Judge Stark: Two opposing personal jurisdiction decisions involving corporate parents and their subsidiaries
In this multidistrict litigation consolidating nine patent infringement actions, Judge Stark recently issued a Report and Recommendation Regarding Motions for Summary Judgment and to Dismiss and Order on Evidentiary Motions. In re Rosuvastatin Calcium Patent Litig., MDL No. 08-1949 (D. Del. Dec. 11, 2009). One such motion was Defendant Aurobindo India’s Motion for Summary Judgment of No Personal Jurisdiction. Id. at 5. Aurobindo India argued that if it is dismissed from the case, so must defendant Aurobindo USA because of the absence of “the necessary and indispensible Aurobindo India.” Id. However, Judge Stark agreed with plaintiffs that under Forest Labs., Inv. v. Cobalt Labs., Inc., 2009 WL 605745 (D. Del. Mar. 9, 2009), and considering the record, id. at 6-9, there was sufficient evidence to conclude that “Aurobindo USA ‘engages in [a] persistent course of conduct’ in Delaware, thereby establishing general jurisdiction.” Id. at 9 (citing 10 Del. C. § 3104(c)(4). Moreover, “[u]nder the alter ego and agency theories, these jurisdictional contacts of Aurobindo USA may be imputed to Aurobindo India.” Id.
A different result was reached when Judge Stark considered defendant Apotex Inc.’s Motion to Dismiss for Lack of Personal Jurisdiction or in the Alternative to Transfer to the Middle District of Florida. Id. at 10. Here, Judge Stark found insufficient contacts with Delaware but that transfer was warranted. Id. Judge Stark noted that “Apotex Inc. is a Canadian corporation with a principal place of business in Canada. It has no offices, facilities, telephone listings, bank accounts, or property in Delaware. It does not have employees, or do business, in Delaware.” Id. at 11. Although plaintiffs argued that defendant Apotex Corp.’s contacts with Delaware should be imputed to Apotex Inc., the same argument that was successful with the Aurobindo defendants, here, Judge Stark found that plaintiffs failed to meet their burden. Id. “Apotex Corp. generates its own revenue, with which it purchases the products it sells. Apotex Corp. decides which of Apotex Inc.’s approved products it will market. Apotex Corp. pays Apotex Inc. for administrative services rendered by Apotex Inc. and the two companies maintain distinct books, records, financial statements, and tax returns.” Id. at 11-12. Judge Stark subsequently transferred the suit against Apotex Inc. to Florida, where Apotex Inc. conceded jurisdiction exists. Id. at 12.