Array BioPharma, Inc. v. AstraZeneca plc

Filing 28

OPINION AND ORDER re: (24 in 1:18-cv-00235-PKC) LETTER MOTION for Oral Argument (12) addressed to Judge P. Kevin Castel from Lara Samet Buchwald dated April 20, 2018. filed by AstraZeneca plc, (12 in 1:18-cv-00235-PKC) MOTION to R emand to State Court . filed by Array BioPharma, Inc., (14 in 1:18-cv-02445-PKC) MOTION to Remand to State Court . filed by Array BioPharma, Inc., (19 in 1:18-cv-02445-PKC) LETTER MOTION for Oral Argument (14) addres sed to Judge P. Kevin Castel from Lara Samet Buchwald dated April 20, 2018. filed by AstraZeneca AB. Plaintiff's motion to remand in 18 cv 235 (PKC) (Dkt. 12) is GRANTED. Defendant's motion in 18 cv 235 (PKC) (Dkt. 24) for oral argument is DENIED as moot. Plaintiff's motion to remand in 18 cv 2445 (PKC) (Dkt. 14) is GRANTED. Defendant's motion in 18 cv 2445 (PKC) (Dkt. 19) for oral argument is DENIED as moot. The Court has considered plaintiff's request for supplem ental submissions on sanctions and the Court concludes, based upon a review of the defendants' submissions informed by plaintiff's submissions, that the positions taken by the defendants in the two actions were asserted in good faith bas ed upon either existing law or for establishing new law. Plaintiff's application is DENIED. The Clerk is directed to remand Array BioPharma, Inc. v. AstraZeneca PLC, 18 cv 235 (PKC), and Array BioPharma, Inc. v. AstraZeneca AB, 18 cv 2445 (PKC), to the Supreme Court of the State of New York, New York County, from which they were removed and to close the case in this Court. (Signed by Judge P. Kevin Castel on 8/9/2018) (kgo)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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ARRAY BIOPHARMA, INC.,
Plaintiff,
-against-

18-cv-235 (PKC)
OPINION AND ORDER

ASTRAZENECA PLC,
Defendant.
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ARRAY BIOPHARMA, INC.,
Plaintiff,

18-cv-2445 (PKC)

-againstASTRAZENECA AB,
Defendant.
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CASTEL, U.S.D.J.
The first captioned action (the “PLC Action”) was commenced in Supreme Court
of the State of New York, New York County and timely removed to this Court based upon
diversity of citizenship and an amount in controversy in excess of the jurisdictional threshold. 28
U.S.C. §§ 1332, 1441. Array BioPharma, Inc. (“Array”) is a Delaware corporation with its
principal place of business in Colorado. AstraZeneca PLC is a public limited company
organized under the laws of England and Wales with its principal place of business in
Cambridge, U.K. The amount in controversy is at least $192,000,000.
Subsequent to the filing of the PLC Action, Array filed a virtually mirror-image
complaint in Supreme Court of the State of New York, New York County against AstraZeneca

AB. That action (the “AB Action”), was timely removed to this Court based upon diversity of
citizenship and amount in controversy, 28 U.S.C. §§ 1332, 1441, and assigned to the undersigned
as a related case. AstraZeneca AB, defendant in the AB Action, is an entity organized under the
laws of Sweden with its principal place of business in Södertälje, Sweden. The amount in
controversy in the AB Action is at least $192,000,000.
Array now moves to remand the PLC Action and the AB Action. The removing
defendant bears the burden of showing the propriety of federal jurisdiction. See United Food &
Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Properties Meriden Square,
Inc., 30 F.3d 298, 301 (2d Cir. 1994). The Court resolves doubts against removability. In re
Methyl Tertiary Butyl Ether (“MTBE”) Prod. Liab. Litig., 488 F.3d 112, 124 (2d Cir. 2007).
Array’s motions are based upon a forum selection clause in a Collaboration and
Licensing Agreement (the “Agreement” (PLC Action, Dkt. 1 Ex. A to Ex. A; AB Action, Dkt. 1
Ex. A to Ex. C)) that is the subject of a breach of contract claim in both actions. The Agreement
provides unambiguously that “the courts of the State of New York” are the “exclusive
jurisdiction” for resolving any disputes arising from the Agreement. 1 (Agreement § 12.3). It
expresses a perfectly rational decision to favor one experienced and sophisticated judicial system
to hear any dispute to the exclusion of others, including the federal judicial system. The
Agreement, however, is between Array and AstraZeneca AB. AstraZeneca PLC is not a party to
the Agreement.

1

The full text of the provision reads as follows:
Subject to Section 12.2, this Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced
in accordance with the laws of the State of New York, U.S.A. without reference
to conflicts of laws principles and the Parties hereby submit to the exclusive
jurisdiction of the courts of the State of New York.

(Agreement § 12.3).

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THE PLC ACTION.
Under New York law, the general rule is that a forum selection clause may not be
enforced against a non-signatory parent corporation solely by virtue of its status as parent
corporation. 2 Tate & Lyle Ingredients Ams., Inc. v. Whitefox Techs. USA, Inc., 98 A.D.3d 401,
401 (1st Dep’t 2012); see Dean St. Capital Advisors, LLC v. Otoka Energy Corp., No. 15 cv 824
(RJS), 2016 WL 413124, at *3 (S.D.N.Y. Feb. 1, 2016) (Sullivan, J.). It is not disputed that New
York law recognizes exceptions to this general rule, such as when the non-signatory (i) is a
successor in interest to the original signatory, see Aguas Lenders Recovery Grp. LLC v. Suez,
S.A., 585 F.3d 696, 701–02 (2d Cir. 2009), or (ii) is “closely related” to the dispute and the
signatory, such that it was foreseeable that it would be bound, see Tate & Lyle, 98 A.D.3d at
401–02; cf. Magi XXI, Inc. v. Stato della Citta del Vaticano, 714 F.3d 714, 722–23 (2d Cir.
2013).
Here, AstraZeneca PLC has established that it is not the successor of AstraZeneca
AB with regard to the businesses alleged in the PLC Action complaint. Put simply, AstraZeneca
PLC and AstraZeneca AB have separate existences. AstraZeneca PLC held ownership interests
in 187 subsidiaries as of year-end 2016 and does not license, manufacture, or distribute any
pharmaceutical products. (Jackson-Turner Decl. ¶¶ 3–4). It has never merged with or assumed
any liabilities or obligations of Astra Zeneca AB, but rather remains its ultimate, indirect parent.
(Id. ¶¶ 9–10). Array’s conclusory allegations that AstraZeneca PLC is a successor to
AstraZeneca AB do not defeat AstraZeneca PLC’s showing. Moreover, Array acknowledged in
the AB Action that AstraZeneca PLC is the indirect corporate parent of AstraZeneca AB. (AB
Action Compl. ¶ 23).

2

Neither side challenges the applicability of New York law. The Court will apply it. (Agreement § 12.3).

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There remains the question of whether AstraZeneca PLC is “closely associated”
with the dispute arising from the Agreement and with AstraZeneca AB. AstraZeneca PLC’s
board of directors approved the collaboration with Merck & Co., Inc. (“Merck”), which included
a sublicense to Merck under the Agreement between AstraZeneca AB and Array. (JacksonTurner Decl. ¶ 8). The Merck collaboration lies at the heart of the PLC Action complaint. (PLC
Action Compl. ¶¶ 42–53). AstraZeneca PLC issued a press release regarding the Merck
collaboration that AstraZeneca PLC incorporated in a Form 6-K filing. (Hemr Decl. Exs. 1 & 2).
The press release drew no distinction between AstraZeneca AB and AstraZeneca PLC.
AstraZeneca PLC closely associated itself with AstraZeneca AB not merely based upon
ownership, but through its involvement in approving the Merck collaboration and in making
public announcements regarding the Merck collaboration that make no effort to distinguish its
role from that of its subsidiary. Because of its role in approving and announcing the Merck
collaboration, AstraZeneca PLC is closely associated with the “dispute” as it is defined in the
PLC Action complaint. It became foreseeable to AstraZeneca PLC, as a result of its own
voluntary actions, that any dispute with Array over any licensing fees due to Array by reason of
the Merck collaboration would implicate the Agreement, which vests exclusive jurisdiction in
the “the courts of the State of New York.” (Agreement § 12.3).
THE AB ACTION.
Array has also moved to remand the AB Action. The basis for the motion is
straightforward. AstraZeneca AB is a signatory to the Agreement with Array in which it
submitted to the exclusive jurisdiction of the New York state courts for any dispute arising from
the performance or breach of the Agreement.

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AstraZeneca AB asserts that remand should be denied because the AB Action is a
backdoor means of amending the PLC Action and, under its theory, remand of the PLC Action
ought to be denied. The fact that plaintiff could have amended the PLC action to add
AstraZeneca AB is of no significance. Plaintiff had the right to proceed as it did.
AstraZeneca AB also asserts that this Court should exercise either supplemental
jurisdiction or ancillary jurisdiction over the AB Action. Because the PLC Action will be
remanded, there will be no case in this Court that could serve as a basis for the Court’s exercise
of supplemental or ancillary jurisdiction, even if AstraZeneca AB’s theories were otherwise
correct.
CONCLUSION.
Plaintiff’s motion to remand in 18 cv 235 (PKC) (Dkt. 12) is GRANTED.
Defendant’s motion in 18 cv 235 (PKC) (Dkt. 24) for oral argument is DENIED as moot.
Plaintiff’s motion to remand in 18 cv 2445 (PKC) (Dkt. 14) is GRANTED.
Defendant’s motion in 18 cv 2445 (PKC) (Dkt. 19) for oral argument is DENIED as moot.
The Court has considered plaintiff’s request for supplemental submissions on
sanctions and the Court concludes, based upon a review of the defendants’ submissions informed
by plaintiff’s submissions, that the positions taken by the defendants in the two actions were
asserted in good faith based upon either existing law or for establishing new law. Plaintiff’s
application is DENIED.

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The Clerk is directed to remand Array BioPharma, Inc. v. AstraZeneca PLC, 18
cv 235 (PKC), and Array BioPharma, Inc. v. AstraZeneca AB, 18 cv 2445 (PKC), to the
Supreme Court of the State of New York, New York County, from which they were removed
and to close the case in this Court.

SO ORDERED.

Dated: New York, New York
August 9, 2018

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