The World in U.S. Courts: Winter 2018 - Personal Jurisdiction/Forum Non Conveniens
Several states sued multiple defendants, including British company Reckitt Benckiser Healthcare Ltd. (RBH), in multi-district litigation involving Suboxone, a medication used to treat opioid addiction. The plaintiffs alleged a “product hopping” scheme in which the defendants attempted to escape competition by moving consumers from Suboxone tablets to Suboxone film, in violation of antitrust, unfair trade, and consumer protection laws. RBH never sold Suboxone film within the US and moved to dismiss all claims for lack of personal jurisdiction. The Court found that it had jurisdiction over RBH, but ultimately granted RBH’s motion to dismiss after finding that plaintiffs failed to plead a plausible antitrust claim.
The Court only addressed the question whether specific personal jurisdiction could be asserted over RBH, and explained that the test had three elements. First, a plaintiff must show that a defendant has “minimum contacts” with the forum, meaning that it “purposefully directed” its activities towards the residents of the forum State, or otherwise “purposefully availed” itself of the privilege of conducting activities there. Second, the plaintiff’s claim must “arise out of or relate to” those contacts. Finally, if the first two requirements are satisfied, jurisdiction attaches unless a defendant meets the heavy burden of showing that proceeding would be inconsistent with traditional notions of “fair play and substantial justice.”
The Court considered the allegations of the complaint as well as additional facts contained in exhibits attached to the plaintiffs’ opposition to the motion to dismiss. It concluded that these facts were sufficient to show that RBH purposefully availed itself of the privilege of doing business in the US. Most notably, the Court observed that, even though RBH did not sell Suboxone film within the US, RBH (i) worked in conjunction with two American companies to have Suboxone film placed into a national distribution network, (ii) worked on prosecuting US patents and securing trademarks related to Suboxone film, and (iii) scheduled meetings with the US Food and Drug Administration FDA and prepared regulatory filings to secure US approval of the product.
Because RBH did not raise any facts establishing that a finding a personal jurisdiction would violate principles of fair play and substantial justice, the Court found that satisfying the first two prongs of the test was sufficient to assert personal jurisdiction over RBH.