Knoles v. Teva Pharmaceuticals USA, Inc. et al, No. 5:2017cv06580 - Document 81 (N.D. Cal. 2019)
Court Description: ORDER GRANTING 73 TEVA DEFENDANTS' MOTION TO DISMISS THE SECOND AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION; TERMINATING AS MOOT 72 TEVA DEFENDANTS' MOTION TO STRIKE THE SECOND AMENDED COMPLAINT; AND DIRECTING PLAINTIFF TO SHOW CAUSE WHY THE SECOND AMENDED COMPLAINT SHOULD NOT BE DISMISSED AS TO REMAINING DEFENDANTS. Show Cause Response due by 10/31/2019.Signed by Judge Beth Labson Freeman on 10/17/2019. (blflc1S, COURT STAFF) (Filed on 10/17/2019)
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1 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA 4 SAN JOSE DIVISION 5 6 MARLESSA KNOLES, Plaintiff, 7 8 9 10 United States District Court Northern District of California 11 12 v. TEVA PHARMACEUTICALS USA, INC.; TEVA BRANDED PHARMACEUTICALS PRODUCTS R&D, INC.; FEI WOMEN’S HEALTH LLC; ORTHO-MCNEIL PHARMACEUTICAL, LLC; and DURAMED PHARMACEUTICALS, Defendants. 13 14 Case No. 17-cv-06580-BLF ORDER GRANTING TEVA DEFENDANTS’ MOTION TO DISMISS THE SECOND AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION; TERMINATING AS MOOT TEVA DEFENDANTS’ MOTION TO STRIKE THE SECOND AMENDED COMPLAINT; AND DIRECTING PLAINTIFF TO SHOW CAUSE WHY THE SECOND AMENDED COMPLAINT SHOULD NOT BE DISMISSED AS TO REMAINING DEFENDANTS [Re: ECF 72, 73] 15 16 17 Plaintiff Marlessa Knoles sues a number of entities for injuries she suffered due to 18 implantation and removal of a Paragard Intrauterine Device (“IUD”). Defendants Teva 19 Pharmaceuticals USA, Inc. (“Teva USA”) and Teva Branded Pharmaceuticals Products R&D, Inc. 20 (“Teva Branded”) have filed a motion to dismiss the operative second amended complaint 21 (“SAC”) for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), and a 22 motion to strike the SAC for failure to comply with a Court order. 23 Following completion of briefing on the motions, the Court vacated the scheduled hearing 24 dates of October 24, 2019 and October 31, 2019 and advised the parties that the motions would be 25 submitted for decision without oral argument. See Order Vacating Motion Hearings, ECF 80. For 26 the reasons discussed below, the motion to dismiss is GRANTED WITHOUT LEAVE TO 27 AMEND; the motion to strike is TERMINATED AS MOOT; and the Court sua sponte orders 28 Plaintiff to SHOW CAUSE why the SAC should not be dismissed as to the remaining Defendants. 1 2 BACKGROUND Plaintiff filed this action in November 2017, asserting state law products liability and 3 negligence claims against Teva USA and Teva Branded based on allegations that they designed, 4 manufactured, marketed, and/or sold the Paragard IUD. See Compl., ECF 2. The Teva 5 Defendants moved for judgment on the pleadings, arguing that they had no involvement with the 6 Paragard IUD and that they are not subject personal jurisdiction in California. See Motion for 7 JOP, ECF 52. The Court granted the motion for judgment on the pleadings with leave to amend. 8 See Order Granting Motion for JOP, ECF 62. Leave to amend was expressly limited to the claims 9 asserted against the Teva Defendants, and Plaintiff was directed not to add new claims or parties 10 11 United States District Court Northern District of California I. without prior leave of the Court. See id. Prior to amending her claims against the Teva Defendants, Plaintiff filed a motion to 12 substitute a true name, “Paragard,” for a fictitiously named defendant. See Motion to Substitute, 13 ECF 66. With the motion, Plaintiff submitted a proposed second amended complaint asserting 14 claims against new party “Paragard IUD.” See Proposed Second Amended Complaint, ECF 66-1. 15 The Court granted the motion to substitute, noting the discrepancy between Plaintiff’s 16 identification of the new party as “Paragard” in the motion but “Paragard IUD” in the proposed 17 second amended complaint, and cautioning Plaintiff to ensure that the correct name of the entity 18 was used in the amended pleading. See Order Granting Motion to Substitute at 4, ECF 70. The 19 Court ordered that “[t]he amended complaint shall add the appropriate Paragard entity as a 20 defendant and shall cure the deficiencies identified in the Court’s prior Order Granting Motion for 21 JOP,” and that “Plaintiff may not add any other new parties or claims without express leave of the 22 Court.” Id. 23 On May 17, 2019, Plaintiff filed the operative second amended complaint (“SAC”). See 24 SAC, ECF 71. The SAC Plaintiff filed is substantially different from the proposed second 25 amended she submitted with her motion to substitute. Compare ECF 66-1 with ECF 71. Notably, 26 the SAC does not add “the appropriate Paragard entity” as authorized by the Court, but instead it 27 adds three different defendant entities: FEI Women’s Health LLC, Ortho-McNeil Pharmaceutical, 28 LLC, and Duramed Pharmaceuticals. See SAC, ECF 71. 2 The SAC alleges that Plaintiff had a Paragard IUD inserted on December 7, 2004; an 1 2 attempted retrieval of the IUD in May 2015 was only partially successful, as the IUD broke and 3 some of the pieces could not be retrieved; and a second attempted retrieval in June 2015 was 4 unsuccessful. See SAC ¶¶ 19-22. Plaintiff was advised that a hysterectomy would be required to 5 remove the remaining IUD piece. See SAC ¶ 22. Plaintiff did not have a hysterectomy, and she 6 continues to suffer discomfort from the piece of IUD remaining inside her. See SAC ¶ 23. The 7 SAC asserts state law claims for: (1) strict products liability; (2) failure to warn; (3) defective 8 design; and (4) negligence. On May 29, 2019, the Teva Defendants moved to strike the SAC on the basis that it was United States District Court Northern District of California 9 10 filed in violation of the Court’s order granting leave to amend to add a single new “Paragard” 11 defendant. See Motion to Strike, ECF 72. On May 31, 2019, the Teva Defendants simultaneously 12 answered the SAC and moved to dismiss the SAC under Federal Rule of Civil Procedure 12(b)(2) 13 for lack of personal jurisdiction. See Answers, ECF 74, 75; Motion to Dismiss, ECF 73. 14 Following completion of briefing on the motion to strike and motion to dismiss, the Court vacated 15 the scheduled hearing dates of October 24, 2019 and October 31, 2019 and advised the parties that 16 the motions would be submitted for decision without oral argument. See Order Vacating Motion 17 Hearings, ECF 80. For the reasons discussed below, the Court GRANTS the Teva Defendants’ motion to 18 19 dismiss the SAC for lack of personal jurisdiction, without leave to amend; TERMINATES AS 20 MOOT the Teva Defendants’ motion to strike the SAC; and sua sponte ORDERS Plaintiff to 21 SHOW CAUSE why the SAC should not be dismissed as to the remaining Defendants. 22 I. TEVA DEFENDANTS’ MOTION TO DISMISS SAC UNDER RULE 12(b)(2) 23 The Court first addresses the Teva Defendants’ motion to dismiss for lack of personal 24 jurisdiction under Rule 12(b)(2). A Rule 12(b)(2) motion “must be made before pleading if a 25 responsive pleading is allowed.” Fed. R. Civ. P. 12(b). In the present case, the Teva Defendants 26 filed the Rule 12(b)(2) motion simultaneously with their answers. See Motion to Dismiss, ECF 27 73; Answers, ECF 74, 75. “[S]hould the defendant file a Rule 12(b) motion simultaneously with 28 the answer, the district court will view the motion as having preceded the answer and thus as 3 1 having been interposed in timely fashion.” 5C Charles Alan Wright, Arthur R. Miller & Edward 2 H. Cooper, Federal Practice and Procedure § 1361 (3d ed. 2004); see also Hosain-Bhuiyan v. Barr 3 Labs., Inc., No. 17 CV 114 (VB), 2017 WL 4122621, at *2 (S.D.N.Y. Sept. 14, 2017) (finding 4 Rule 12(b)(2) motion to dismiss timely where motion was filed simultaneously with answer). 5 Accordingly, the Court finds the Rule 12(b)(2) motion to be timely. Plaintiff does not argue to the 6 contrary. 7 A. 8 A party may challenge the Court’s personal jurisdiction over it by bringing a motion to United States District Court Northern District of California 9 Legal Standard dismiss under Federal Rule of Civil Procedure 12(b)(2). When a defendant raises a challenge to 10 personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is proper. 11 Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015). The plaintiff may meet that burden by 12 submitting affidavits and discovery materials. Id. “Where, as here, the defendant’s motion is 13 based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima 14 facie showing of jurisdictional facts to withstand the motion to dismiss.” Id. (internal quotation 15 marks and citation omitted). “[T]he plaintiff cannot simply rest on the bare allegations of its 16 complaint,” but when evaluating the plaintiff’s showing, the court must accept uncontroverted 17 allegations in the complaint as true and resolve factual disputes created by conflicting affidavits in 18 the plaintiff’s favor. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 19 2004) (internal quotation marks and citation omitted). 20 Where no applicable federal statute governs personal jurisdiction, “the law of the state in 21 which the district court sits applies.” Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements 22 Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003). “California’s long-arm statute allows courts to exercise 23 personal jurisdiction over defendants to the extent permitted by the Due Process Clause of the 24 United States Constitution.” Id. “[D]ue process requires that the defendant ‘have certain 25 minimum contacts’ with the forum state ‘such that the maintenance of the suit does not offend 26 traditional notions of fair play and substantial justice.’” Ranza, 793 F.3d at 1068 (quoting Int’l 27 Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks and citation 28 omitted)). 4 1 B. 2 A federal district court may exercise either general or specific personal jurisdiction over a 3 defendant. Daimler AG v. Bauman, 571 U.S. 117, 127-28 (2014). General jurisdiction exists 4 when the defendant’s contacts “are so continuous and systematic as to render [it] essentially at 5 home in the forum State.” Id. at 139 (internal quotation marks and citation omitted). “With 6 respect to a corporation, the place of incorporation and principal place of business are paradigm 7 bases for general jurisdiction.” Id. at 137 (internal quotation marks, citation, and alteration 8 omitted). In contrast, specific jurisdiction exists when the defendant’s contacts with the forum 9 state are more limited, but the plaintiff’s claims arise out of or relate to those contacts. Id. at 128. 10 United States District Court Northern District of California Discussion The Teva Defendants assert that Plaintiff cannot establish that they are subject to either 11 general or specific jurisdiction in California. Plaintiff contends that the Teva Defendants are 12 subject to both general and specific jurisdiction here. See Opp. at 6, ECF 77. 13 14 1. General Jurisdiction The Teva Defendants argue that nothing in this record establishes that they are subject to 15 general jurisdiction in California. They point to Plaintiff’s allegations that both Teva USA and 16 Teva Branded are Delaware corporations with their principal places of business in Pennsylvania. 17 See SAC ¶¶ 4-5. Plaintiffs do not allege facts or submit evidence suggesting that either of the 18 Teva Defendants is “essentially at home” in California. Accordingly, Plaintiff has not established 19 the existence of general jurisdiction. 20 In her opposition brief, Plaintiff argues that general jurisdiction lies because “Defendants 21 did advertise, sell, distribute and deliver the Paragard Intrauterine Devices purposely within the 22 State of California,” and that “[b]y virtue of Defendant doing business in California [sic] support 23 general jurisdiction of this Court.” Opp. at 6, ECF 77. Plaintiff does not allege facts or submit 24 evidence showing that either of the Teva Defendants advertised, sold, distributed, or delivered the 25 Paragard IUD in California. Moreover, such activities would be insufficient to approximate a 26 physical presence in California as required for the exercise of general jurisdiction. See Young v. 27 Actions Semiconductor Co., 386 F. App’x 623, 627 (9th Cir. 2010) (negotiation of licenses and 28 sales of products in California insufficient to establish general jurisdiction); Ranza, 793 F.3d at 5 1 1069 (sales of goods, maintenance of staff, and other business contacts in forum statue insufficient 2 to establish general jurisdiction). 3 4 5 United States District Court Northern District of California 6 Accordingly, Plaintiff has not met her burden to make out a prima facie case of general jurisdiction. 2. Specific Jurisdiction The Teva Defendants also argue that Plaintiff cannot establish the existence of specific 7 jurisdiction. The Ninth Circuit has established a three-prong test for whether a court can exercise 8 specific personal jurisdiction: (1) the defendant must have “either purposefully availed itself of 9 the privilege of conducting activities in California, or purposefully directed its activities toward 10 California,” thereby “invoking the benefits and protections of its laws”; (2) the claim must arise 11 out of or relate to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must 12 be reasonable, i.e. it must comport with fair play and substantial justice. Schwarzenegger, 374 13 F.3d at 802. The plaintiff bears the burden on the first two prongs. Id. “If the plaintiff fails to 14 satisfy either of these prongs, personal jurisdiction is not established in the forum state.” Id. “If 15 the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the 16 defendant to present a compelling case that the exercise of jurisdiction would not be reasonable.” 17 Id. (internal quotation marks and citation omitted). 18 Plaintiff does not submit affidavits or other evidence, relying solely on the allegations of 19 the SAC to meet her burden of satisfying the first two prongs of the Schwarzenegger test. The 20 Teva Defendants rely on the declaration of Brian Shanahan, the Secretary of Teva USA. See 21 Shanahan Decl., ECF 52-1. 22 23 a. Purposeful Availment / Purposeful Direction Purposeful availment and purposeful direction are two distinct concepts. Schwarzenegger, 24 374 F.3d at 802. In the Ninth Circuit, a purposeful availment analysis generally is used in suits 25 sounding in contract, while a purposeful direction analysis generally is used in suits sounding in 26 tort. Id. However, the Supreme Court has held that a purposeful availment analysis is appropriate 27 in products liability cases. See J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 878 (2011). 28 This Court therefore considers whether Plaintiff has made a showing that each of the Teva 6 1 Defendants “purposefully avails itself of the privilege of conducting activities within the forum 2 State, thus invoking the benefits and protections of its laws.” Id. at 877 (internal quotation marks 3 and citation omitted). United States District Court Northern District of California 4 Plaintiff does not allege facts indicating that either Teva USA or Teva Branded avails itself 5 of the privilege of conducting business in California. For example, Plaintiff does not allege that 6 either of the Teva Defendants sell products in California. Plaintiff alleges that the Teva 7 Defendants purchased “Paragard IUD,” but it is not clear what they mean by that allegation. See 8 SAC ¶ 15. Plaintiff alleges that “[a]fter acquisition of the Paragard IUD® device” the Teva 9 Defendants “investigated claims, including testing IUDs, serviced claims, and held themselves out 10 to be generally liable to consumers of the IUD, including plaintiff.” SAC ¶¶ 4-5. Plaintiff does 11 not allege that any of these activities occurred in California, nor does she explain how 12 investigating claims arising out of the Paragard IUD invoked the benefits and protections of 13 California’s laws. 14 15 16 17 Accordingly, Plaintiff has failed to meet her burden on the first prong of the Schwarzenegger test. b. Arising Out of Forum Activities Because Plaintiff has failed to satisfy the first prong of the Schwarzenegger test, the Court 18 need go no further before concluding that Plaintiff has failed to meet her burden of establishing 19 personal jurisdiction over the Teva Defendants. See Schwarzenegger, 374 F.3d at 802 (holding 20 that personal jurisdiction is not established if the plaintiff fails to satisfy either of the first two 21 prongs). However, even if Plaintiff had satisfied the first prong, the Court concludes that Plaintiff 22 has failed to satisfy the second prong because she has not shown that her claims arise out of the 23 Teva Defendants’ forum-related activities. 24 In determining whether a plaintiff’s claim arises out of the defendant’s forum-related 25 activities, “the Ninth Circuit follows the ‘but for’ test.” Menken v. Emm, 503 F.3d 1050, 1058 (9th 26 Cir. 2007) (internal quotation marks and citation omitted). Thus, Plaintiff must show that she 27 would not have suffered an injury “but for” the Teva Defendants’ forum-related conduct. See id. 28 Plaintiff has not alleged that either of the Teva Defendants sold the Paragard IUD that was inserted 7 United States District Court Northern District of California 1 in her. To the contrary, Plaintiff alleges that “during the relevant time period, FEI Women’s 2 Health LLC and Ortho-McNeil LLC were the manufacturers and marketers of the Paragard IUD.” 3 SAC ¶ 12. Moreover, the Teva Defendants point to the Shanahan Declaration, establishing that 4 Teva Branded never manufactured or sold Paragard IUDs, Teva USA never manufactured 5 Paraguard IUDs, and Teva USA did not sell Paragard IUDs prior to December 31, 2004. See 6 Shanahan Decl. ¶¶ 5-6, ECF 52-1. Since Plaintiff’s Paragard IUD was inserted on December 7, 7 2004, see SAC ¶ 19, the Shanahan Declaration establishes that neither of the Teva Defendants 8 could have sold the IUD inserted into Plaintiff. Thus, Plaintiff cannot establish that she would not 9 have suffered the IUD-related injuries “but for” the Teva Defendants’ activities. 10 Plaintiff alleges that she and her doctor sent the broken pieces of the IUD to “Teva 11 Women’s Health, 825 Wurlitzer Drive, North Tonawanda, NY 14120,” and suggests that this fact 12 gives rise to personal jurisdiction over Teva USA and Teva Branded. See SAC ¶ 15. However, 13 Plaintiff does not explain how New York based “Teva Women’s Health” is related to 14 Pennsylvania based Teva USA or Teva Branded. 15 Plaintiff alleges that the Teva Defendants “assumed the duties and liabilities of the prior 16 manufacturers and marketers” of the Paragard IUD. SAC ¶ 40. That allegation is conclusory and 17 unsupported by any facts establishing that either Teva USA or Teva Branded assumed the 18 liabilities of whatever company sold the Paragard IUD that was inserted into Plaintiff. Moreover, 19 the Court is at a loss to understand how the Teva Defendants’ alleged assumption of a 20 predecessor’s liability could have been a “but for” cause of Plaintiff’s earlier injury. 21 Plaintiff thus has failed to meet her burden on the second prong of the Schwarzenegger test 22 to show that she would not have suffered an injury “but for” the Teva Defendants’ forum-related 23 conduct. That failure constitutes an independent basis for finding that Plaintiff has failed to make 24 a prima facie showing of personal jurisdiction over the Teva Defendants, separate and apart from 25 Plaintiffs’ failure to satisfy the first prong of the Schwarzenegger test. 26 27 28 c. Reasonableness Because Plaintiff has failed to satisfy her burden with respect to the first two prongs, the burden does not shift to the Teva Defendants to satisfy the third prong. See Schwarzenegger, 374 8 1 F.3d at 802 (burden shifts to the defendant to show that exercise of personal jurisdiction would not 2 be reasonable only if the plaintiff satisfies both of the first two prongs). 3. 3 Because Plaintiff has failed to make a prima facie showing that the Teva Defendants are 4 5 subject to either general jurisdiction or specific jurisdiction in California, the Teva Defendants are 6 entitled to dismissal for lack of personal jurisdiction under Rule 12(b)(2). Having determined that Plaintiff’s claims against the Teva Defendants are subject to 7 United States District Court Northern District of California Conclusion 8 dismissal, the Court must decide whether leave to amend is warranted. Leave ordinarily must be 9 granted unless one or more of the following factors is present: (1) undue delay, (2) bad faith or 10 dilatory motive, (3) repeated failure to cure deficiencies by amendment, (4) undue prejudice to the 11 opposing party, and (5) futility of amendment. Foman v. Davis, 371 U.S. 178, 182 (1962); see 12 also Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (discussing 13 Foman factors). The Court finds no undue delay (factor 1) or bad faith (factor 2). However, 14 despite the Court’s prior order granting judgment on the pleadings, Plaintiff still has not alleged 15 facts showing the existence of personal jurisdiction (factor 3). Granting further opportunity to 16 amend would impose undue prejudice on the Teva Defendants (factor 4) where it appears that 17 amendment would be futile (factor 5). Plaintiff has given no indication that she could amend her 18 pleading to add additional facts establishing personal jurisdiction over the Teva Defendants. Accordingly, the Teva Defendants’ motion to dismiss for lack of personal jurisdiction is 19 20 21 GRANTED WITHOUT LEAVE TO AMEND. II. TEVA DEFENDANTS’ MOTION TO STRIKE SAC In light of the Court’s determination that the Teva Defendants are entitled to dismissal 22 23 without leave to amend, the Teva Defendants’ motion to strike the SAC is TERMINATED AS 24 MOOT. 25 26 III. REMAINING DEFENDANTS As discussed above, the Court granted Plaintiff leave to file a second amended complaint 27 curing the defects in her claims against the Teva Defendants and adding a single new Paragard 28 entity as a defendant. Plaintiff exceeded the scope of the leave granted by the Court when she 9 1 filed a second amended complaint adding three new defendants, FEI Women’s Health LLC, 2 Ortho-McNeil Pharmaceutical, LLC, and Duramed Pharmaceuticals. Moreover, although the SAC 3 was filed more than ninety days ago, on May 17, 2019, Plaintiff has not filed proofs of service of 4 process on the three new Defendants. “If a defendant is not served within 90 days after the 5 complaint is filed, the court – on motion or on its own after notice to the plaintiff – must dismiss 6 the action without prejudice against that defendant or order that service be made within a specified 7 time.” Fed. R. Civ. P. 4(m). Plaintiff is hereby ORDERED TO SHOW CAUSE, in writing and within fourteen days, 8 United States District Court Northern District of California 9 why the SAC should not be dismissed with respect to Defendants FEI Women’s Health LLC, 10 Ortho-McNeil Pharmaceutical, LLC, and Duramed Pharmaceuticals on the bases that these 11 defendants were added in violation of the Court’s express order and they have not been timely 12 served as required under Rule 4(m). 13 14 IV. ORDER (1) The Teva Defendants’ motion to dismiss for lack of personal jurisdiction is GRANTED WITHOUT LEAVE TO AMEND; 15 16 (2) The Teva Defendants’ motion to strike is TERMINATED AS MOOT; and 17 (3) Plaintiff is ORDERED TO SHOW CAUSE, in writing and on or before October 18 31, 2019, why the SAC should not be dismissed with respect to Defendants FEI 19 Women’s Health LLC, Ortho-McNeil Pharmaceutical, LLC, and Duramed 20 Pharmaceuticals. 21 22 23 24 Dated: October 17, 2019 ______________________________________ BETH LABSON FREEMAN United States District Judge 25 26 27 28 10
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