. at *7. Not only was the agreement with a different entity, but the licensing agreement covered rights to sell the drug in the United States, not in Pennsylvania specifically. The agreement did not support an "intent to distribute in Pennsylvania" and awareness alone that a product "may end up in Pennsylvania" is not enough to confer personal jurisdiction. Id. at *8.
Plaintiff next tried to argue that the Swiss company's "coordination" with the US companies provide sufficient activity to establish jurisdiction. But, as the Supreme Court has already determined that a relationship with a third party alone is an insufficient basis for jurisdiction, plaintiff had to demonstrate "something more." Id. at *8-9. Here, plaintiff argued that "something more" was the foreign defendant's participation in things like clinical trials, adverse event reporting, and marketing. Id. at *9. On these "cooperative" activities, defendant put in evidence via affidavit that refuted it had any "direct engagement" in any US-based activities. The "cooperation of a party who does no business in Pennsylvania with a third party engaged in business in Pennsylvania" does not provide "a basis for the exercise of specific jurisdiction over the first party." Id. Plaintiff conceded she was not making an alter ego or piercing the corporate veil argument, and therefore had no grounds on which to impute the US defendant companies' contacts to the foreign defendants. Id. at *10.
To sum things up, plaintiff failed to meet her burden of proof to establish specific jurisdiction. At best, plaintiff could show that the foreign defendant possibly directed some activity to the United States as a whole, but not that any actions were directed at any particular state, including Pennsylvania. With that, the court denied plaintiff's request for jurisdictional discovery and dismissed the claims against the Swiss defendant with prejudice.
Originally published June 16, 2020
This article is presented for informational purposes only and is not intended to constitute legal advice.
