Landry v. Watson Pharmaceuticals, Inc.

Filing 38

ORDER GRANTING WATSON PHARMACEUTICAL INC.'S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT FOR LACK OF JURISDICTION 15 . excerpt of order: ~ "Although the Court has granted WPI's Motion, th e Court has not reached the merits of the First Amended Complaint and does not here resolve whether Plaintiff has meritorious claims against WPI. The First Amended Complaint is therefore DISMISSED WITHOUT PREJUDICE; Plaintiff may either amend his Fir st Amended Complaint in this Court alleging facts sufficient to establish personal jurisdiction over WPI or may refile in another court of competent jurisdiction." ~ Signed by JUDGE DAVID ALAN EZRA on 8/9/2011. [Order follows hearin g held 8/5/2011 on Motion to Dismiss, doc (15). Minutes of Hearing: doc no. 37 ] (afc) CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
EUGENE LANDRY,
Plaintiff,
vs.
WATSON PHARMACEUTICALS,
INC., a Nevada corporation,
WATSON LABORATORIES, INC.,
a Nevada corporation, and WATSON
PHARMA, Inc., a Delaware
corporation,
Defendants.
_____________________________

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CV. NO. 11-00097 DAE-KSC

ORDER GRANTING WATSON PHARMACEUTICAL INC.’S
MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT
FOR LACK OF JURISDICTION
On August 5, 2011, the Court heard Watson Pharmaceutical Inc.’s
(“WPI”) Motion to Dismiss Plaintiff’s First Amended Complaint for Lack of
Jurisdiction (“Motion”). Charles H. Brower, Esq., appeared on behalf of Plaintiff
Eugene Landry (“Plaintiff”); Thomas Benedict, Esq., appeared on behalf
Defendant. After reviewing the motions and the supporting and opposing
memoranda, the Court GRANTS Defendant WPI’s Motion to Dismiss (Doc. # 15).

BACKGROUND
The instant action stems out of a lower back injury suffered by
Plaintiff on March 10, 2008. (“FAC,” Doc. # 12, ¶¶ 6–7.) Plaintiff alleges his
physician prescribed him Fentanyl Transdermal (“FT”) patches to relieve pain in
his lower back. (Id. ¶ 7.) Plaintiff claims that the FT patches “were manufactured,
sold, shipped, and distributed by” Defendant WPI, Defendant Watson
Laboratories, and Defendant Watson Pharma (collectively “Defendants”).
(Id. ¶ 8.) According to Plaintiff, Defendants subsequently recalled the FT patches
sold in the United States as some were leaking fetanyl gel. (Id. ¶ 9.) Plaintiff
claims that he “used patches manufactured, sold, shipped, and distributed by
Defendants which were leaking fentanyl gel.” (Id.) The leaking gel allegedly
caused injury to Plaintiff. (Id. ¶¶ 10–11.) Plaintiffs seek to recover from
Defendants in Negligence, Strict Products Liability, and Breach of Warranty. (Id.
¶¶ 12–28.)
Plaintiff alleges this Court has jurisdiction by virtue of diversity of
citizenship. (Id. at 2.) Plaintiff is a resident of the State of Hawaii, (id. ¶ 1), while
WPI is a Nevada Corporation with its principal place of business located in
California. (Id. ¶ 2; “Kaufhold Decl.,” Doc. # 15-2, ¶ 3.)

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On February 2, 2011, Plaintiff filed a complaint. (See Doc. # 1.) On
April 15, 2011, WPI filed a Motion to Dismiss for Lack of Jurisdiction. (Doc. # 6.)
In response, Plaintiff filed his First Amended Complaint. (Doc. # 12.) On May 19,
2011, WPI made a special appearance “solely for the purpose of moving this Court
for an order dismissing plaintiff’s claim against it” and filed the instant Motion.
(Mot. at 1.) WPI again claims that Plaintiff has failed to demonstrate this Court
has jurisdiction to hear Plaintiff’s claims against it. (Id.) On July 22, 2011,
Plaintiff filed an Opposition. (“Opp’n,” Doc. # 34.) On July 29, 2011, WPI filed
its Reply. (“Reply,” Doc. # 35.)
STANDARD OF REVIEW
Pursuant to Federal Rule of Civil Procedure 12(b)(2), a defendant may
move to dismiss a complaint for lack of personal jurisdiction. A plaintiff has the
burden of establishing jurisdiction over a nonresident defendant. Schwarzenegger
v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004); Ziegler v. Indian
River County, 64 F.3d 470, 473 (9th Cir. 1995). When, as here, a district court
acts on a defendant’s motion to dismiss without holding an evidentiary hearing, the
plaintiff need only make a prima facie showing of jurisdictional facts to withstand
the motion to dismiss. Schwarzenegger, 374 F.3d at 800; Ziegler, 64 F.3d at 473.

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In determining whether a plaintiff has made a prima facie showing of
jurisdictional facts, the court must accept uncontroverted allegations in the
complaint as true. Dole Food Co. v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002).
If the defendant presents evidence to contradict the allegations in the complaint,
the plaintiff must go beyond the pleadings and present affirmative proof of
personal jurisdiction through affidavits and declarations. See id. Conflicts
between the parties’ affidavits and other discovery materials must be resolved in
favor of the plaintiff. Id.
DISCUSSION
I.

General and Specific Jurisdiction
In order to exercise personal jurisdiction over a nonresident defendant,

the Court must consider whether: (1) the forum state has an applicable long-arm
statute that confers jurisdiction over nonresidents; and (2) the assertion of personal
jurisdiction comports with the constitutional requirements of due process. Miracle
v. N.Y.P. Holdings, Inc., 87 F. Supp. 2d 1060, 1064 (D. Haw. 2000); Complaint of
Damodar Bulk Carriers, Ltd., 903 F.2d 675, 678 (9th Cir. 1990). Hawaii’s
long-arm statute provides that a defendant is subject to the jurisdiction of its courts
if a plaintiff’s cause of action arises from one of the following acts:

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(1) The transaction of any business within this State;
(2) The commission of a tortious act within this State;
(3) The ownership, use, or possession of any real estate situated in this
State;
(4) Contracting to insure any person, property, or risk located within
this State at the time of contracting.
Haw. Rev. Stat. § 634-35(a). The statute was designed to extend jurisdiction to the
maximum extent permitted by the Due Process Clause of the Fourteenth
Amendment of the United States Constitution. Cowan v. First Ins. Co. of Haw.,
608 P.2d 394, 399 (Haw. 1980); see also Jenkins v. Whittaker Corp., 785 F.2d 720,
723 (9th Cir. 1986) (“Hawaii law gives jurisdiction to the full extent allowed by
the Constitution.”) Therefore, the jurisdictional analyses under state law and
federal due process are the same. Complaint of Damodar Bulk Carriers, 903 F.2d
at 679.
For the Court to exercise personal jurisdiction over a nonresident
defendant, the defendant must have “minimum contacts” with the forum state such
that the exercise of jurisdiction “does not offend traditional notions of fair play and
substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
(internal quotations and citation omitted); Schwarzenegger, 374 F.3d at 801. The
defendant’s conduct must have been such that he should reasonably anticipate

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being haled into court in Hawaii. See Harris Rutsky & Co. Ins. Servs., Inc., 328
F.3d 1122, 1130 (9th Cir. 2003).
Two forms of personal jurisdiction exist, general and specific. Dole
Food, 303 F.3d at 1111. For general jurisdiction to exist,
the defendant must engage in “continuous and systematic
general business contacts,” . . . that “approximate
physical presence” in the forum state. This is an exacting
standard, as it should be, because a finding of general
jurisdiction permits a defendant to be haled into court in
the forum state to answer for any of its activities
anywhere in the world.
Schwarzenegger, 374 F.3d at 801 (quoting Helicopteros Nacionales de Colombia
S.A. v. Hall, 466 U.S. 408, 416 (1984)). “Factors to be taken into consideration
are whether the defendant makes sales, solicits or engages in business in the state,
serves the state’s markets, designates an agent for service of process, holds a
license, or is incorporated there.” Bancroft & Masters, Inc. v. Augusta Nat’l Inc.,
223 F.3d 1082, 1086 (9th Cir. 2000) overruled in part on other grounds by Yahoo!
Inc. v. La Ligue Contre Le Racisme Et L’Antisemitisme, 433 F.3d 1199 (9th Cir.
2006) (en banc); see also Altman v. Republic of Austria, 317 F.3d 954 (9th Cir.
2002) (same). The assertion of general jurisdiction must always be reasonable.
Amoco Egypt Oil Co. v. Leonis Navigation Co., 1 F.3d 848, 852–53 (9th Cir.
1993). The Ninth Circuit has set a high standard for general jurisdiction. See
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Yahoo! Inc., 433 F.3d at 1205 (9th Cir. 2006); see also Schwarzenegger, 374 F.3d
at 801 (“This is an exacting standard, as it should be, because a finding of general
jurisdiction permits a defendant to be haled into court in the forum state to answer
for any of its activities anywhere in the world.”). “Put another way, a defendant
must not only step through the door, it must also sit down and make itself at
home.” Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1169 (9th Cir.
2006).
Where a person does not have sufficient contacts to support general
jurisdiction, a court may still exercise specific personal jurisdiction over the person
if the following requirements are met:
(1) the non-resident defendant must purposefully direct his activities
or consummate some transaction with the forum or resident thereof; or
perform some act by which he purposefully avails himself of the
privileges of conducting activities in the forum, thereby invoking the
benefits and protections of its laws;
(2) the claim must be one which arises out of or relates to the
defendant’s forum-related activities; and
(3) the exercise of jurisdiction must comport with fair play and
substantial justice, i.e. it must be reasonable.
Harris Rutsky, 328 F.3d at 1129 (citation omitted).
WPI submits a declaration as evidence to contradict Plaintiff’s
allegation that this Court has personal jurisdiction over Defendant. (See Kaufhold
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Decl.) Therefore, Plaintiff must go beyond the pleadings and present affirmative
proof of personal jurisdiction. Dole Food Co., at 1108. For the reasons discussed
below, this Court finds that Plaintiff has not carried his burden with respect to
either general or specific jurisdiction over Defendant.1
WPI’s declaration asserts as follows:
•

WPI has never manufactured nor distributed FT patch products.

•

WPI has never been registered to do business in Hawaii and has
never been required to designate and has not designated an
agent for service of process in Hawaii.

•

WPI has never transacted business in Hawaii.

•

WPI has never maintained an office or business facility in
Hawaii.

•

WPI has never had any employees or agents in Hawaii.

•

WPI has never owned, leased, or possessed any real or personal
property in Hawaii.

•

WPI has never paid taxes in Hawaii.

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The Court declines to convert Defendant’s motion to dismiss into a motion
for summary judgment. A party may submit evidence outside the pleadings when
moving to dismiss for lack of personal jurisdiction. See Dole Food Co., 303 F.3d
at 1108.
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•

WPI has never advertised or promoted FT patch products in
Hawaii.

•

WPI has never manufactured, sold, shipped or distributed FT
patch products in or to Hawaii.

•

WPI has never entered into any contract to manufacture sell,
ship or distribute FT patch products in Hawaii or supply any
services in Hawaii.

•

WPI is a holding company that is the direct or indirect parent
company of a number of subsidiary companies but is separate
and distinct from any of its subsidiaries.

(Id. ¶ 4–11.) WPI’s declaration makes clear that there is no contact between WPI
and the State of Hawaii.
In response, Plaintiff attached to his four-page Opposition the
following seven exhibits:
•

A document which suggests WPI describes itself to the SEC as
a leading global pharmaceutical company involved in
manufacturing, marketing, sales, and distribution of generic
brand pharmaceutical products.

•

A document which states that a FT patch is a WPI product.
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•

A press release in which WPI announced it received approval
from the United States Food and Drug Administration for a
fentanyl transdermal system for the treatment of chronic pain.

•

Two press releases announcing a recall of FT patches because
they were leaking gel. One of the press releases states that the
patches recalled were manufactured by Defendant Watson
Laboratories, Inc., and distributed by Defendant Watson
Pharma, Inc.

•

Correspondences with Plaintiff and Plaintiffs’ attorney
regarding Plaintiff’s claims about the FT patch.

(See Docs. ## 21-1; 22-2; 22-3; 22-4; 22-5; 22-6; 22-7; 22-8.) None of these
documents, however, establish any relationship between WPI and Hawaii. Further,
none of these documents establish that WPI purposefully availed itself of the
benefits and protections of Hawaii. Indeed, at least one of Plaintiff’s documents
makes clear that WPI owns no property in Hawaii, bolstering WPI’s position. (See
Doc. # 21-1.). Plaintiff has not submitted one scintilla of evidence which
contradicts or disputes any claim in WPI’s declaration.
In light of WPI’s declaration, as well as Plaintiff’s failure to rebut it,
determining that this Court has no jurisdiction over Plaintiff’s claims against WPI
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is academic. As discussed, with respect to general jurisdiction a defendant “must
engage in continuous and systematic general business contacts . . . that
approximate physical presence in the forum state.” Schwarzenegger, 374 F.3d at
801. WPI’s declaration makes clear, however, that WPI has no contact with
Hawaii, much less “continuous and systematic” contact. None of the
documentation provided to the Court by Plaintiff suggests anything to the contrary.
The Court therefore plainly cannot conclude that Plaintiff has satisfied the
“exacting standard” required to demonstrate the Court has general jurisdiction over
WPI. Id.
Plaintiff has also failed to demonstrate that the Court has specific
jurisdiction over Defendant. First, Plaintiff has proffered no evidence that WPI
directs any activity toward the State of Hawaii, while WPI has made clear in its
Declaration that it directs no conduct toward Hawaii. Plaintiff has therefore failed
to satisfy the first requirement for demonstrating the Court has specific jurisdiction
over WPI. See Harris Rutsky, 328 F.3d at 1129 (holding a plaintiff must
demonstrate a defendant avails itself of the benefits of the state for specific
jurisdiction). Moreover, even if WPI somehow did avail itself of the “benefits and
protections” of the State of Hawaii through some contact with the state, there is a
complete dearth of evidence suggesting that Plaintiff’s claims arise from any such
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contact. See id. Indeed, WPI’s declaration again makes clear that this is not the
case. Plaintiff has failed, therefore, to demonstrate that this Court has specific
jurisdiction over WPI.
To the extent that Plaintiff attempts to assert jurisdiction over WPI
through its subsidiaries, the Court remains unpersuaded. (See Opp’n at 4.) First,
Plaintiff’s evidence only demonstrates that Defendant Watson Laboratories, Inc.
and Defendant Watson Pharma, Inc. produced and manufactured FT patches, not
that either subsidiary2 had “minimum contacts” with the State of Hawaii. (See
Doc. # 5.) Moreover, the Ninth Circuit has stated that “the existence of a
relationship between a parent company and its subsidiaries is not sufficient to
establish personal jurisdiction over the parent on the basis of the subsidiaries’
minimum contacts with the forum.” Doe v. Unocal Corp., 248 F.3d 915, 925 (9th
Cir. 2001); see also United States v. Bennet, 621 F.3d 1131, 1138 (9th Cir. 2010)
(“[T]he fact that the parent indirectly owns or holds the stock of the subsidiaries
does not, without more, convert these two corporations into general agents for the
parent for jurisdictional purposes.” (quotations, modifications and citations

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In actuality, Plaintiff presents no evidence which suggests that either of
these corporations is a subsidiary of WPI. Plaintiff merely notes that both
corporations are “presumably two of its subsidiaries.” (Opp’n at 4.)
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omitted)). Thus, the Court cannot conclude that Plaintiff has established
jurisdiction over WPI by virtue of either of its subsidiaries’ contacts with Hawaii.
Accordingly, the Court GRANTS WPI’s Motion.
II.

Dismissal without Prejudice
Pursuant to Rule 15(a)(2), courts should “freely give leave [to amend]

when justice so requires.” Further, “requests for leave should be granted with
extreme liberality.” Moss v. U.S. Secret Service, 572 F.3d 962, 792 (9th Cir.
2009). “Dismissal without leave to amend is improper unless it is clear . . . that the
complaint could not be saved by an amendment.” Id. Although the Court has
granted WPI’s Motion, the Court has not reached the merits of the First Amended
Complaint and does not here resolve whether Plaintiff has meritorious claims
against WPI. The First Amended Complaint is therefore DISMISSED
WITHOUT PREJUDICE; Plaintiff may either amend his First Amended
Complaint in this Court alleging facts sufficient to establish personal jurisdiction
over WPI or may refile in another court of competent jurisdiction.

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CONCLUSION
For the reasons stated above, the Court GRANTS Defendant WPI’s
Motion to Dismiss (Doc. # 15).
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, August 9, 2011.

_____________________________
David Alan Ezra
United States District Judge

Landry v. Watson Pharmaceuticals, Inc, et al., Cv. No. 11-00097 DAE-KSC;
ORDER GRANTING WATSON PHARMACEUTICAL INC.’S MOTION TO
DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT FOR LACK OF
JURISDICTION

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