ELI LILLY AND COMPANY et al v. NANG KUANG PHARMACEUTICAL CO., LTD. et al

Filing 54

ENTRY ON MOTION FOR JURISDICTIONAL DISCOVERY - The Court finds that there is already sufficient evidence in the record for Plaintiffs to respond to the motion to dismiss, as Plaintiffs are already in possession of Defendants' ANDA. The additi onal discovery requested by Plaintiffs would essentially amount to a fishing expedition into issues unrelated to the question of whether the Court has personal jurisdiction over Nang Kuang and CANDA. Plaintiff's Motion for Jurisdictional Disco very and to Stay Defendants' Motion to Dismiss (Filing No. 33 ) is therefore DENIED.1 Plaintiffs shall have fourteen (14) days from the date of this Entry to file their response to Defendants' motion to dismiss, and Defendants' reply brief shall be due within seven (7) days after service of Plaintiffs' response brief. **SEE ENTRY**. Signed by Judge Tanya Walton Pratt on 6/15/2015. (MGG)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
ELI LILLY AND COMPANY, and
THE TRUSTEES OF PRINCETON
UNIVERSITY,
Plaintiffs,
v.
NANG KUANG PHARMACEUTICAL CO.,
LTD., and CANDA NX-2, LLC,
Defendants.

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Case No. 1:14-cv-01647-TWP-DKL

ENTRY ON MOTION FOR JURISDICTIONAL DISCOVERY
This matter is before the Court on a motion filed by Plaintiffs Eli Lilly and Company
(“Lilly”) and the Trustees of Princeton University (collectively, “Plaintiffs”), for Jurisdictional
Discovery and to Stay Defendants’ Motion to Dismiss (Filing No. 33). Defendants Nang Kuang
Pharmaceutical Co., Ltd. (“Nang Kuang”) and CANDA NX-2, LLC (“CANDA”) (collectively,
“Defendants”), filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2), asserting
that this action should be dismissed because the Court lacks personal jurisdiction over the
Defendants. In response, Plaintiffs filed the instant motion requesting leave to conduct discovery
to respond to Defendants’ motion and to stay the motion to dismiss. Plaintiffs seek additional
factual information relating to both the Court’s general and specific personal jurisdiction over
Defendants, including (1) Defendants’ contacts with Indiana, including contacts that will exist
upon approval of the Abbreviated New Drug Application (“ANDA”); (2) Nang Kuang’s alleged
contacts with Texas, which Nang Kuang claims defeats jurisdiction under Federal Rule of Civil
Procedure 4(k)(2); and (3) the relationship between Nang Kuang and CANDA, which Plaintiffs

claim bears on Defendants’ argument that CANDA is an indispensable party without which this
suit cannot proceed.
“Jurisdictional ‘discovery is appropriate where the existing record is inadequate to support
personal jurisdiction and a party demonstrates that it can supplement its jurisdictional allegations
through discovery.’” LG Electronics, Inc. v. Quanta Computer Inc., 520 F. Supp. 2d 1061, 1072
(W.D. Wis. 2007) (quoting Trintec Industries, Inc. v. Pedre Promotional Products, Inc., 395 F.3d
1275, 1283 (Fed. Cir. 2005)) (additional quotations omitted). It is within the Court’s discretion to
permit jurisdictional discovery. Ticketreserve, Inc. v. viagogo, Inc., 656 F. Supp. 2d 775, 782
(N.D. Ill. 2009) (citing Cent. States, Se. and Sw. Areas Pension Fund v. Reimer Express World
Corp., 230 F.3d 934, 946 (7th Cir. 2000)). “Generally, courts grant jurisdictional discovery if the
plaintiff can show that the factual record is at least ambiguous or unclear on the jurisdiction issue.”
Id.
Plaintiffs have not demonstrated that the factual record is ambiguous or unclear on the issue
of jurisdiction, and the Court finds there is sufficient evidence in the record for the Plaintiffs to
make out a prima facie case of personal jurisdiction without the need for additional discovery.
Plaintiffs request discovery bearing on the issue of whether this Court has general jurisdiction over
Defendants by virtue of their contacts with Indiana, requesting not only information about their
past and current conduct, but future conduct as well. Discovery of this information is not warranted
for two reasons. First, “[p]ersonal jurisdiction cannot be based on future contacts, even if such
contacts are allegedly ‘inevitable.’” Sys. Software Assocs., Inc. v. Trapp, No. 95 C 3874, 1995
WL 506058, at *6 (N.D. Ill. Aug. 18, 1995). The cases cited by Plaintiffs regarding the Court’s
inquiry into future conduct relate to the issue of infringement, not the issue of personal jurisdiction.
See Sunovion Pharm., Inc. v. Teva Pharm. USA, Inc., 731 F.3d 1271, 1280 (Fed. Cir. 2013)

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(“[W]hen a drug manufacturer seeks FDA approval to market a generic compound within the scope
of a valid patent, it is an infringement as a matter of law.”) (emphasis added). Plaintiffs cannot
address the issue of infringement until they clear the personal jurisdiction hurdle, and activities
that have not yet occurred cannot form the basis for general personal jurisdiction. Thus, inquiry
into Defendants’ intended conduct following the presumed approval of the ANDA is not relevant
to the question of whether the Court currently has general jurisdiction over Defendants.
Second, an analysis of Defendants’ anticipated future conduct is not necessary in order for
the Plaintiffs to address Defendants’ specific jurisdiction arguments.

Plaintiffs need only

demonstrate that the Court has either general or specific personal jurisdiction, not both. Specific
jurisdiction arises where the cause of action arises out of or relates to a defendant’s purposefully
established contacts with the forum state. Helicopteros Nacionales de Columbia, S.A. v. Hall, 466
U.S. 408, 414 (1984). Historically in ANDA litigation, “general jurisdiction . . . provided the basis
to assert jurisdiction over generic drug company defendants.” Eli Lilly & Co. v. Mylan Pharm.,
Inc., No. 1:14-CV-00389-SEB-TA, 2015 WL 1125032, at *5 (S.D. Ind. Mar. 12, 2015) (quoting
AstraZeneca AB v. Mylan Pharm., Inc., No. CV 14-696-GMS, 2014 WL 5778016, at *6 (D. Del.
Nov. 5, 2014) motion to certify appeal granted sub nom. Astrazeneca AB v. Aurobindo Pharma
Ltd., No. CV 14-664-GMS, 2014 WL 7533913 (D. Del. Dec. 17, 2014)). Courts focused on the
defendants’ regular business solicitation and distribution of substantial quantities of
pharmaceuticals in the forum, as well as substantial revenues from those sales. See Eli Lilly and
Co. v. Mayne Pharma (USA) Inc., 504 F. Supp. 2d 387 (S.D. Ind. 2007). However, the Supreme
Court’s decision in Daimler AG v. Bauman, 134 S.Ct. 746, 761 (2014), altered the analysis with
respect to general jurisdiction and held that the defendant’s “affiliations with the State [must be]
so ‘continuous and systematic’ as to render [it] essentially at home in the forum state” and clarified

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that in all but “exceptional cases” a corporation is “at home” only in its place of incorporation and
principal place of business. 134 S.Ct. at 761 (quoting Goodyear Dunlop Tires Operations, S.A. v.
Brown, 131 S.Ct. 2846, 2851 (2011)). The Daimler decision rendered the factors on which courts
have traditionally focused in ANDA cases insufficient, without more, to support an exercise of
general jurisdiction, thus leaving plaintiffs to rely upon specific jurisdiction to pursue claims
against foreign generic drug manufacturers in Hatch-Waxman actions.
Only a few district courts have had occasion to address the issue of specific jurisdiction
in the context of ANDA litigation since the Supreme Court’s decision in Daimler. District Courts
in Delaware and Indiana have focused on the unique nature of ANDA litigation in finding that
because the Hatch-Waxman Act is “‘a statutory creation, distinct from making, using, or selling a
patented technology’ it therefore ‘has no readily apparent situs of injury for the purpose of finding
specific jurisdiction.’” Eli Lilly & Co. v. Mylan Pharm., Inc., 2015 WL 1125032, at *5 (quoting
AstraZeneca, 2014 WL 5778016, at *6). However, a finding that the act of filing an ANDA is not
directed to any jurisdiction is “a result we find illogical.” Id. at *6. Thus, the Indiana District
Court concluded that the defendants “purposefully directed their activities at Indiana by sending a
Paragraph IV certification notice letter to Lilly in Indiana, which they knew would trigger the
forty-five day period within which Plaintiffs were empowered to file suit under the Hatch-Waxman
framework,” thus providing the minimum contacts with the forum for purposes of finding that the
court had specific jurisdiction over the defendants. Id. at *7.
Based upon these recent developments in the law governing personal jurisdiction in HatchWaxman actions, the Court finds that there is already sufficient evidence in the record for Plaintiffs
to respond to the motion to dismiss, as Plaintiffs are already in possession of Defendants’ ANDA.
The additional discovery requested by Plaintiffs would essentially amount to a fishing expedition

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into issues unrelated to the question of whether the Court has personal jurisdiction over Nang
Kuang and CANDA. Plaintiff’s Motion for Jurisdictional Discovery and to Stay Defendants’
Motion to Dismiss (Filing No. 33) is therefore DENIED.1 Plaintiffs shall have fourteen (14) days
from the date of this Entry to file their response to Defendants’ motion to dismiss, and Defendants’
reply brief shall be due within seven (7) days after service of Plaintiffs’ response brief.
SO ORDERED.
Date: 6/15/2015
DISTRIBUTION:
Jan M. Carroll
BARNES & THORNBURG LLP
[e-mail]
Aya Cieslak-Tochigi
FARNEY DANIELS PC
[e-mail]
Steven R. Daniels
FARNEY DANIELS PC
[e-mail]
Michael A. Siem
FARNEY DANIELS, PC
[e-mail]
Anthony R. Jost
RILEY BENNETT & EGLOFF LLP
[e-mail]
Stephanie Snell Chaudhary
RILEY BENNETT & EGLOFF LLP
[e-mail]

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Likewise, Defendants’ request for leave to take discovery on the Plaintiffs’ pre-filing investigation forming the basis
for their allegations that Defendants are subject to general personal jurisdiction in Indiana is also denied.

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Andrew V. Trask
WILLIAMS & CONNOLLY
[e-mail]
Adam L. Perlman
WILLIAMS & CONNOLLY LLP
[e-mail]
Bruce Roger Genderson
WILLIAMS & CONNOLLY LLP
[e-mail]
David M. Krinsky
WILLIAMS & CONNOLLY, LLP
[e-mail]
Dov P. Grossman
WILLIAMS & CONNOLLY, LLP
[e-mail]
Ellen E. Oberwetter
WILLIAMS & CONNOLLY, LLP
[e-mail]

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