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Perrigo Co. v. Merial Ltd.

United States District Court, D. Nebraska

April 7, 2015

PERRIGO COMPANY, et al., Plaintiffs,
v.
MERIAL LIMITED, doing business as MERIAL LLC, and MERIAL SAS, Defendants.

MEMORANDUM AND ORDER

JOHN M. GERRARD, District Judge.

This matter is before the Court on the Defendants' Motion to Dismiss or, in the Alternative, to Transfer Plaintiffs' Amended Complaint (filing 24). The defendants move to dismiss the plaintiffs' complaint for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2), or in the alternative to transfer the case to the Northern District of Georgia, pursuant to 28 U.S.C. § 1404. The Court will grant the defendants' motion to dismiss, in part, and deny it in part, and defer ruling on the defendants' alternative request to transfer the case to Georgia.

BACKGROUND

The defendants in this case are Merial Limited d/b/a Merial LLC and Merial SAS (collectively, Merial). Merial Limited is a company limited by shares registered in England and Wales. Filing 26-9 at 2; see generally Companies Act, 2006, c. 46, § 3 (U.K.). Merial Limited is domesticated in the State of Delaware as Merial LLC. Filing 26-9 at 2; see generally Del. Code Ann. Tit. 6, § 18-212. Merial LLC has a registered agent in Nebraska for service of process. Filing 56-10 at 1-3. Merial SAS is a French societe par actions simplifiee. Filing 26-9 at 3.

Merial makes and sells flea and tick protection for household pets. Among other things, Merial makes "Frontline" products which are covered in part by a U.S. Patent that Merial holds (the '329 Patent). Filing 23 at 3. The plaintiffs, Perrigo Company, Sergeant's Pet Care Products, Velcera, and Fidopharm (collectively, Perrigo), are also in the business of flea and tick protection for household pets, and Merial and Velcera were involved in extensive litigation including disputes over the '329 Patent and what Merial said were Velcera's attempts to infringe it. Filing 23 at 4. But in August 2012, they settled their disputes with the Settlement Agreement that is the basis of the current lawsuit. Filing 23 at 4-5. Velcera was acquired by Perrigo after the settlement was reached, and Perrigo assumed Velcera's rights and obligations under the agreement. Filing 23 at 5-6.

The Settlement Agreement permitted Perrigo to enter the over-thecounter market with its products no later than November 30, 2014. Filing 23 at 4. The '329 Patent will expire on August 5, 2016, and permitting Perrigo to enter the market before then would provide Perrigo with a head start over other competitors in the over-the-counter market. See filing 23 at 3, 5. Perrigo could also have entered the market earlier, if Merial notified Perrigo that it had granted another competitor a license to the '329 Patent-which Merial was, pursuant to the Settlement Agreement, only permitted to do in order to settle litigation that threatened the validity of the '329 Patent. Filing 23 at 4. Merial was required to provide Perrigo with notice if Merial offered to grant, or actually granted, a license to enter or remain in the over-thecounter market. Filing 23 at 4, 8. But absent those conditions-or the actual invalidity of the '329 Patent-Merial was expected to enforce the '329 Patent against other companies, and Perrigo was expected to pay Merial for the privilege. Filing 23 at 4-5, 12.

In March 2014, Perrigo became aware of settlement discussions in a Georgia lawsuit between Merial, Horizon Valley Generics, Inc., and Ceva Sante Animale, S.A., that involved the '329 Patent. Filing 23 at 6-7. Perrigo contacted Merial, but Merial did not provide notice, pursuant to the Settlement Agreement, of settling any other litigation. Filing 23 at 6. The Georgia litigation was dismissed in April. Filing 23 at 7. Nonetheless, Perrigo continued to hear of the impending launch of a competing product. Filing 23 at 8-10. And eventually, Merial did notify Perrigo that a third-party license had been offered and granted. Filing 23 at 10-11. Perrigo sued Merial for alleged breach of the Settlement Agreement. Filing 23. Merial filed a motion to dismiss asserting a lack of personal jurisdiction. Filing 24.

STANDARD OF REVIEW

When jurisdiction is challenged on a pretrial motion to dismiss, the nonmoving party need only make a prima facie showing of jurisdiction. Pangaea, Inc. v. Flying Burrito LLC, 647 F.3d 741, 745 (8th Cir. 2011). The evidence is viewed in the light most favorable to the plaintiff. Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., 646 F.3d 589, 592 (8th Cir. 2011). Nonetheless, if the defendant controverts or denies jurisdiction, the plaintiff still carries the burden of proof. See, Dairy Farmers of Am., Inc. v. Bassett & Walker Int'l, Inc., 702 F.3d 472, 475 (8th Cir. 2012); Viasystems, 646 F.3d at 592; Wells Dairy, Inc. v. Food Movers Int'l, Inc., 607 F.3d 515, 518 (8th Cir. 2010); Miller v. Nippon Carbon Co., 528 F.3d 1087, 1090 (8th Cir. 2008). The plaintiff's prima facie showing must be tested, not by the pleadings alone, but by the affidavits and exhibits presented with the motions and opposition thereto. Dairy Farmers, 702 F.3d at 475; Miller, 528 F.3d at 1090; Coen v. Coen, 509 F.3d 900, 904-05 (8th Cir. 2007).

DISCUSSION

Merial argues that the Court lacks personal jurisdiction because it lacks the "contacts, ties, or relations" with Nebraska necessary to satisfy due process. See Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945). In order to satisfy due process, a defendant must have minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Pangaea, 647 F.3d at 745; see also Dairy Farmers, 702 F.3d at 477. The fundamental inquiry is whether the defendant has purposefully availed itself of the benefits and protections of the forum state to such a degree that it should reasonably anticipate being haled into court there. Viasystems, 646 F.3d at 594; see also Dairy Farmers, 702 F.3d at 477. Purposeful availment is required to ensure that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, or the unilateral activity of another party or a third person. Stanton v. St. Jude Med., Inc., 340 F.3d 690, 693-94 (8th Cir. 2003). Jurisdiction is proper, however, where the contacts proximately result from actions by the defendant itself that create a substantial connection with the forum state. Id. at 694.

The minimum contacts necessary for due process may be the basis for either "general" or "specific" jurisdiction. Dairy Farmers, 702 F.3d at 475; Johnson v. Arden, 614 F.3d 785, 794 (8th Cir. 2010). A court obtains general jurisdiction against a defendant who has "continuous and systematic" contacts with the forum state, even if the injuries at issue in the lawsuit did not arise out of the defendant's activities directed at the forum. Id. Specific jurisdiction over a defendant, on the other hand, is exercised when a state asserts personal jurisdiction over a nonresident defendant that has purposefully availed itself of the privilege of conducting business in the forum in a suit arising out of or related to the defendant's contacts with the forum. See, Pangaea, 647 F.3d at 745-46; Johnson, 614 F.3d at 794-95. It is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. Dairy Farmers, 702 F.3d at 477; see also Hanson v. Denckla, 357 U.S. 235, 253 (1958).

Merial contends that specific jurisdiction does not exist because the events giving rise to this litigation arose out of contacts with Georgia, not Nebraska. Filing 33 at 8-10. Perrigo, on the other hand, contends that this litigation arises out of an agreement that required Merial to direct its performance at the plaintiffs in Nebraska. Filing 59 at 17. Merial also contends that general personal jurisdiction does not exist because none of the Merial entities is either incorporated in or has its principal place of business in Nebraska, and they have minimal contacts with the state. Filing 33 at 6-8. Perrigo contends, to the contrary, that Merial's products are manufactured by Perrigo in Nebraska, that Merial has contracted with other Nebraska businesses, and that Merial has sued in Nebraska courts. Filing 59 at 19-20. And Perrigo contends that Merial has consented to jurisdiction in Nebraska. The Court will address each contention in turn.

SPECIFIC JURISDICTION

As just noted, specific jurisdiction over a defendant is exercised when a state asserts personal jurisdiction over a nonresident defendant that has purposefully availed itself of the privilege of conducting business in the forum in a suit arising out of or related to the defendant's contacts with the forum. See, Pangaea, 647 F.3d at 745-46; Johnson, 614 F.3d at 794-95. In a contract case, the Court is to evaluate prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing to determine whether the defendant purposefully established minimum contacts within the forum. Dairy Farmers, 702 F.3d at 477; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 479 (1985). And the Eighth Circuit has set forth a five-part test for measuring a defendant's contacts with a forum state: (1) the nature and quality of the contacts with the forum state, (2) the quantity of those contacts, (3) the relation of the cause of action to the contacts, (4) the interest of the forum state in providing a forum for its residents, and (5) the convenience of the parties. Dairy Farmers, 702 F.3d at 477; Wells Dairy, 607 F.3d at 518. The third factor distinguishes whether the jurisdiction is general or specific. Johnson, 614 F.3d at 794. The first three factors are primary factors, and the remaining two are secondary. Id. And a court is to look at all the factors in the aggregate and examine the totality of the circumstances in determining personal jurisdiction. Id .; see Dairy Farmers, 702 F.3d at 477.

Perrigo's argument for specific jurisdiction is primarily based on Merial's communications directed at Perrigo in Nebraska regarding performance of the Settlement Agreement. Perrigo and Merial sent correspondence back and forth regarding various aspects of the Settlement Agreement. Filing 20-2 at 4-14. And Perrigo performed its obligations ...


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