United States: One Step Back: Mixed Personal Jurisdiction Result In Actos Case In EDPa.

Last Updated: July 25 2019
Article by Rachel B. Weil

Allow us to wax nostalgic for a moment. Decades ago, an improbable series of events led us to Nashville, where we lived for several years, blissfully holding adulthood (and college) at bay and basking in all that the resident music industry provided. Last week, we had a perfectly joyous reunion with the dearest of friends from that era, complete with plenty of music. Every now and then, in this very complex time, something falls squarely in the category of "good."

Today's case is not such a "something;" rather, it is a mixed bag of a personal jurisdiction decision in an Actos case out of the Eastern District of Pennsylvania. In Williams v. Takeda Pharms., 2019 U.S. Dist. LEXIS 107093 (E.D. Pa. June 26, 2019), the plaintiff alleged that he developed bladder cancer after taking Actos for more than a year to treat his type 2 diabetes. He sued three corporations affiliated with the manufacturer's parent corporation, asserting the usual litany of product liability claims. The defendants moved to dismiss for lack of personal jurisdiction.

The court set the stage by explaining the difference between general and specific jurisdiction, as explained by SCOTUS in BMS. Citing the "consent" provision in Pennsylvania's jurisdiction statute, 42. Pa. Cons. Stat. Ann. § 5301(a)(2)ii), the plaintiffs argued that two of the defendant corporations had consented to general jurisdiction by registering to do business in Pennsylvania and maintaining a registered agent in Philadelphia. The plaintiffs relied on a pre-Bauman Third Circuit decision, Bane v. Netlink, 925 F.3d 637 (3d. Cir. 1991), holding that registration by a foreign corporation constituted consent to be sued in Pennsylvania's courts. The defendants countered that, after Bauman, asserting jurisdiction based only on a foreign corporation's registration would violate the Due Process Clause of the Fourteenth Amendment.

The court disagreed. Noting that the Third Circuit had not changed its view since Bane, the court held that Bauman and BMS did not change the landscape because, through those cases "narrowed the scope of jurisdiction ..., neither case addressed consent." Williams, 2019 U.S. Dist. LEXIS 107093 at *7. In the absence of "any further analysis from the Supreme Court or the Third Circuit," the court held that "a foreign corporation's registration to do business in Pennsylvania establishes consent to jurisdiction," and it denied the motion with respect to the two registered corporations.  This is an extremely controversial position.  As we've blogged about before, while most Pennsylvania courts have taken the same position as Williams, there is a strong argument that Bane is inconsistent with Bauman, and this issue is on appeal (or soon will be) in both federal courts.

The third corporate defendant is not registered do business in Pennsylvania. The plaintiff asserted that the corporation transacts business and derives revenue in Pennsylvania and is "in the business of researching, designing, formulating, compounding, testing, manufacturing, producing, processing, assembling, inspecting, distributing, marketing, labeling, promoting, packaging and/or advertising" the drug in Pennsylvania, id. at *8, and that these activities are sufficient to confer specific jurisdiction.

The court explained that, to the contrary, specific jurisdiction under BMS "requires an affiliation between the forum and the underlying controversy, principally, an activity or occurrence that takes place in the forum state," id. at *9 (internal punctuation and citation to BMS omitted), and that the "defendant's unconnected activities in the State" cannot substitute for such affiliation.   Id. In BMS, the court granted the defendant's motion to dismiss, holding that the court did not have specific jurisdiction over the nonresident defendant corporation where the plaintiff was not prescribed the defendant's medication in the forum state and did not ingest the medication or suffer his alleged injuries in the forum state.   Here, the plaintiff similarly was not prescribed Actos in Pennsylvania, did not ingest it in Pennsylvania, and did not suffer his alleged injuries in Pennsylvania.   Though he tried to argue that he "experience[ed] his condition at work in Pennsylvania and during treatment in Pennsylvania," the court granted the motion to dismiss this defendant, holding that "the relevant conduct giving rise to [the plaintiff's] claims occurred elsewhere." Id. (internal punctuation and citation to BMS omitted).

So a truly mixed result. The court was nicely restrictive in its analysis of the forum-related activities of the unregistered defendant, but its reliance on pre-Bauman law to exercise jurisdiction over the other two defendants has the potential to open floodgates to litigation tourists whom Bauman and BMS would turn away.   We hope the Third Circuit rectifies this at some point. We'll keep you posted.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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