On Friday March 18, the Federal Circuit issued an opinion in a pair of appeals involving the contours of personal jurisdiction in Hatch-Waxman litigation— Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., No. 15-1456, and AstraZeneca AB v. Mylan Pharmaceuticals Inc., No. 15-1460. In an opinion authored by Judge Taranto and joined by Judge Newman, the court held that Mylan had minimum contacts sufficient for specific personal jurisdiction in Delaware. Judge O'Malley wrote a separate concurring opinion. We previously reported on the oral arguments for these cases here. The majority's holding may have far-ranging impacts on the forums where branded pharmaceutical companies may commence consolidated litigation under the Hatch-Waxman Act.
Majority Opinion
The majority found that the jurisdictional issues for these
cases turned on whether personal jurisdiction over Mylan satisfied
constitutional due process standards. According to
International Shoe Co. v. Washington, 326 U.S. 310 (1945),
a court may exercise personal jurisdiction without violating the
Due Process Clause when the defendant "has certain minimum
contacts with the forum such that the maintenance of the suit does
not offend 'traditional notions of fair play and substantial
justice.'" Id. at 316 (citation omitted). The
minimum contacts requirement focuses on whether the defendant's
suit-related conduct creates a substantial connection with the
forum state. The court held that minimum contacts standard was
satisfied by Mylan filing an ANDA with the intent to market drugs
in both actions in Delaware upon approval: "Mylan's ANDA
filings constitute formal acts that reliably indicated plans to
engage in marketing of the proposed generic drugs." The
majority also noted, "Mylan's ANDA filings, including its
certifications regarding the patents at issue here, are thus
suit-related, and they have a substantial connection with Delaware
because they reliably, non-speculatively predict Delaware
activities by Mylan."
The majority dispatched the notion that finding specific personal
jurisdiction might be unreasonable, noting that the litigation
"burden on Mylan will be at most modest," which "has
litigated many suits in Delaware, including some that it
initiated." The Court also distinguished Zeneca Ltd. v.
Mylan Pharmaceuticals, Inc., 173 F.3d 829 (Fed. Cir. 1999),
which it found did not address whether the location of an ANDA
filer's future sales could support specific personal
jurisdiction in the Hatch-Waxman litigation.
Also noteworthy are the issues left undecided by the majority.
Specifically, the court declined to address the issue of general
personal jurisdiction, including the impact of Mylan's
registration to do business in Delaware on general jurisdiction. In
addition, the majority did not rely on the site where Mylan's
notice letter was received as a factor in its analysis, although
that had been a primary factor in one of the underlying district
court decisions.
Judge O'Malley's Concurrence
Judge O'Malley concurred with the majority that the Delaware
district courts possessed personal jurisdiction over Mylan but
under a different legal theory. Judge O'Malley advocated that
the court should have begun its inquiry by analyzing general
personal jurisdiction, which, in her view, existed over Mylan by
virtue of its registration to do business in Delaware and
appointment of an agent for service. Under the Delaware Supreme
Court's holding in Sternberg v. O'Neil, 550 A.2d
1105 (Del. 1988) compliance with Delaware's registration
statute constitutes consent to general personal jurisdiction. Based
on Mylan's registration, Judge O'Malley reasoned
"that Mylan is subject to general personal jurisdiction in
Delaware by virtue of its voluntary, express consent to such
jurisdiction."
With respect to specific personal jurisdiction, Judge O'Malley
would not have relied on Mylan's expressions of future intent
as the majority did. Instead, Judge O'Malley reasoned
that Mylan's conduct connected it to Delaware in a
"meaningful way" as required for specific personal
jurisdiction under Calder v. Jones, 465 U.S. 783 (1984).
She reasoned that the "nature of ANDA litigation is such that,
as in Calder, 'the focal point both of the [filing of
the ANDA] and of the harm suffered' is Delaware. . . .
Jurisdiction over Mylan is proper in Delaware based on the
'effects' of the conduct it aimed at Delaware." Judge
O'Malley concluded, "Mylan's paragraph IV
certification in its ANDA filing connects it to Delaware—not
just to these corporate residents—in a manner that supports a
finding of specific personal jurisdiction in that forum."
Potential Impact
Absent Supreme Court review, the Federal Circuit's decision in Acorda substantially resolves the uncertainty over personal jurisdiction in ANDA litigation that resulted from the Supreme Court's holding in Daimler AG v. Bauman, 134 S. Ct. 746 (2014) that general personal jurisdiction over corporations exists only where the corporation is at "home." Although the Acorda majority declined to address general personal jurisdiction, the decision may effectively obviate the need to address general personal jurisdiction in most ANDA cases. Specifically, under Acorda, branded companies will have a strong argument that specific personal jurisdiction may exist over an ANDA filer in any state where the ANDA filer intends to market the generic drug at issue.
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