ANI Pharmaceuticals, Inc. v. Method Pharmaceuticals, LLC et al

Filing 52

MEMORANDUM OPINION. Signed by Judge Maryellen Noreika on 1/11/2019. (dlw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ANI PHARMACEUTICALS, INC.,
Plaintiff,

v.
METHOD PHARMACEUTICALS, LLC
and MATTHEW SCOTT TUCKER,
Defendants.

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C.A. No. 17-1097

MEMORANDUM OPINION
Geoffrey G. Grivner, BUCHANAN, INGERSOLL & ROONEY, P.C., Wilmington, DE; S. Lloyd Smith,
James T. Wilcox, Alexandre H. Gapihan, BUCHANAN, INGERSOLL & ROONEY, P.C., Alexandria,
VA - attorneys for Plaintiff

J. Clayton Athey, Eric J. Juray, PRICKETT, JONES & ELLIOTT, P.A., Wilmington, DE; Christopher
J. Schwegmann, Jared D. Eisenberg, LYNN PINKER Cox & HURST, LLP, Dallas, TX - attorneys
for Defendants

January 11, 2019
Wilmington, Delaware

Before the Court is the motion of Defendants Method Pharmaceuticals, LLC ("Method")
and Matthew Scott Tucker ("Tucker") (collectively "Defendants") to "Dismiss Under Federal Rule
of Civil Procedure 12(b)(2) Or, In the Alternative, Transfer Venue" to the United States District
Court for the Northern District of Texas pursuant to 28 U.S.C. § 1404(a). (D.I. 11). Plaintiff ANI
Pharmaceuticals, Inc. ("Plaintiff' or "ANI") opposes both dismissal and transfer, but requests that,
should the Court deem transfer proper, the case be transferred to the United States District Court
for the District of Minnesota. (D.I. 13). 1 For the reasons set forth below, Defendants' motion to
transfer is granted, and this case will be transferred to the Northern District of Texas.

I.

BACKGROUND
Plaintiff filed its Complaint against Defendants on August 7, 2017 alleging violations of

§§ 43(a) and 43(a)(l)(B) of the Lanham Act, 15 U.S.C. § 1125(a), as well as a Delaware state law
claim for deceptive trade practices, under 6 Del. C. § 2532, and a common lawtortious interference
claim. (D.I. 1 at

,r,r 43-72).

The Complaint states "[t]his Court has personal jurisdiction over

Defendants because the Defendants have solicited sourcing contracts with McKesson Corp.
[("McKesson")], a Delaware Corporation that distributes pharmaceuticals at a retail sale level
throughout the District." (Id. at

,r 11 ).

Further, the Complaint alleges that "Defendant Tucker,

directed, sanctioned, actively participated in, and voluntarily and intentionally caused the above-

On November 19, 2018, the Court ordered the parties to "update the Court on or before
December 13, 2018 as to whether any additional information regarding personal
jurisdiction has been obtained since the original briefing." (D.I. 45 at 2). On
December 13, 2018, Defendants' counsel, on behalf of all parties, informed the Court that
"no additional information regarding personal jurisdiction has been obtained since the
original briefing on ... [the] motion to dismiss (D.I. 11)." (D.I. 46).

1

from Federal law, the underlying action and its potential results have a direct connection to the
Northern District of Texas.
11.

Public policies of the fora

Neither Plaintiff nor Defendants address the relative public policies of hearing the case in
District of Delaware versus the Northern District of Texas, and thus the Court finds this factor to
be neutral.
12.

Familiarity of the trial judge with the applicable state law m
diversity cases

Neither Plaintiff nor Defendants address this factor. Two counts in Plaintiffs Complaint
arise under the federal Lanham Act, and thus the familiarity of the respective districts with state
law is unnecessary with respect to these claims. The remaining two counts allege basic claims of
tortious interference and deceptive trade practices. The Court finds this factor to be neutral.
13.

Balancing the private and public factors

A review of the twelve Jumara factors counsels the Court that a transfer of this case to the
Northern District of Texas is proper. Eight factors weigh at least somewhat in favor in transferring
the case, while the remaining four are neutral. Though a plaintiffs choice of venue is generally
provided paramount consideration under Jumara, the Court's inability to assert personal
jurisdiction over one of the defendants undermines that deference here. Transfer to the Northern
District of Texas would allow for this case to be heard in its entirety, and thus, the Court finds that
transfer is appropriate.

IV.

CONCLUSION
For the foregoing reasons, the Court denies Defendants' motion to dismiss, but grants their

motion to transfer the case to the United States District Court for the Northern District of Texas
pursuant to 28 U.S.C. § 1404(a). An appropriate order will issue.

19

9.

Relative administrative difficulty due to court congestion

This factor is neutral. The Court takes judicial notice of the most recent Judicial Caseload
Profiles 8, as of September 30, 2018, which indicate that the median length of time between filing
and trial for civil cases is 28.7 months in the District of Delaware and 28.0 months in the Northern
District of Texas. Though this number slightly favors transfer, the District of Delaware has only
recently returned to full capacity with four sitting judges and the September statistic may reflect a
longer period than will exist moving forward. Nevertheless, because the above qualification is
speculative, and the Court is unaware of what factors may currently affect the Northern District of
Texas, the Court will rely upon the September 2018 statistics and find that the significantly similar
period of adjudication through trial favors neither party with respect to this factor.
10.

Local interest in deciding local controversies at home

This factor slightly favors transfer. Other than Plaintiffs selection of this district, the
controversy has no significant connection to Delaware. Plaintiff correctly asserts that "the local
interest factor is typically neutral in a case that asserts claims under Federal law as they raise
controversies that are more properly viewed as national, not local, in scope." (D .I. 13 at 18) (citing

Graphics Properties Holding Inc. v. Asus Computer Int'!, Inc., 964 F. Supp. 2 320, 330
(D. Del. 2013)). Method is a small, Texas company with fewer than ten employees, and is alleged
to have contracted with a distributor in Texas to sell a non-approved EEMT drug and has
contracted to list that drug on a database accessible in Texas and nationally. The Court finds that
Texas may have a local interest in adjudicating this case. Though the main cause of action arises

8

The September 2018 statistics for the District Courts of the United States can be found at:
https://www.uscourts.gov/sites/default/files/data_tables/fcms_na_distprofile0930.2018.pdf.
18

exclusively or even primarily" in the Northern District of Texas. See VLSI, 2018 WL 5342650 at
*7. Because, however, records have been identified as being available in the Northern District of
Texas, albeit not exclusively, and no records have been identified as available in this district, the
Court finds this factor to weigh slightly in favor of transfer to the Northern District of Texas.
7.

Enforceability of the judgment

Neither Plaintiff nor Defendants address any disparity between the enforceability of the
judgment between the District of Delaware and the Northern District of Texas in their papers and
thus the Court finds this factor to be neutral.
8.

Practical considerations

This factor favors transfer. The Court must consider "practical considerations that could
make the trial easy, expeditious, or inexpensive." Jumara, 55 F.3d at 879. Here, Defendants
argues that "the Northern District of Texas imposes no more of a burden for Plaintiff than litigating
in Delaware and is much less burdensome for defendants" who are in Texas, along with pertinent
witnesses and evidence related hereto. (D .I. 18-19). Plaintiff simply responds that "transportation
through and from the District of Delaware is convenient, inexpensive, and unburdensome."
(D.I. 13 at 18).

Though the Wilmington, Delaware area is serviced by the Philadelphia

International Airport and relatively accessible to the parties, the Court cannot avoid the reality that
trial in this district would require all parties, witnesses, experts, and evidence to be transported to
Delaware. In contrast, whereas Method and Mr. Tucker are located within the Northern District
of Texas, and significant evidence is also located therein, only Plaintiff will be required to travel
to litigate its case should it be transferred, which would be necessary regardless. The Court
concludes that trial in this matter would be easier and greatly less expensive if transferred to the
Northern District of Texas.

17

718, 732 (D. Del. 2012) (noting that this factor applies only insofar as "a witness actually will
refuse to testify absent a subpoena")). Moreover, "witnesses who are employed by a party carry
no weight," because "each party is able, indeed, obligated to procure the attendance of its own
employees for trial." Affymetrix, Inc. v. Synteni, Inc., 28 F. Supp. 2d 192, 203 (D. Del. 1998).
There is no dispute that Defendants' contacts with McKesson occurred solely in Texas and
the United Kingdom and "[non-party witnesses] involved in Method's efforts to allegedly
improperly 'solicit' EEMT 'sourcing contracts' are in Texas and the United Kingdom." (D.I. 12
at 17). Each of these locations is outside of the reach Rule 45 of the Federal Rule of Civil
Procedure. Moreover, the "Defendants' Unlawful Conduct" section of Plaintiffs Complaint
identifies entities with whom Defendants did business, including: Syntho Pharmaceuticals, Inc.
("Syntho"), McKesson, Medi-Span, and First Databank. That Plaintiff has identified these entities
in its Complaint means that individuals from each are presumably necessary for the proper
adjudication of this matter. 7
6.

Location of books and records

This factor slightly favors transfer. Jumara instructs the Court to give weight to the
location of books and records necessary to the case only "to the extent that the files [and other
evidence] could not be produced in the alternative forum." 55 F.3d at 879. Although Defendants
argue that "the bulk of the evidence is likely to come from Defendants," (D.I. 12 at 18), they have
not identified any evidence that could not be produced in this, or any, district. Nor have Defendants
provided any indication that any "documentary evidence relevant to this action is found

7

Neither party has provided information relating to the location of non-party witnesses from
Syntho, Medi-Span, or First DataBank and thus the Court cannot make a determination
about the convenience to potential witnesses from these entities or whether such witnesses
could be properly subpoenaed to appear at trial in Delaware.
16

(D. Del. 2017) (citing Memory Integrity, LLC v. Intel Corporation, C.A. No. 13-1804-GMS,
2015 WL 632026 at *4 (D. Del. Feb. 13, 2015) (internal quotations omitted). In MEC, the Court
found this factor weighed in favor of transfer where "the parties' physical locations are not
convenient to Delaware and [plaintiffs] litigation costs will likely remain the same because its
... employees must travel" regardless of transfer. Id. at 226. Here, neither entity has a principal
place of business in Delaware. Defendants are in the Northern District of Texas and Plaintiff is in
Minnesota, which is geographically closer to the Northern District of Texas than this district.
(D.I. 12, Exs. 4-6).
Plaintiffs only expressed convenience oflitigating in Delaware is that "ANI's executives
routinely travel to the region encompassing the Northeast Corridor." (D.I. 13 at 16). This has no
bearing on the Court's consideration of this factor. As for logistical and operations costs for trial,
Plaintiff will have to travel to litigate this case regardless of whether transfer is granted or denied,
and thus this subfactor is neutral with respect to ANI. The logistical and operational costs for
Method and its employees to travel to Delaware, however, would be more complicated and more
expensive than a trial occurring in the Northern District of Texas. Though it appears that Method
has fewer than ten employees, no information has been provided with respect to ANI and thus the
Court cannot determine the parties' relative ability to bear the costs associated with litigating this
case in Delaware as opposed to Texas. Nevertheless, for the same reasons articulated in MEC, the
Court finds that this factor favors transfer.
5.

Convenience of the witnesses

This factor slightly favors transfer. This factor carries weight "only to the extent that the
witnesses may actually be unavailable for trial in one of the fora." Jumara, 55 F.3d at 879; see also

VLSI, 2018 WL 5342650 at *7 (citing Smart Audio Techs., LLC v. Apple, Inc., 910 F. Supp. 2d

15

non-party witnesses are in the district, and evidence is in the district. (D .I. 12 at 16). Plaintiff does
not challenge that it is Defendants' preference to litigate in the Northern District of Texas.

3.

Whether the claim arose elsewhere

This factor favors transfer. Defendants argue that "to the extent Plaintiff has any claims at
all ... they arose outside of Delaware." (D.I. 12 at 16). Specifically, Defendants assert that the
"alleged 'acts' of 'false advertising' would have originated from Method's principal place of
business in the Northern District of Texas and any purported 'solicitation' ... of McKesson
occurred through communications with individuals located in Texas and abroad." (Id at 16).
Plaintiff does not counter Defendants' assertions 6 • On the record before the Court, it appears that
all the alleged violations occurred in relation to Defendants' actions or conversations with
individuals or entities either in Texas or abroad. As such, this factor weighs in favor of transfer to
the Northern District of Texas where Defendant's actions, and potential violations of the Lanham
Act, occurred.
4.

Convenience of the parties as indicated by their relative physical and
financial condition

This factor favors transfer. Determining convenience of the parties requires the Court to
consider "(l) the parties' physical location; (2) the associated logistical and operational costs to
the parties' employees in traveling to Delaware (as opposed to the proposed transferee district) for
litigation purposes; and (3) the relative ability of each party to bear these costs in light of its size
and financial wherewithal." MEC Resources, LLC v. Apple, Inc., 269 F. Supp. 3d 218, 225

6

In discussing jurisdiction, Plaintiff argues that Defendants' distribution contract with
McKesson and listing on national drug databases would bring its EEMT drug products into
Delaware. (D .I. 13 at 4-7). Plaintiff, however, has made no showing that any such products
have entered the market and the Court, on this record, cannot find that a claim has arisen
in Delaware.
14

Defendants nevertheless argue that Plaintiffs choice "should not be accorded deference"
because "Plaintiffs 'nerve center' and corporate operations are also located outside of Delaware,"
and Plaintiff has "no 'rational and legitimate reason' for bringing suit in Delaware." (D.I. 12 at
15). As another court in this district has found, however, it is "difficult to understand why the
plaintiffs forum choice in and of itself merits less weight when the plaintiff has no ties to the
selected forum or when the facts underlying the controversy occurred elsewhere." VLSI Tech.
LLC, v. Intel Corp., C.A. No. 18-966-CFC, 2018 WL 5342650 at *5-6 (D. Del. Oct. 29, 2018)
(concluding that the plaintiff, a company registered in Delaware, was entitled to "paramount
consideration" in its choice of forum). Indeed, "[n]either Shutte nor Jumara hold or even intimate
that a plaintiffs motive in selecting its forum choice is relevant for § 1404(a) purposes." VLSI
Tech, 2018 WL 5342650 at *2. The Court, thus, does not find that Plaintiffs motives or reasoning
for bringing this case in Delaware to be relevant to the inquiry of whether Plaintiffs forum
preference favors transfer.
The issue, here, however, relates to the parenthetical in Burroughs - "[a]ssuming
jurisdiction and proper venue." 392 F. Supp. at 763 n.4. The Court has found that it lacks personal
jurisdiction over at least one of the named Defendants. Thus, "jurisdiction and proper venue"
cannot be assumed as to both defendants. The Court finds that judicial economy favors the
prosecution of a case in its entirety, and that that weighs in favor of transferring the case to the
Northern District of Texas where there is no question of jurisdiction.
2.

Defendants' preference

This factor favors transfer. Defendants argue they "have a legitimate and rational reason
for preferring to litigate in the Northern District of Texas" because they are located the district,

13

Gehling v. St. George's Sch. ofMed, Ltd, 773 F.2d 539,544 (3d Cir. 1985) ("We have previously
held, however, that a district court lacking personal jurisdiction can transfer a case to a district in
which the case could have been brought originally." (citations omitted)).
2.

Personal Jurisdiction with respect to Method

After reviewing the papers, it appears that the question of personal jurisdiction over
Method presents a closer call. Having found, however, that the Court lacks jurisdiction over one
of the defendants, Tucker, in the interests of justice, and to avoid potential inequities from
bifurcating this case, the Court turns to whether it should exercise its discretion to transfer the case
to the United States District Court for the Northern District of Texas regardless of the existence of
its jurisdiction over Method. 5
B.

Motion to Transfer Pursuant to 28 U.S.C. § 1404(a)

The Court considers the private and public factors set forth in Jumara in connection with
its transfer inquiry.
1.

Plaintiffs forum preference

This factor normally does not favor transfer. "It is black letter law that a plaintiffs choice
of a proper forum is a paramount consideration in any determination of a transfer request," - one
that "should not be lightly disturbed." Shutte, 431 F.2d at 25 (internal quotations and citation
omitted). "Assuming jurisdiction and proper venue, weight is given to plaintiffs choice because
it is plaintiffs choice and a strong showing under the statutory criteria in favor of another forum
is then required as a prerequisite to transfer." Burroughs Wellcome Co. v. Giant Food, Inc.,
392 F. Supp. 761, 763 n.4 (D. Del. 1975).

5

To the extent Plaintiff requests transfer to District of Minnesota instead of the Northern
District of Texas, the Court finds Plaintiff has not made any showing that such a transfer
is warranted, especially in light of the personal jurisdiction issues relating to Tucker.
12

Similarly, in Brasure 's, this Court found no personal jurisdiction over the defendantcorporate employees, because "[a]ny contacts the individual defendants may have had with
Delaware occurred solely in connection with [the corporate defendant]."

Brasure 's,

2017 WL 3269082, at *4-5. Because the defendants "as individuals, ha[d] not engaged in any
conduct in Delaware," there was no basis for the Court's exercise of jurisdiction over them. Id. at
*5. Here, too, Plaintiffs Complaint is devoid of facts demonstrating that Tucker performed any
acts in Delaware, whether in his fiduciary capacity or otherwise. Thus, Plaintiffs claims against
Tucker must be dismissed. See id. at *4-5; Quantum Loyalty Sys., Inc. v. TPG Rewards, Inc. et
al., C.A. No. 09-22-SLR-MPT, 2009 WL 5184350, at *5 (D. Del. Dec. 23, 2009) (M.J., Thynge),

adopted as modified by 2010 WL 1337621 (D. Del. Mar. 31, 2010) (fiduciary shield doctrine
applied, where "[b]eyond mere conclusory statements, there is nothing to corroborate that Galinos
personally and knowingly sold or offered to sell any material part of an allegedly infringing
product in Delaware").
Moreover, a finding that the Court could assert personal jurisdiction over Tucker based on
the facts above would not comport with traditional notions of fair play and substantial justice. The
constitutional requirements of the Due Process Clause require minimum contacts such that a
defendant would have "fair warning" that suit might be brought against him in the district.
See Turner, 694 Fed. App'x at 65-66. Plaintiff fails to explain how Mr. Tucker's signature on a

distribution contract between his company and McKesson would provide the individual defendant
with fair warning that suit might be brought against him in his personal capacity in Delaware. For
these reasons, Plaintiff has failed to meet its burden of showing that personal jurisdiction is proper
over Mr. Tucker. Rather than dismiss the case against Mr. Tucker, however, the Court will
exercise its discretion to transfer the case to a forum where there is jurisdiction.

11

shield is raised, "all forum related contacts, including those taken in an employee's fiduciary
capacity, should be considered in determining whether to exercise personal jurisdiction over the
individual." Tristrata, 961 F. Supp. at 690.
Courts have recognized "an exception to the fiduciary shield doctrine where the
corporation is a mere shell for its owner" such that the "employee-owner's actions may be viewed
as having been taken on his own behalf and it would not be fair to allow the owner to hide behind
the fiduciary shield." Plummer, 533 A.2d at 1246. In its papers, Plaintiff argues that the fiduciary
shield doctrine does not apply to Tucker because he "directly designed, facilitated, and negotiated
a distribution contract with McKesson," "directed the listing of Method's EEMT product on drug
databases," "has a clear personal financial interest in the misconduct alleged" and "his actions
were for his own individual pecuniary interest." (Id. at 13-14). In its Complaint, Plaintiff alleged
that Tucker "directed, sanctioned, actively participated in, and voluntarily and intentionally
caused" Method's purported "unlawful conduct."

(D.I. 1 at

,r

42).

Plaintiffs conclusory

allegations, however, are insufficient to confer jurisdiction.
Plaintiff has failed to establish that Tucker took any acts as a fiduciary for Method in
Delaware. See Tristrata, 961 F. Supp. at 690 ("the employee's acts as a fiduciary must still occur
in Delaware"). In Tristrata, the Court was asked to find personal jurisdiction over an individual
defendant who was the president, 100% stockholder, and researcher for a company, and had
participated in the national advertisement of the company's products. Id. The Court found that it
lacked the authority to exert personal jurisdiction, noting that national advertising "is insufficient
to qualify as transacting business ... in Delaware ... unless it is shown that the advertising is part
of a 'sustained promotion campaign directed at Delaware,"' and his "position as president,
stockholder and researcher ... would be insufficient to establish jurisdiction." Id.

10

As to his role at Method, the fiduciary shield doctrine "prohibit[s] acts performed by an
individual in the individual's capacity as a corporate employee from serving as the basis for
personal jurisdiction over that individual." TriStrata Tech., Inc. v. Neoteric Cosmetics, Inc.,
961 F. Supp. 686, 690 (D. Del. 1997); Brasure 's, 2017 WL 3269082, at *4 (internal citation and
quotation marks omitted); Ruggiero v. FuturaGene, plc, 948 A.2d 1124, 1134 (Del. Ch. 2008)
("[A] corporate director or officer of a corporation cannot be haled into a Delaware court for an
act of the corporation simply because the officer or director has directed the corporation to take
that act.) It is an equitable doctrine that should be applied with a "sound exercise of discretion."
Plummer & Co. Realtors v. Crisafi, 533 A.2d 1242, 1246 (Del. Super. Ct. 1987).4 When fiduciary

Similarly, subsection (c)(1) applies when a defendant "[t]ransacts any business or performs
any character of work or service in the State," and subsection (c)(2) applies when a
defendant "[c]ontracts to supply services or things in this State." 10 Del. C. § 3104(c).
Both subsections require "that the cause of action arise from the defendant's conduct in the
forum state." Shoemaker, 556 F. Supp. 2d at 354-55. There is no evidence to contradict
Defendants' sworn statements that Defendant has not transacted business, performed work
or entered into any contracts to supply products in Delaware in his personal capacity.
4

Plaintiff argues in its papers that the Court may exert personal jurisdiction over the
individual defendant because "Mr. Tucker and Method are one and the same" and "[u]pon
information and belief, Defendant Tucker directed, sanctioned, actively participated, and
voluntarily and intentionally caused" the injury to Plaintiff. (D.I. 13 at 12-13). Though
this (in combination with citation to cases referring to "alter-ego" exceptions to the
fiduciary shield doctrine) suggests that the theory of alter ego should apply to Tucker,
Plaintiff makes no argument and offers no facts indicating that the business entity is merely
the alter ego of Mr. Tucker. To make a showing of alter ego, Plaintiff would have had to
have shown that "(1) that the corporation and its shareholders operated as a single
economic entity, and (2) that an overall element of injustice or unfairness is present."
Trevino v. Merscorp, Inc., 583 F. Supp. 521,528 (D. Del. 2008). The Third Circuit has set
out a seven-factor test for determining whether the corporation and its shareholders make
up a "single economic entity" including "(1) undercapitalization; (2) failure to observe
corporate formalities; (3) nonpayment of dividends; (4) the insolvency of the debtor
corporation at the time; (5) siphoning of the corporation's funds by the dominant
stockholder; (6) absence of corporate records; and (7) the fact that the corporation is merely
a facade for the operations of the dominant stockholder or stockholders." Id. at 528-29
(citing United States v. Pisani, 646 F.2d 83, 88 (3d. Cir.1981)). No showing - beyond
conclusory allegations - has been made with respect to any of these factors.
9

trial in one of the fora; and the location of books and records (similarly limited to
the extent that the files could not be produced in the alternative forum)."

Id at 879-80 (citations omitted). The public interests include:
"the enforceability of the judgment; practical considerations that could make the
trial easy, expeditious, or inexpensive; the relative administrative difficulty in the
two fora resulting from court congestion; the local interest in deciding local
controversies at home; the public policies of the fora; and the familiarity of the trial
judge with the applicable state law in diversity cases."

Id

Though the Jumara court notes that courts have "broad discretion to determine, on an

individualized, case-by-case, whether convenience and fairness considerations weigh in favor of
transfer," Id at 883, the Third Circuit has previously held that "unless the balance of convenience
of the parties is strongly in favor of [the] defendant, the plaintiff's choice of forum should prevail."

Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970).

III.

ANALYSIS
A.

Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(2)
1.

Personal Jurisdiction Over Matthew Scott Tucker

As noted above, Plaintiff's assertion of personal jurisdiction with respect to Tucker is that
"Mr. Tucker and Method are one and the same" and thus ''jurisdiction over Mr. Tucker is proper
for the reasons discussed with respect to Method." (D.I. 13 at 12-13). There does not appear to
be any dispute that, aside from Tucker's role and acts as the Founder and President of Method, the
Court cannot exercise jurisdiction over Mr. Tucker. 3

3

The Court agrees that there is no jurisdiction over Mr. Tucker in his personal capacity.
General jurisdiction under subsection (c)(4) requires that Tucker (a) regularly does or
solicits business in Delaware, (b) engages in any other persistent course of conduct in
Delaware, or (c) derives substantial revenue from services in Delaware. 10 Del. C.
§ 3104(c)(4). It requires a defendant to be "generally present in the state." Applied
Biosystems, 772 F. Supp. at 1469. Mr. Tucker has no connections with this district and has
never visited the state. (Tucker Deel. at ,r,r 4-9). There is no allegation of facts suggesting
"systematic and continuous" contacts between Tucker and Delaware
8

'fair warning' that he might be sued there - before a federal court in that forum can constitutionally
exercise personal jurisdiction over that defendant." Turner, 694 Fed. App'x at 65-66 (quoting
Kehm Oil Co. v. Texaco, Inc., 537 F.3d 290, 299-300 (3d Cir. 2008)). General jurisdiction over a
foreign entity only exists where that entity's "affiliations with the State are so 'continuous and
systematic' as to render them essentially at home in the forum state." Goodyear Dunlop Tires
Operations, S.A v. Brown, 564 U.S. 915, 919 (2011) (quoting International Shoe Co. v.
Washington, 326 U.S. 310, 317 (1945)).
B.

Motion to Transfer Pursuant to 28 U.S.C. § 1404(a)

District courts have the authority to transfer venue "[f]or the convenience of parties and
witnesses, in the interests of justice, ... to any other district or division where it might have been
brought." 28 U.S.C. § 1404(a). However, "[a] plaintiff, as the injured party, generally ha[s] been
'accorded [the] privilege of bringing an action where he chooses," Helicos Biosciences Corp. v.
lllumina, Inc., 858 F. Supp. 2d 367 (D. Del. 2012) (quoting Norwood v. Kirkpatrick, 349 U.S. 29,
31 (1955)), and this choice "should not be lightly disturbed," Jumara v. State Farm Ins. Co.,
55 F.3d 873, 879 (3d Cir.1995). The Third Circuit has recognized that:
"[i]n ruling on § 1404(a) motions, courts have not limited their consideration to
the three enumerated factors in§ 1404(a) (convenience of parties, convenience of
witnesses, or interests of justice), and, indeed, commentators have called on the
courts to "consider all relevant factors to determine whether on balance the
litigation would more conveniently proceed and the interests of justice be better
served by transfer to a different forum."
Id. (citation omitted). The Jumara court went on to describe twelve (12) "private and public
interests protected by the language of§ 1404(a). Id. The private right included:
"plaintiffs forum preference as manifested in the original choice; the defendant's
preference; whether the claim arose elsewhere; the convenience of the parties as
indicated by their relative physical and financial condition; the convenience of the
witnesses - but only to the extent that the witnesses may actually be unavailable for

7

there is a statutory basis for jurisdiction under the Delaware long-arm statute." Id. (citing 10 Del.
Code § 3104(c)). "Second, because the exercise of jurisdiction must also comport with the Due
Process Clause of the United States Constitution, the Court must determine if an exercise of.
jurisdiction violates [defendants'] constitutional right to due process." Id. (citing International

Shoe Co. v. Washington, 326 U.S. 310 (1945)); see also IMO Industries, Inc. v. Kiekert AG,
155 F.3d 254, 259 (3d Cir. 1998).
Delaware's long arm statute, 10 Del. C. § 3104, provides in pertinent part:
(c) As to a cause of action brought by any person arising from any of the acts
enumerated in this section, a court may exercise personal jurisdiction over any
nonresident, or a personal representative, who in person or through an agent:
(1) Transacts any business or performs any character of work or
service in the State;
(2) Contracts to supply services or things in this State;

[...]
(4) Causes tortious injury in the State or outside of the State by an
act or omission outside the State if the person regularly does or
solicits business, engages in any other persistent course of
conduct in the State or derives substantial revenue from services,
or things used or consumed in the State.
Subsections (c)(1) and (c)(2) provide for specific jurisdiction where the cause of action
arises from the defendant's contacts with the forum. Shoemaker v. McConnell, 556 F. Supp. 2d
351, 354-55 (D. Del. 2008). "Subsection (c)(4) provides for general jurisdiction, which requires a
greater extent of contacts, but which provides jurisdiction even when the claim is unrelated to the
forum contacts."

Applied Biosystems, Inc. v. Cruachem, Ltd., 772 F. Supp. 1458, 1466

(D. Del. 1991) (citing LaNuova D & B, S.p.A. v. Bowe Co., 513 A.2d 764, 768 (Del. 1986)).
As for the second prong, the Due Process Clause "requires that a non-resident defendant
have certain minimum contacts with a forum state - contacts that would provide the defendant

6

II.

LEGAL STANDARDS
A.

Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(2)

Pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, the Court may dismiss
a suit for lack of jurisdiction over a person. When a defendant challenges a court's exercise of
personal jurisdiction under Rule 12(b)(2), "the plaintiff bears the burden of establishing personal
jurisdiction by a preponderance of the evidence and must do so by 'establishing with reasonable
particularity sufficient contacts between the defendant and the forum state."' Turner v. Prince

Georges County Public Schools, 694 Fed. App'x 64, 66 (3d Cir. 2017) (quoting Mellon Bank
(East) PSFS, Nat'! Ass 'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992)). "To meet this burden,
the plaintiff must produce 'sworn affidavits or other competent evidence,' since a Rule 12(b)(2)
motion 'requires resolution of factual issues outside of the pleadings."' Brasure 's Pest Control,

Inc. v. Air Cleaning Equip., Inc., C.A. No. 17-323-RGA-MPT, 2018 WL 337747, at *1 (D. Del.
Jan. 9, 2018) (quoting Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 67 n.9
(3d Cir. 1984)). "[W]hen the court does not hold an evidentiary hearing on the motion to dismiss,
[however], the plaintiff need only establish a prima facie case of personal jurisdiction and the
plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor."

Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004) (citing Pinker v. Roche Holdings,
Ltd., 292 F.3d 361 (3d Cir. 2002)).
Two requirements, one statutory and one constitutional, must be satisfied for personal
jurisdiction to exist over a defendant. Bell Helicopter Textron, Inc. v. C & C Helicopter Sales,

Inc., 295 F. Supp. 2d 400, 403 (D. Del. 2002). "First, a federal district court may assert personal
jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the
law of that state." Id. (citing Fed. R. Civ. P. 4(e)). The Court must, therefore, "determine whether

5

Method also admits that is has listed its EEMT product in the national
pharmaceutical databases Medi-Span and First Databank.... These databases have
nationwide reach and are an essential advertising tool for drug products. Method
promotes its EEMT drug products in those databases so that Delaware pharmacists
will order its EEMT drug products, and Delaware insurance companies will list its
EEMT drug products in formularies for reimbursement. ... Method's nationwide
advertising of its EEMT drug products in the drug databases along with its
distribution contract with McKesson ensures that its EEMT drug products will be
dispensed in Delaware and creates personal jurisdiction in Delaware over
Defendants Method and Tucker.
(D.I. 13 at 1-2 (internal citations omitted)).

Plaintiff adds that Method is also a

pharmaceutical vendor for the Minnesota Multistate Contracting Alliance for Pharmacy
("MMCAP") purchasing collective for pharmaceutical products which Delaware has
contracted to be a part of. (Id at 1, 8).
With respect to Mr. Tucker, Plaintiff asserts that "Mr. Tucker and Method are one and the
same."2 (D.I. 13 at 12).
Mr. Tucker is the Founder and President of Method, and he does not indicate that
anyone else has any ownership interest in the company .... As such, Mr. Tucker
has a clear personal financial interest in the misconduct alleged in the Complaint.
The fiduciary shield doctrine does not apply to Mr. Tucker because he was not
merely acting at the direction of Method. As Method's owner and President, his
actions were for his own individual pecuniary interest. He acted at his own behest,
not that of a supervisor, which is the type of situation in which the fiduciary shield
doctrine is typically invoked. As Method's owner and President, Mr. Tucker
directly designed, facilitated, and negotiated a distribution contract with
McKesson. Further, he directed the listing of Method's EEMT product on drug
databases.

(Id at 12-13).

2

In its brief, Plaintiff requested permission to obtain jurisdictional discovery. (D.I. 13 at 11,
n.5). The Court notes that a case management order allowing discovery to occur was
entered on April 24, 2108 (D.I. 21), but Plaintiff did not provide any additional facts to
support its jurisdictional claims in response to the request from the Court. (D.I. 46).
4

Services ("ClarusOne"), for the supply of certain estrogens-methyltestosterone
("EEMT") pharmaceutical drug product. McKesson subsequently awarded the bid
to Method. On August 9, 2017, McKesson sent the subject contract to Method for
acceptance by email from McKesson's Irving, Texas offices. None of the EEMT
product Method shipped to McKesson pursuant to this contract was delivered by
Method to McKesson in Delaware.
9.
The communications between Method and McKesson relating to this bid
award involved, other than Method employees, individuals located in Irving, Texas
and London, United Kingdom. These non-party individuals include Cristi
Mahoney and Nicholas Richardson located in Irving, and Elme Albertse located in
London. None of these communications involved individuals located in Delaware,
and none of these communications occurred in Delaware.
Moreover, while Method listed its EEMT drug on national pharmaceutical databases including Medi-Span and First DataBank Method asserts that "[p]harmaceuticals cannot be
purchased from, or sold by Method through these listing databases and entities and persons cannot
directly contact Method through these databases." (Id. at ,r,r 10-12).
The Tucker Declaration attests that Mr. Tucker resides in Ft. Worth, Texas. (D.I. 12, Ex.
Bat ,r 3). He has never resided, been employed, transacted business, paid taxes, held bank accounts
or assets, owned or leased property, or commenced litigation in Delaware. (Id. at

,r,r 4-8).

He

states that he has "never traveled to the State of Delaware." (Id. at ,r 9).
Plaintiff responds that "Method's sales activities establish personal jurisdiction pursuant to
10 Del. C. § 3104(c)(l), (2), and (4)," because Method
entered into a distribution contract with McKesson Corporation ("McKesson"), a
Delaware corporation, that distributes pharmaceuticals at a retail sale level
throughout this District, and throughout the United States. . . . McKesson is the
largest distributor of pharmaceutical drugs and medical devices in the United
States, and it ranks 5th on the Fortune 500 ranking of America's largest
corporations, with revenues in excess of $190 billion.... Method admits that it has
no control over where McKesson distributes its products .... Method is fully aware
that McKesson, the largest drug distributor in the United States, distributes drug
products nationwide through Walmart and Rite Aid pharmacies. Method
understands that McKesson's nationwide distribution includes the state of
Delaware, and makes no allegation that its contract with McKesson excludes its
products from the Delaware market.

3

mentioned unlawful conduct by the corporate Defendants." (Id. at ,r 42). Based upon these actions,
Plaintiff alleges that "Defendants have caused harm to Plaintiff in this District." (Id. at ,r 11).
In the present motion, Defendants argue that they "have no connection with Delaware" and
thus "lack sufficient 'minimum contacts' with this district to permit the exercise of specific or
general jurisdiction." (D.I. 12 at 2). In support of this, Defendants have submitted two declarations
from Tucker, one on behalf of Method Pharmaceuticals, LLC ("Method Declaration"), (D.I. 12,
Ex. A), and one on behalf of Tucker, himself ("Tucker Declaration"). (D.I. 12, Ex. B). The
Method Declaration attests that Tucker is the President of Method "a Texas limited liability
company, whose sole member is Matthew Scott Tucker" and whose "corporate headquarters are
located at 7333 Jack Newell Blvd. N., Suite 300, Fort Worth, Texas 76118." (Id. at ,r,r 2-4). The
Method Declaration states the following with respect to Method (D.I. 12, Ex. A at ,r,r 5-7):
5.
Method is a small company, having less than 10 employees. All of
Method's employees reside in or, if they reside elsewhere, are employed out of
Texas. None of Method's employees reside in Delaware, travel to Delaware for
work, or otherwise perform any of their job duties in Delaware. Method also does
not have any representatives or agents in the State of Delaware, including any
registered agents.
6.
Method does not own or lease any offices or other facilities in Delaware,
does not have a Delaware telephone number or mailing address, does not have any
bank accounts in Delaware, does not hold assets of any other kind in Delaware, is
not licensed to do business in Delaware, has never paid any taxes of any kind to the
State of Delaware, and has never commenced any litigation in Delaware.
7.
Method does not solicit business in Delaware, does not advertise or market
in Delaware, has never directly shipped any pharmaceutical product to Delaware,
and does not derive substantial revenue from Delaware.
Regarding McKesson, the Method Declaration avers that "Method is not affiliated with
McKesson in any capacity and the two companies are entirely independent of one another." (Id. at

,r 10).

It explains (id. at ,r,r 8-9):
8.
On July 25, 2017, Method sent a bid to McKesson Corporation
("McKesson"), through McKesson's sourcing joint-venture ClarusOne Sourcing

2