Empirian Health, LLC v. Specialty RX, Inc.
OPINION AND ORDER: it is ORDERED that defendant Specialty RX, Inc.'s motion to dismiss or, in the alternative, transfer venue to the District of New Jersey (Doc. 3 ) is denied. Signed by Honorable Judge Myron H. Thompson on 11/14/2023. (cwl, )
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION
EMPIRIAN HEALTH, LLC,
SPECIALTY RX, INC.,
CIVIL ACTION NO.
OPINION AND ORDER
Plaintiff Empirian Health, LLC brings this lawsuit
against Specialty RX, Inc., asserting claims for breach
of contract, unjust enrichment, and declaratory relief.
Jurisdiction is proper pursuant to 28 U.S.C. §§ 1332
(diversity) and 1441 (removal).
This lawsuit is now
before the court on Specialty RX’s motion to dismiss or,
in the alternative, to transfer venue.
For the reasons
set forth below, the motion is denied.
I. FACTUAL BACKGROUND
Empirian is incorporated in Delaware and has its
principal place of business in Montgomery, Alabama.
“negotiates and arranges manufacturer drug rebates for
Specialty RX, a pharmacy whose State of incorporation and
Empirian’s rebate administration services.
2019, the parties entered a Prescription Administration
Agreement, which had an initial term of 30 months and,
absent a written objection, would automatically renew for
another two-year term.
An exclusivity provision barred
Specialty RX from submitting its rebate claims to any
agreement and for an additional six months upon its
Two weeks after the agreement took effect, Specialty
Specialty RX submitted claims roughly once a month.
some point, the parties’ relationship began to sour, and
in early 2021, Specialty RX emailed Empirian purporting
to terminate the agreement as of September 5.
September 5 passed, Specialty RX ceased submitting its
Empirian filed suit in a state court in Montgomery,
Alabama, claiming that Specialty RX’s obligations under
the agreement extended through the end of September and
that, in any event, Specialty RX was barred from using
damages, Empirian sought restitution on the theory that
it had overpaid Specialty RX on certain rebate claims and
that Specialty RX had failed to honor the agreement’s
provisions governing reimbursements.
requested a declaratory judgment that Specialty RX was
not entitled to any further rebate payments.
One month later, Specialty RX removed Empirian’s
lawsuit to this court.
Specialty RX also sued Empirian
in federal court in New Jersey, “alleging, inter alia,
[Empirian’s] failure to provide Specialty with its full
share of its own rebate payments.”
Mot. to Dismiss (Doc. 4) at 2.
Br. in Support of
Empirian sought to
transfer the New Jersey action to this federal court in
abeyance pending this court’s determination of whether
the instant case should be dismissed or transferred.
2:22-cv-6268-SDW (D.N.J. Aug. 8, 2023) (Espinosa, M.J.)
II. MOTION TO DISMISS: LACK OF PERSONAL JURISDICTION
With its motion to dismiss, Specialty RX asserts that
that this court lacks person jurisdiction over it.
dismissal motion in which no evidentiary hearing is held,
a plaintiff need establish only a prima-facie case of
See Madara v. Hall, 916 F.2d 1510, 1514
(11th Cir. 1990).
“The district court must accept the
facts alleged in the complaint as true, to the extent
they are uncontroverted by the defendant’s affidavits.”
Where the parties’ evidence conflicts, all evidence
relating to jurisdictional facts is to be construed in
the light most favorable to the plaintiff.
Service Ins. Co. v. Frit Indus., Inc., 358 F.3d 1312,
1319 n.6 (11th Cir. 2004).
When a defendant challenges personal jurisdiction,
the plaintiff bears the burden of establishing that the
exercise of personal jurisdiction over the defendant
comports with certain fundamental requirements.
the requirements of the forum State’s long-arm provision
must be met.
Second, the requirements of the due process
clause of the Fourteenth Amendment to the United States
Dredging Co., 979 F.2d 827, 830 (11th Cir. 1992).
this case, the two are coextensive, as Alabama’s long-arm
provision extends to the limits of due process.
Civ. P. 4.2(b).
First, the defendant must have “certain
minimum contacts” with the forum State and, second, the
exercise of jurisdiction over the defendant must not
offend “traditional notions of fair play and substantial
Int’l Shoe Co. v. Washington, 326 U.S. 310,
a. Minimum Contacts
Personal jurisdiction is of two sorts: “specific”
Here, Empirian alleges only specific
contacts with the applicable forum must be related to the
plaintiff’s cause of action or have given rise to it;
involve some act by which the defendant purposefully
avails itself of the privilege of conducting activities
within the forum; and be such that the defendant should
See SEC v. Carrillo, 115 F.3d 1540, 1542 (11th
sufficient minimum contacts with the State of Alabama to
For more than two years, Specialty RX
engaged in an ongoing relationship with an Alabama-based
submitting rebate claims on about a monthly basis.
contacts were of no small consequence to Specialty RX,
which amassed millions of dollars in rebate payments
through its dealings with Empirian.
Specialty RX contends that its contacts with Alabama
are constitutionally insignificant for three reasons.
First, none of the conduct that Empirian claims put
Specialty RX in breach of the agreement occurred in
administration provider, which Specialty RX suggests is
Similarly, Empirian’s restitution
claim concerns rebate funds in Specialty RX’s possession
in New Jersey.
Specialty RX insists that, because the
constitutionally relevant contacts.
Specialty RX’s theory of personal jurisdiction is
foreclosed by Burger King Corp. v. Rudzewicz, 471 U.S.
462 (1985), which held that a contract could be the source
of sufficient minimum contacts between a forum state and
an out-of-state defendant.
breached a contract.
Like the instant case, Burger
The Supreme Court explained “that
continuing relationships and obligations with citizens
of another state’ are subject to regulation and sanctions
471 U.S. at 473 (quoting Travelers Health
Ass’n v. Virginia, 339 U.S. 643, 647 (1950)).
is true here.
Specialty RX entered a contract with an
Alabama-based company and can be constitutionally held
occurred outside the State.
Second, Specialty RX insists that at no point during
its dealings with Empirian did it avail itself of Alabama
The court disagrees.
“To determine whether there
has been purposeful availment of a state’s laws, the
‘deliberate’ or merely a ‘fortuitous’ contact with the
Bowling v. Founders Title Co., 773 F.2d 1175,
sophisticated corporations that contemplated a long-term
business relationship was merely “fortuitous.”
Third and finally, Specialty RX asserts it could not
have reasonably foreseen being haled into Alabama when
Empirian was incorporated in Delaware, and the agreement
contained a choice-of-law provision invoking Delaware
company ... to provide services to the Defendant (in New
Br. in Support of Mot. to Dismiss (Doc. 4) at
7 (emphasis in original).
But Specialty RX had ample
notice that Empirian’s principal place of business was
The only address Empirian provided in the
Prescription Administration Agreement (Doc. 7-3) at 6;
see also id. at 25.
Indeed, when Specialty RX wished to
renegotiate certain provisions of the agreement, it sent
a letter to Empirian’s Montgomery address.
(Doc. 7) ¶ 5.
After years of transacting business with
an Alabama-based company and profiting millions from the
exchange, Specialty RX cannot now claim to be blindsided
that a dispute under the Agreement might be litigated in
intentionally forged an ongoing relationship with an
Alabama-based business and engaged with Empirian on about
a monthly basis.
The minimum contacts test is satisfied.
b. Fair Play and Substantial Justice
In evaluating whether the exercise of jurisdiction
comports with fair play and substantial justice, the
court must consider such factors as the burden on the
defendant, the forum State’s interest in adjudicating the
dispute, the plaintiff’s interest in obtaining convenient
and effective relief, the interstate judicial system’s
interest in obtaining the most efficient resolution of
controversies, and the shared interest of the several
See Burger King, 471 U.S. at 477.
Specialty RX submits that forcing it to defend the
suit in Alabama violates basic principles of fairness
when it “merely sat at home in New Jersey and allowed
Empirian to process and collect [its] rebate claims and
Reply (Doc. 25) at 7.
However it conceives
of its relationship with Empirian, Specialty RX fails to
lawsuit where the contract it entered was performed.
burden on Specialty RX in defending the suit in Alabama
Moreover, Alabama has a substantial
interest in ensuring that companies that conduct business
within its borders have a convenient means of vindicating
their contractual rights.
Nor is there anything in the
record to suggest that haling Specialty RX into Alabama
undermines the interstate judicial system’s interest in
The court can therefore constitutionally
exercise personal jurisdiction over Specialty RX.
III. MOTION TO DISMISS: IMPROPER VENUE
should be dismissed for improper venue under 28 U.S.C.
§ 1391(b). See Br. in Support of Mot. to Dismiss (Doc. 4)
But the general venue statute does not apply to
removed actions: “once a case is properly removed to
federal court, a defendant cannot move to dismiss on
§ 1391 venue grounds.”
Hollis v. Fla. State Univ., 259
F.3d 1295, 1299 (11th Cir. 2001).
Because Specialty RX
removed this lawsuit to federal court, the court denies
the motion to dismiss to the extent it asserts improper
IV. MOTION TO TRANSFER VENUE
Specialty RX next argues that the case should be
transferred to the U.S. District Court for the District
of New Jersey, where Specialty RX has a similar lawsuit
pending against Empirian.
Specialty RX invokes 28 U.S.C.
§ 1404(a), which authorizes a district court to transfer
a civil action to any other district in which it might
have been brought “for the convenience of parties and
witnesses, in the interest of justice.”
“Because federal courts normally afford deference to
a plaintiff’s choice of forum, the burden is on the movant
to show that the suggested forum is more convenient or
Carroll v. Texas Instruments, Inc., 910 F.
Supp. 2d 1331, 1333 (M.D. Ala. 2012) (Thompson, J.).
conflicting arguments as to venue, but must engage in an
individualized, case by case consideration of convenience
“In resolving a § 1404(a) motion, the court first
determines whether the action could have originally been
brought in the proposed district of transfer,” and, “if
so, the court then weighs the convenience of the parties
and considers interests of justice to determine whether
a transfer is appropriate.”
originally have been brought in the District of New
Jersey. “Accordingly, the court’s inquiry focuses solely
on whether the balance of justice and convenience favors
transfer. In making this determination, courts generally
consider a number of non-exhaustive factors, including
the following: the plaintiff’s initial choice of forum;
the convenience of the parties; the relative means of the
parties; the convenience of the witnesses; the relative
ease of access to sources of proof; the availability of
relevant documents; the financial ability to bear the
cost of the change; and trial efficiency.”
The court will first examine whether these factors
extent to which the pendency of Specialty RX’s New Jersey
action should influence the § 1404(a) analysis.
a. The § 1404 Factors
Plaintiff’s Choice of Forum.
place of business is in the forum originally chosen for
this litigation: the state court in Montgomery, Alabama.
Empirian’s choice of forum in its home State should
receive considerable weight and “should not be disturbed
unless it is clearly outweighed by other considerations.”
Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 260
(11th Cir. 1996) (quoting Howell v. Tanner, 650 F.2d 610,
616 (5th Cir. 1981)).1
Convenience of the Parties.
“When evaluating the
relative convenience of the parties, [t]ransfer should
be denied if it would merely shift inconvenience from one
party to another.”
Carroll, 910 F. Supp. 2d at 1334
(quoting Kolodziej v. Mason, No. 1:10-cv-2012-JEC, 2011
WL 2009467, at *8 (N.D. Ga. May 20, 2011) (Carnes, C.J.)).
1. In Bonner v. City of Prichard, 661 F.2d 1206, 1209
(11th Cir. 1981) (en banc), the Eleventh Circuit Court
of Appeals adopted as binding precedent all of the
decisions of the former Fifth Circuit handed down prior
to the close of business on September 30, 1981.
Specialty RX asserts that, because it is “a New
Jersey corporation” and Empirian is a “Delaware company,”
litigating this dispute in Alabama would be inconvenient
for the parties.
Br. in Support of Mot. to Dismiss
conducts business, much less where it can conveniently
litigate a dispute.
Nothing in the record suggests that
Empirian has any presence in Delaware that would allay
District of New Jersey.
Granting Specialty RX’s motion
would only shift the burden of litigating out-of-state
Because Specialty RX has not claimed that
retaining this action in Alabama would pose any special
inconvenience, the court finds this factor is neutral.
Relative Means of the Parties.
Specialty RX insists
nationwide, “is more accustomed, and able, to litigate
its claims outside of its ‘home state.’”
Br. in Support
of Mot. to Dismiss (Doc. 4) at 13.
But taking Empirian’s
allegations as true, which the court must on a motion to
dismiss, Empirian conducts its business in Alabama, not
where its clients are located.
See Compl. (Doc. 7) ¶ 6.
Receiving and processing rebate claims in Alabama from
companies across the country does not necessarily mean
parties are sophisticated corporations, and the record
presents no reason to doubt that either one could fund
out-of-state travel as needed.
The court finds this
factor is neutral.
evaluate which forum will be more convenient for the
witness without knowing who the witnesses might be, what
knowledge they have about the litigation, and where those
witnesses are located.
“If the moving party merely has
made a general allegation that necessary witnesses are
located in the transferee forum, without identifying them
district court to determine what and how important their
testimony will be, the motion to transfer should be
15 Fed. Prac. & Proc. Juris. § 3851 (4th ed.
Specialty RX does not name a single witness in its
It alludes to a third-party rebate services
Alabama-based--but conclusory assertions that one forum
will be more convenient for an unnamed witness cannot
sustain Specialty RX’s burden.
This factor is therefore
Access to Sources of Proof. Specialty RX’s assertion
that the District of New Jersey offers superior access
to evidence suffers precisely the same defect.
It is the
[sources of proof], their importance to the resolution
of the case, and the inability to move or copy them
15 Fed. Prac. & Proc. Juris. § 3853 (4th ed.
documents or records that would be more accessible in New
Instead, it assumes that, because Empirian’s
complaint takes issue with business decisions Specialty
RX made from its corporate headquarters, “the facts and
documents relevant to the subject litigation” will be
“located in the District of New Jersey.”
Br. in Support
of Mot. to Dismiss (Doc. 4) at 13.
Specialty RX may be right, or it may not be.
court cannot know without a better understanding of what
evidence is most germane to the litigation and where that
evidence is located.
A bare allegation that the District
of New Jersey offers better access to sources of proof
falls far short of satisfying Specialty RX’s burden.
This factor, too, is neutral at best.
Locus of Operative Facts.
“In determining the locus
of operative facts, the court must look at ‘the site of
the events from which the claim arises.’”
Nat’l Tr. Ins.
v. Pennsylvania Nat’l Mut. Cas. Ins. Co., 223 F. Supp.
3d 1236, 1245 (M.D. Fla. 2016) (Howard, J.) (quoting
Charter Oak Fire Ins. v. Broan-Nutone, L.L.C., 294 F.
Supp. 2d 218, 220 (D. Conn. 2003) (Hall, J.)).
there are multiple loci of operative facts and no single
locus is primary in this respect, courts treat this
factor neutral in the Section 1404(a) analysis.”
461 F. Supp. 3d at 1211-12.
In this case, New Jersey and Alabama are both loci
of operative facts.
On the one hand, the agreement was
performed mostly in Alabama, where Empirian processed
Specialty RX’s rebate claims, and Empirian’s declaratory
judgment claim concerns funds currently in Empirian’s
Empirian’s restitution claim seeks funds in Specialty’s
The court finds that the “locus of operative facts”
factor is either neutral (insofar as it involves multiple
loci) or weighs in Specialty RX’s favor, as the gravamen
of Empirian’s complaint addresses Specialty RX’s dealings
with a third-party provider.
But to the extent this
factor favors Specialty RX, it does so “only slightly.”
See Carroll, 910 F. Supp. 2d at 1341 (quoting Fedonczak
v. State Farm Mut. Auto. Ins. Co., No. 2:10-cv-61-MEF,
2010 WL 1856080, at *4 (M.D. Ala. May 4, 2010) (Fuller,
Interests of Justice.
Claiming that the “interests
of justice” weigh in its favor, Specialty RX relies on
many of the same arguments it advanced for why the court
lacks personal jurisdiction: that the alleged breach of
the agreement occurred in New Jersey; that Specialty RX
Specialty RX to litigate this action in Alabama would be
For the reasons already discussed, the court is
Nor does the record furnish any other basis to
believe that the interests of justice would be disserved
by this court retaining the case.
this final factor is also neutral.
The court finds that
Having considered the § 1404(a) factors,2 the court
cannot conclude that the case should be transferred to
the District of New Jersey.
The court cannot identify
any factor that counsels strongly enough in favor of
transfer to overcome the deference given to Empirian’s
choice of forum.
b. Specialty RX’s New Jersey Action
Specialty RX maintains that no deference is owed to
against Empirian in New Jersey; and, second, Specialty
RX contends that Empirian filed the instant action in a
strategic attempt to avoid out-of-state litigation.
overlapping issues and parties are pending in two federal
2. Neither party discusses the availability of
compulsory process or the alternative forum’s familiarity
with the governing law. The court is left to conclude
that these factors do not support transfer.
courts, there is a strong presumption ... that favors the
Manuel v. Convergys Corp., 430 F.3d 1132, 1135
(11th Cir. 2005).
Applying the first-filed rule here
litigation in the District of New Jersey.
pending in Alabama and New Jersey both pertain to rebate
violation of the agreement and that Empirian says are not
owed due to Specialty RX’s alleged breach.
“substantial overlap” for the first-filed case to take
See Marietta Drapery & Window Coverings Co.
v. N. River Ins. Co., 486 F. Supp. 2d 1366, 1370 (N.D.
Ga. 2007) (Story, J.).
exception,” which “applies when one party, on notice of
a potential lawsuit, files a declaratory judgment action
in its home forum.”
Collegiate Licensing Co. v. Am. Cas.
Co. of Reading, 713 F.3d 71, 79 (11th Cir. 2013).
party that filed first must have done so “upon receipt
of specific, concrete indications that a suit by the
defendant [was] imminent.”
1 Cyc. of Federal Proc.
§ 2:175 (3d ed. 2023) (quoting Youngevity Int’l, Inc. v.
Renew Life Formulas, Inc., 42 F. Supp. 3d 1377, 1383
(S.D. Cal. 2014) (Battaglia, J.)).
In other words, the
exception is triggered when a party attempts to preempt
an impending lawsuit by asking a court to declare that
the disputed conduct was lawful, thereby anchoring the
Collegiate Licensing, 713 F.3d at 79.
Specialty RX asserts this exception applies because
Empirian allegedly filed this lawsuit after Specialty RX
insinuated that it had “learned disquieting information
about the inaccuracy of [Empirian’s] rebate payments” and
gave Empirian six days to respond to a settlement offer.
Reply (Doc. 25) at 12.
The instant suit was filed six
“declaratory judgment” that Specialty RX is not entitled
anticipate a lawsuit by Specialty RX for the purportedly
The issue is a close one.
On the one hand, the
timing of Empirian’s lawsuit and the inclusion of the
declaratory judgment request are suspicious.
RX’s allegations suggest that Empirian may have filed the
complaint when it did in an attempt to forum shop.
the other hand, Empirian is not merely filing a defensive
declaratory-judgment action but rather asserting its own
rights under the Agreement to breach-of-contract damages
allegations of gamesmanship are not convincing enough to
upend the court’s analysis of the § 1404(a) factors,
almost none of which favor transfer.
Even if the court
credits Specialty RX’s contentions, the anticipatory suit
Manuel, 430 F.3d at 1135.
reason to transfer this case to the District of New
As this court has noted several times now,
Specialty RX has failed to carry that burden.
Accordingly, it is ORDERED that defendant Specialty
RX, Inc.’s motion to dismiss or, in the alternative,
transfer venue to the District of New Jersey (Doc. 3) is
DONE, this the 14th day of November, 2023.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE
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