Gilbert et al v. Eli Lilly and Company et al

Filing 84

MEMORANDUM OPINION & ORDER GRANTING DEFENDANT ENDO PHARMACEUTICALS HOLDINGS, INC.'S AND DEFENDANT ENDO PHARMACEUTICALS, INC.'S MOTION TO DISMISS: the motion to dismiss for lack of personal jurisdiction filed by Defendants Endo Pharmaceuti cals Holdings, Inc. and Endo Pharmaceuticals, Inc. [MDL Record No. 466] is GRANTED. The claims asserted against Defendants Endo Pharmaceuticals Holdings Inc. and Endo Pharmaceuticals Inc. in the following fourteen actions are DISMISSED, without pr ejudice: Civil Action No. 2: 11-184- DCR, Civil Action No. 2: 11-185-DCR, Civil Action No. 2: 11-186-DCR, Civil Action No. 2: 11-191-DCR, Civil Action No. 2: 11-195-DCR, Civil Action No. 2: 11-196-DCR, Civil Action No. 2: 11-197-DCR, Civil Action No. 2: 11-200-DCR, Civil Action No. 2: 11-206-DCR, Civil Action No. 2: 11-210-DCR, Civil Action No. 2: 11-213-DCR, Civil Action No. 2: 11-221-DCR, Civil Action No. 2: 11-295- DCR, and Civil Action No. 2: 11-325-DCR. Signed by Judge Danny C. Reeves on 4/18/2012.Associated Cases: 2:11-md-02226-DCR et al.(CBD)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
NORTHERN DIVISION
(at Covington)

IN RE: DARVOCET, DARVON AND
PROPOXYPHENE PRODUCTS
LIABILITY LITIGATION

Gilbert, et al., v. Eli Lilly & Co., et al.,
Hunsucker v. Xanodyne Pharm., et al.,
West, et al., v. Qualitest Pharm., et al.,
Kellehar, et al., v. Xanodyne Pharm.,
Hallaway, et al., v. Eli Lilly & Co., et al.,
Lowe, et al., v. Xanodyne Pharm., Inc.,
Coney, et al., v. Xanodyne Pharm., et al.,
Rogers v. Xanodyne Pharm., et al.,
Oniate, et al., v. Eli Lilly & Co., et al.,
Simpson v. Qualitest Pharm., et al.,
Lynch v. Xanodyne Pharm., et al.,
Turner, et al., v. Watson Pharm., et al.,
Dickerson, et al., v. Eli Lilly & Co., et al.,
Sandel v. Eli Lilly & Co., et al.,

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Master File No. 2: 11-md-2226-DCR
MDL Docket No. 2226

Civil Action No. 2: 11-184-DCR
Civil Action No. 2: 11-185-DCR
Civil Action No. 2: 11-186-DCR
Civil Action No. 2: 11-191-DCR
Civil Action No. 2: 11-195-DCR
Civil Action No. 2: 11-196-DCR
Civil Action No. 2: 11-197-DCR
Civil Action No. 2: 11-200-DCR
Civil Action No. 2: 11-206-DCR
Civil Action No. 2: 11-210-DCR
Civil Action No. 2: 11-213-DCR
Civil Action No. 2: 11-221-DCR
Civil Action No. 2: 11-295-DCR
Civil Action No. 2: 11-325-DCR

*** *** *** ***
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANT ENDO PHARMACEUTICALS HOLDINGS, INC.’S
AND DEFENDANT ENDO PHARMACEUTICALS, INC.’S
MOTION TO DISMISS
This matter is pending before the Court for further consideration of the motion to
dismiss filed by Defendants Endo Pharmaceuticals Holdings, Inc. and Endo Pharmaceuticals,
Inc. (jointly referred to as “the Endo Defendants”). [MDL Record No. 466] In these
fourteen cases, the Endo Defendants argue that the claims asserted against them should be
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dismissed because the Court lacks personal jurisdiction. The Court agrees and will grant the
motion for the reasons explained below.
I.
This multidistrict litigation arises out of injuries allegedly caused by the prescription
pain medications containing propoxyphene. Propoxyphene products were withdrawn from
the market on November 19, 2010. Approximately eleven days later, the Endo Defendants
acquired Generics International (US Parent), Inc., which was the owner of three companies
that had previously manufactured or distributed propoxyphene: Vintage Pharmaceuticals,
LLC; Generics Bidco I, LLC; and Generics Bidco II, LLC.
In their complaints, most of the plaintiffs made allegations identical or substantially
similar to the following:
44.
On or about December 1, 2010, Defendant Endo Holdings acquired
Defendant Generics US, Defendant Generics Bidco I, Defendant Generics
Bidco II and Defendant Generics US Parent, and presumably indirectly
acquired through one or all of them Defendant Qualitest, Defendant Vintage,
Defendant Propst, Defendant Brenn Distribution, Defendant Brenn
Manufacturing and/or Defendant Vintage LLC.
45.
The businesses of Defendant Qualitest, Defendant Vintage, Defendant
Propst, Defendant Brenn Distribution, Defendant Brenn Manufacturing and/or
Defendant Vintage LLC may have been combined thereafter into a single
business unit with Defendant Endo.
46.
The extent to which Defendant Endo and/or Defendant Endo Holdings
may have assumed responsibility for the acts, omissions or liability of other

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Generic Qualitest Defendants, contractually or otherwise, is unknown at this
time, and Plaintiff requires discovery as to this issue.1
[E.g., Civil Action No. 2: 11-184-DCR, Record No. 25, pp. 8-9] The plaintiffs thus maintain
that the Endo Defendants may be legally responsible for claims against their subsidiaries that
manufactured or distributed propoxyphene products.
The Endo Defendants filed the current motion to dismiss in twenty-three cases. In
nine of these cases, they did not raise the threshold issue of personal jurisdiction. [See MDL
Record No. 466-1, p. 15 n.10] The Court has already granted the motion in those nine cases,
concluding that, because the plaintiffs’ claims against manufacturers of generic
propoxyphene were preempted under the Supreme Court’s holding in PLIVA, Inc. v.
Mensing, 131 S. Ct. 2567 (2011), the Endo Defendants could have no derivative liability for
the acts of their generic-manufacturer subsidiaries. [Record No. 1589] Regarding the
remaining fourteen cases, the Endo Defendants moved to dismiss for lack of personal
jurisdiction pursuant to Rule 12(b)(2), and the Court now finds that the motion should be
granted in those cases as well.
II.
Pursuant to the statute governing multidistrict litigation, 28 U.S.C. § 1407, a transferee
court possesses the powers of the transferor court. Howard v. Sulzer Orthopedics, Inc., 382

1

Plaintiffs Oniate and Turner alleged that the Endo Defendants were directly involved in
the manufacture or sale of propoxyphene products. [See Civil Action No. 2: 11-206-DCR, Record
No. 1, p. 4 ¶ 10; Civil Action No. 2: 11-221-DCR, Record No. 22, p. 35 ¶ 18] In their joint response
to the instant motion, however, the plaintiffs do not contend that the Endo Defendants themselves
produced or distributed propoxyphene.
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F. App’x 437, 442 (6th Cir. 2010). Thus, this Court has personal jurisdiction over the Endo
Defendants only to the extent such jurisdiction was proper in the states from which the
individual cases were transferred: Indiana, Louisiana, Minnesota, Mississippi, Ohio,
Oklahoma, South Carolina, Tennessee, and Texas. See id.
The burden of establishing personal jurisdiction is on the plaintiffs. Conn v.
Zakharov, 667 F.3d 705, 711 (6th Cir. 2012). To survive a motion to dismiss under Rule
12(b)(2), the plaintiffs must make a two-part prima facie showing: first, that “jurisdiction is
proper under a long-arm statute or other jurisdictional rule of . . . the forum state”; and
second, that “the Due Process Clause also allows for jurisdiction under the facts of the case.”
Id. If either part of the test is not met, the Court’s analysis ends. See id. at 711-12 (“[I]f
jurisdiction is not proper under the Due Process Clause[,] it is unnecessary to analyze
jurisdiction under the state long-arm statute, and vice-versa.”).
The prima facie burden is “‘relatively slight.’” Air Prods. & Controls, Inc. v. Safetech
Int’l, Inc., 503 F.3d 544, 549 (6th Cir. 2007) (quoting Am. Greetings Corp. v. Cohn, 839 F.2d
1164, 1169 (6th Cir. 1989)). In determining whether a plaintiff has made the necessary
showing, the Court must view the parties’ submissions “in a light most favorable to the
plaintiff,” disregarding any contrary assertions by the defendant.2 Id. (citing Theunissen v.
Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)). Nevertheless, “the plaintiff may not stand
on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the

2

The Court may properly consider “undisputed factual assertions” made by a defendant.
Conn, 667 F.3d at 711.
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court has jurisdiction.” Theunissen, 935 F.2d at 1458; see also Kroger Co. v. Malease Foods
Corp., 437 F.3d 506, 510 (6th Cir. 2006) (for purposes of a 12(b)(2) motion, a prima facie
case consists of “specific facts that support a finding of jurisdiction”). That jurisdiction may
be either of two types: specific or general. Conn, 667 F.3d at 712-13.
A.

Specific Jurisdiction

A court has specific jurisdiction over a defendant if the plaintiff’s claims “arise from
the defendant’s contacts with the forum state.” Id. at 713. The Sixth Circuit has identified
three elements that must be present to support a finding of specific jurisdiction:
First, the defendant must purposefully avail himself of the privilege of acting
in the forum state or causing a consequence in the forum state. Second, the
cause of action must arise from the defendant’s activities there. Finally, the
acts of the defendant or consequences caused by the defendant must have a
substantial enough connection with the forum state to make the exercise of
jurisdiction over the defendant reasonable.
Id. Corporate entities are considered separately for purposes of the personal-jurisdiction
analysis; “a company does not purposefully avail itself of the privilege of doing business in
the forum state merely by owning a corporation subject to jurisdiction.” Niemi v. NHK
Spring Co., 543 F.3d 294, 308 (6th Cir. 2008) (citing Dean v. Motel 6 Operating L.P., 134
F.3d 1269, 1273-74 (6th Cir. 1998)). And as a general matter, “a parent corporation ‘is not
responsible for the pre-acquisition liabilities of its wholly-owned subsidiary.’” Morgan v.
Powe Timber Co., 367 F. Supp. 2d 1032, 1035 (S.D. Miss. 2005) (quoting Binder v. BristolMyers Squibb, Co., 184 F. Supp. 2d 762, 773 (N.D. Ill. 2001)).

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Parent corporations are sometimes subject to personal jurisdiction based on the actions
of their subsidiaries, however. The Fifth Circuit has explained that the “presumption of
corporate separateness” between a parent and its subsidiary “may be overcome by clear
evidence” that the parent exerts such control over the subsidiary as to make the latter “its
agent or alter ego.” Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 338 (5th Cir.
1999); see also, e.g., Estate of Thomson v. Toyota Motor Corp. Worldwide, 545 F.3d 357,
362 (6th Cir. 2008) (adopting alter-ego theory of personal jurisdiction in parent-subsidiary
context); Wesleyan Pension Fund v. First Albany Corp., 964 F. Supp. 1255, 1261 (S.D. Ind.
1997) (“institutional independence” of parent and subsidiary “is only a presumption and may
be overcome by clear evidence”). This “clear evidence” standard “requires an additional or
a ‘plus’ factor, ‘something beyond the subsidiary’s mere presence within the bosom of the
corporate family.’” Dickson Marine, 179 F.3d at 338 (quoting Donatelli v. Nat’l Hockey
League, 893 F.2d 459, 465-66 (1st Cir. 1990)).
Here, according to the plaintiffs, “[s]pecific jurisdiction over [the] Endo Defendants
can be established through successor liability or other liability theories.” [Record No. 901,
p. 19] In other words, they ask the Court to exercise jurisdiction over the Endo Defendants
based on other companies’ contacts with the forum states. [See id., pp. 19-20] Yet, while
the plaintiffs acknowledge that clear evidence is required in this instance [see id., p. 20], they
fail to present any evidence whatsoever. Instead, they direct the Court to the following
statement in their complaints: “The extent to which Defendant Endo and/or Defendant Endo
Holdings may have assumed responsibility for the acts, omissions or liability of other
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Generic Qualitest Defendants, contractually or otherwise, is unknown at this time, and
Plaintiff requires discovery as to this issue.” [Id. (quoting representative complaint)] As set
forth in the complaints, the plaintiffs assert, the “Endo Defendants could have assumed
successor liability through their acquisition of [the] Generics Defendants.” [Id. (citing
complaint)] The plaintiffs declare that “these facts” must be taken as true and are sufficient
to establish a prima facie case of specific jurisdiction. [Id.; see also id., p. 22 (“The Endo
Defendants, through their subsidiaries, the Generics Defendants, purposefully availed
themselves into each forum state through manufacture and/or distribution of the subject
drug. . . . This purposeful availment and successor liability . . . establish a prima facie case
of personal jurisdiction . . . .” (citing complaint))]
But what “facts”? The portion of the complaint relied upon by the plaintiffs merely
implies that the Endo Defendants “may have” somehow assumed the liabilities of their
subsidiaries; the only factual assertion it contains is that the plaintiffs do not have the
information they need to establish personal jurisdiction. [Id.] Thus, even if the plaintiffs
were permitted to “stand on [their] pleadings,” Theunissen, 935 F.2d at 1458, they would fall
woefully short of the necessary prima facie showing.3
Furthermore, notwithstanding the plaintiffs’ repeated references to successor liability,
the law is clear that “if the original entity still exists, there is no successor — and no

3

In any event, as the Court explained in its previous opinion, the Endo Defendants are not
subject to derivative liability for actions taken by their subsidiaries because the subsidiaries
themselves are not liable under Mensing. [Record No. 1589, p. 6]
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successor liability.” In re Welding Fume Prods. Liab. Litig., No. 1:03-CV-17000, 2010 U.S.
Dist. LEXIS 57859, at *42 (N.D. Ohio June 11, 2010); see id. at *43 n.66 (citing cases from
Texas and Indiana, among other jurisdictions). As the plaintiffs are well aware, the Endo
Defendants’ subsidiaries still exist; the plaintiffs sued them, too. The concern underlying
successor liability — that claimants will be “left without recourse against an entity simply
because the entity sells all of its assets or changes its corporate form,” id. at *42 — thus is
not present here, and rules of successor liability are inapplicable.
In short, the plaintiffs have not sufficiently alleged that the Court has specific
jurisdiction over the Endo Defendants, much less demonstrated an adequate factual basis for
such a finding. Nor is the Court persuaded by the plaintiffs’ insistence that jurisdictional
discovery is needed, since the lenient prima facie standard is premised on the assumption that
plaintiffs will not have had the benefit of such discovery.4 See, e.g., Air Prods. & Controls,
503 F.3d at 549 (“Where . . . the district court relies solely on written submissions and
affidavits to resolve a Rule 12(b)(2) motion, rather than resolving the motion after either an
evidentiary hearing or limited discovery, . . . the plaintiff must make only a prima facie
showing that personal jurisdiction exists in order to defeat dismissal.”). Because the
plaintiffs have not presented “specific facts” establishing that their claims arise out of
4

To the extent the plaintiffs suggest that Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324
(6th Cir. 2009), indicates otherwise, their argument is misplaced. In Metcalfe, the plaintiffs had
already made a prima facie showing of personal jurisdiction, and the Sixth Circuit found that
discovery was appropriate “to help facilitate the [ultimate] resolution of the jurisdictional issue.”
Id. at 336; see id. at 337 (concluding that plaintiffs had made a prima facie showing and remanding
“to allow the [plaintiffs] to conduct jurisdictional discovery before the District Court conclusively
decides whether exercising jurisdiction over [the defendant] is permissible.”).
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contacts the Endo Defendants have with any of the subject jurisdictions, specific jurisdiction
is lacking. Conn, 667 F.3d at 711; see id. at 713.
B.

General Jurisdiction

The Court has general jurisdiction over the Endo Defendants only if “their affiliations
with the [forum] [s]tate[s] are so ‘continuous and systematic’ as to render them essentially
at home in” those states. Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846
(2011) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 317 (1945)). To satisfy
the Due Process Clause, a defendant must have certain “‘minimum contact[s]’ with the forum
state so that finding personal jurisdiction does not ‘offend traditional notions of fair play and
substantial justice.’” Conn, 667 F.3d at 712 (alteration in original) (quoting Third Nat’l Bank
v. WEDGE Grp., Inc., 882 F.2d 1087, 1089 (6th Cir. 1989)). Due process requires contacts
“so pervasive” that they support a finding of jurisdiction “even [though] the suit has nothing
to do with those contacts.” Id. at 718 (internal quotation marks omitted). Like specific
jurisdiction, general jurisdiction must be proper not only under the Due Process Clause, but
also under the long-arm statutes of the forum state.5 See id. at 711.
The plaintiffs offer two possible grounds for general jurisdiction. First, they reiterate
their earlier erroneous contention that “under a theory of successor liability, [the] Endo
5

The parties agree that the long-arm statutes of Indiana, Louisiana, Minnesota, Mississippi,
Oklahoma, South Carolina, Tennessee, and Texas are coextensive with the Due Process Clause.
[See Record No. 466-1, p. 15 & n.11; Record No. 901, p. 17 & n.13] Ohio’s statute, however, does
not “reach[] to the limits of the Due Process Clause, and the analysis of Ohio’s long-arm statute is
a particularized inquiry wholly separate from the analysis of Federal Due Process law.” Conn, 667
F.3d at 712. The distinction is ultimately irrelevant here, since a failure of jurisdiction under the
Due Process Clause renders moot the applicability of state statutes. See id. at 711-12.
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Defendants can be liable for the acts of [their] subsidiaries.” [Record No. 901, p. 24] As
before, however, the plaintiffs fail to present any specific facts that would support a finding
of jurisdiction based on the Endo Defendants’ relationship to their subsidiaries.6 And as
explained previously, successor liability does not apply here. See In re Welding Fume Prods.
Liab. Litig., 2010 U.S. Dist. LEXIS 57859, at *42. This argument thus does not merit further
discussion.
The plaintiffs also argue that jurisdiction is proper based on the presence of Endo
Pharmaceuticals sales representatives in the forum states, as well as the sales revenues that
“presumably” follow.7 [Record No. 901, p. 24] They concede, however, that “simple
placement of a product into the ‘stream of commerce’” is not enough to establish jurisdiction
over the manufacturer where that product is unrelated to the plaintiff’s claims. [Id.] To hold
otherwise, the Supreme Court recently explained, would
elide[] the essential difference between case-specific and all-purpose (general)
jurisdiction. Flow of a manufacturer’s products into the forum . . . may bolster
an affiliation germane to specific jurisdiction. But ties serving to bolster the
exercise of specific jurisdiction do not warrant a determination that, based on
those ties, the forum has general jurisdiction over a defendant.
Goodyear, 131 S. Ct. at 2855 (citation omitted). The Goodyear Court rejected a “sprawling
view of general jurisdiction” under which “any substantial manufacturer or seller of goods
6

The plaintiffs acknowledge their failure, admitting that they “are not privy to the
information required to present evidence needed to meet their burden.” [Record No. 901, p. 23]
7

The information concerning sales representatives comes from the Affidavit of Alan G.
Levin, Chief Financial Officer of Endo Pharmaceuticals Holdings, Inc., which was provided by the
Endo Defendants in support of their motion to dismiss. [See Record No. 901, p. 24 (citing Endo
Defendants’ brief and Levin Affidavit)]
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would be amenable to suit, on any claim for relief, wherever its products are distributed.”
Id. at 2856. Thus, the fact that some (non-propoxyphene) products manufactured by the
Endo Defendants may have been sold in the forum states is not dispositive, as such products
did not give rise to the plaintiffs’ alleged injuries.
Moreover, the mere presence of a corporation’s sales representatives in a forum state
is insufficient to establish personal jurisdiction over the company. See, e.g., Nichols v. G.D.
Searle & Co., 991 F.2d 1195, 1200 (4th Cir. 1993) (finding no general jurisdiction where
defendant maintained “17-21 promotional representatives and two district managers” in
forum state, among other contacts; “advertising and solicitation activities alone do not
constitute the ‘minimum contacts’ required for general jurisdiction”); Seitz v. Envirotech Sys.
Worldwide Inc., 513 F. Supp. 2d 855, 863 (S.D. Tex. 2007) (citing Cent. Freight Lines Inc.
v. APA Transp. Corp., 322 F.3d 376, 381 (5th Cir. 2003)) (“The conclusory assertion that
[the defendant] has appointed a Texas sales representative, with no additional facts, is
insufficient to make a prima facie showing of personal jurisdiction.”). The fact that Endo
Pharmaceuticals is registered to do business in four of the forum states is likewise of no great
significance. See Pittock v. Otis Elevator Co., 8 F.3d 325, 328-29 (6th Cir. 1993)
(defendant’s designation of agent for service of process in forum state does not relieve
plaintiff of burden of establishing minimum contacts); Siemer v. Learjet Acquisition Corp.,
966 F.2d 179 (5th Cir. 1992) (registration to do business and appointment of agent for service
of process in forum state did not support finding of general jurisdiction); Samuelson v.
Honeywell, 863 F. Supp. 1503, 1507 (E.D. Okla. 1994) (defendant’s “compliance . . . with
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Oklahoma statutory requirements for conducting business in Oklahoma does not
automatically subject [the defendant] to the jurisdiction of the State of Oklahoma in a suit
unrelated to its Oklahoma contacts”). Without more, these factors do not warrant the Court’s
exercise of jurisdiction over the Endo Defendants.
Finally, the Court rejects the plaintiffs’ contention that because they “were not
strangers in the forum [s]tates, the requirement for substantial contacts is not as rigorous as
a situation with an out-of-state plaintiff.” [Record No. 901, p. 26; see id. at 25] As the
Supreme Court noted in Goodyear, “general jurisdiction to adjudicate has . . . never been
based on the plaintiff’s relationship to the forum.” 131 S. Ct. at 2857 n.5. Rather, “[w]hen
a defendant’s act outside the forum causes injury in the forum, . . . a plaintiff’s residence in
the forum may strengthen the case for the exercise of specific jurisdiction.” Id. Whether the
plaintiffs reside in the forum states is thus irrelevant for purposes of general jurisdiction.
III.
The plaintiffs have failed to demonstrate that the Endo Defendants are subject to
specific or general jurisdiction in any of the forum states. As a result, this Court also lacks
personal jurisdiction over the Endo Defendants, and dismissal under Rule 12(b)(2) is
appropriate. Accordingly, it is hereby
ORDERED that the motion to dismiss for lack of personal jurisdiction filed by
Defendants Endo Pharmaceuticals Holdings, Inc. and Endo Pharmaceuticals, Inc. [MDL
Record No. 466] is GRANTED.

The claims asserted against Defendants Endo

Pharmaceuticals Holdings Inc. and Endo Pharmaceuticals Inc. in the following fourteen
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actions are DISMISSED, without prejudice: Civil Action No. 2: 11-184-DCR, Civil Action
No. 2: 11-185-DCR, Civil Action No. 2: 11-186-DCR, Civil Action No. 2: 11-191-DCR,
Civil Action No. 2: 11-195-DCR, Civil Action No. 2: 11-196-DCR, Civil Action No. 2: 11197-DCR, Civil Action No. 2: 11-200-DCR, Civil Action No. 2: 11-206-DCR, Civil Action
No. 2: 11-210-DCR, Civil Action No. 2: 11-213-DCR, Civil Action No. 2: 11-221-DCR,
Civil Action No. 2: 11-295-DCR, and Civil Action No. 2: 11-325-DCR.
This 18th day of April, 2012.

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