ANDA filing creates Nationwide Personal Jurisdiction

Acorda Therapeutics v. Mylan Pharma (Fed. Cir. 2016)

In this personal jurisdiction case, the Federal Circuit has affirmed the Delaware Court’s ruling that the court has specific jurisdiction over Mylan in two parallel cases.  In a super-broad holding, the court here finds that when a generic company files a new drug application (ANDA) with the FDA, that the filing opens the door to personal jurisdiction in any state where the Generic Company will market the drug if approved. This effectively means that the generic company could be sued in any state in the Union.

In Federal Courts, personal jurisdiction usually looks to underlying state law and asks whether the defendant would be “subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.”  Fed. R. Civ. P. 4(k)(1)(A). Delaware’s long-arm statute allows for personal jurisdiction so long as it does not violate the Constitutional due process protections.  On that issue, however, the Federal Circuit has repeatedly held that personal jurisdiction in patent cases is a patent-specific question that must be determined under Federal Circuit law rather than following the law of the regional circuit court of appeal. See Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1292 (Fed. Cir. 2012); Akro Corp. v. Luker, 45 F.3d 1541, 1543 (Fed. Cir. 1995).

The facts here involve Mylan seeking FDA approval to market its generic drugs that will eventually be sold in Delaware (as well as every other state in the Union).  In considering that action, the court found it sufficient for personal jurisdiction for cases steming from the ANDA approval application. The court writes:

Mylan’s ANDA filings constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs. Delaware is undisputedly a State where Mylan will engage in that marketing if the ANDAs are approved. And the marketing in Delaware that Mylan plans is suit-related: the suits over patent validity and coverage will directly affect when the ANDA can be approved to allow Mylan’s Delaware marketing and when such marketing can lawfully take place.

The majority opinion in this case was penned by Judge Taranto and joined by Judge Newman.

Judge O’Malley wrote a concurring opinion arguing that the case would have been more easily (and less dramatically) decided on general jurisdiction grounds since Mylan was registered to operate in Delaware and had provided local agent for service of process in the State.

I tend to agree with O’Malley in this case — especially with the conclusion that the Majority opinion is likely overreaching.  The holding that Mylan is amenable to suit in Delaware is not problematic to me, but this case obviously opens the door to these pharma cases in the E.D. of Texas.

= = = = =

I’ll note that the parties here hired some of the top Supreme Court lawyers in the country for this case. To name a few, Ted Olson represented Acorda; Paul Clement represented Mylan; Kannon Shanmugam for AZ; Andy Pincus and Carter Phillips both filed amicus briefs.  This means that they are planning to take the case up to the Supreme Court if allowed.

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

54 thoughts on “ANDA filing creates Nationwide Personal Jurisdiction

  1. “…the court here finds that when a generic company files a new drug application…”

    I think you meant “generic PHARMACEUTICAL company”.

  2. Why is opening ED Tex (which allegedly favors patent owners) up to Hatch-Waxman suits by patent owners against generic ANDA filers a bad thing — unless one favors generics?

    1. Also, might I add, that the Taranto and Newman both seem on board with the idea that the US today is a national market for most corporations, and that it is fair to sue, even for venue purposes, a corporation selling nationally anywhere.

    2. Why is opening ED Tex… a bad thing…

      Note the lack of Trainwrecking by Malcolm to a question asked by Ned that reflects my question at post 4.

      My question is merely more precise and includes an underlying motive. My question brings greater clarity – a clarity that Malcolm deigned threatening enough that he attempted to side track and NOT answer with his usual “Yay Ecosystem” games – the SAME games he has been playing for a full decade now.

    3. Ned: Why is opening ED Tex (which allegedly favors patent owners) up to Hatch-Waxman suits by patent owners against generic ANDA filers a bad thing — unless one favors generics?

      Not only ED Tex but also the District Court of Alaska or any other physically remote court which decides to alter its local rules to encourage suit-filers to take advantage of their “offerings”.

      You could, I supppose, always ask the question “Why is opening the ED Tex (which allegedly favors patent owners) up to the vast majority of patent suits by NPE patent owners against hundreds of disparate productive businesses across the country a bad thing — unless one favors productive businesses?”

      But most reasonable people would find that question rather silly.

      The bottom line is that you don’t need to “favor” any type of party to take issue with forum shopping and suit-filers seeking to tip the scales of justice by taking advantage of technical differences between courts.

      Lastly, with respect to this bit about favoring “generics” specifically, you surely are aware, Ned, that our patent system has been expressly designed to “favor” generic companies over pharmaceuticals who are trying to protect branded drugs with invalid patents. That’s what the public asked Congress to do, and Congress did it. Attempts by brand pharma manufacturers to subvert the system by forum shopping aren’t going to be viewed kindly.

      We now return you to the regularly scheduled episode of This Week in Conspiracy. Today’s episode: “What do generic companies have over Dennis Crouch?” Stay tuned! It’s going to be very serious.

      1. LOL – seems like you forgot (again) the law in effect about the presumption of validity of patents (and not just pharmaceutical ones)

        Pesky thing, the law, it kinds of ruins your attempts at spin.

        Again.

        1. Seems like you forgot to take your meds, “anon.”

          Remember: it’s never too late to get the medical help you need. Ask a friend.

          1. Your short script ad hominem is empty and meaningless. My reply at 6.3.1 had a barb, but that barb was directly pointed to your post and its error of neglecting 35 U.S. Code § 282.

            Thanks for highlighting the difference and emphasizing what a blight you are.

      2. MM, if a generic invalidates a patent, all generics benefit. To compensate for the free ride others might get, the first ANDA filer gets a 180-day exclusive. There is nothing in this that suggests that Congress wanted to bias the playing field one way or the other regarding patent validity.

        Now yelling about the ED Tex on behalf of Generics does suggest that one favors Generics.

  3. From dissent:
    As Ockham’s Razor advises, the simpler path is usually
    best. See, e.g., Awkal v. Mitchell, 613 F.3d 629, 655
    (6th Cir. 2010) (Boyce, J., dissenting) (“At some point,
    Ockham’s Razor must apply—the simplest answer is
    usually the correct one.”); Commodity Futures Trading
    Comm’n v. Zelener, 373 F.3d 861, 868 (7th Cir. 2004)
    (Easterbrook, J.) (“Best to take Occam’s Razor and slice
    off needless complexity.”).
    Slip at 3.

    I see why Judge O’Malley (or her clerk) used the analogy, but its not really apt because Occam’s Razor is about two different answers to the same problem – not the different possible answers between two different problems.

    It is like saying: let us explain buoyancy because it is simpler than explaining why optics works. While it is true* (although buoyancy is slippery), it is not applying Occam’s Razor.

    Rather, applying Occam’s Razor, the court would choose the simpler explanation of specific jurisdiction (or a simpler explanation of buoyancy over a more complicated explanation of buoyancy).**

    * Buoyancy is pretty slippery and counterintuitive to lay people.

    **Grain of salt: if you view personal jurisdiction (as a general legal doctrine) as the thing to be explained then Occam’s Razor would apply, but I don’t view general versus specific jurisdiction as within the same ambit of interest because they are so divergent in policy and reasoning.

    I digress.

    1. I agree the reference to Ockham’s Razor is a bit strange in this context. Was it briefed that way, I wonder, or does judge O’Malley (or one of her clerks) just enjoy invoking it?

      Note: it was a concurrence, not a dissent.

  4. Is there an anti-E.D. of Texas “mindset” that “should be heeded”…?

    A “narrow” decision that does not answer a legitimate question that can be answered seems to celebrate “narrowness” for its own sake, as opposed to why any such “narrowness” should be followed.

    This smacks of a certain “P.C.” “feeling.”

    If the non-narrow view is legitimate, then we have no “real” issue.

    If the non-narrow view is NOT legitimate, then let’s focus on the explicit reasons.

    When an item is truly national and creates personal jurisdiction everywhere, then that is its nature, and the “Oh Noes” effect that E.D. of Texas is enabled is a bit untowards.

    Instead of this implicit “bandwagon” “Tr011s” meme, why don’t we discuss the fact that a legitimate and detailed request to the White House is fast approaching its year anniversary of being filed with NO answer from the White House in sight?

    1. This smacks of a certain “P.C.” “feeling.”

      Your eagerness to defend the banana republic of Texas smacks of something, too.

      But go ahead and rail against “political correctness”! That’s totally not like something a Republican patent maximalist tr0ll defender would do.

      1. Great – you do know (since I have told you) that I am not a Republican.

        But hey, you are the “Trump” of the anti-patent presence on these boards…

        1. I am not a Republican.

          Sure you’re not. You just recite all the Republican lines! I get it. Hardly anyone wants to admit being a Republican these days. I suppose you’re one of those “independent” types — the super serious smart people, in their own minds!

          Seriously, if you told me you’re not an American citizen I’d be more inclined to believe that.

          Who’d you vote for in the last five elections? I pulled for the Democrat every time. What about you?

          1. You sure do suffer some serious group think problems…

            That, or you have something against independent critical thinking…

            Or both.

            Best bet is both.

              1. Way to prove my point about lack of critical thinking…

                You are so warped politically that you insist on mischaracterizing my post.

                Independent critical thinking is NOT “thinking like the independent political party.”

                You do realize that Democrats can be for strong patent rights, right? Being a Democrat does NOT mean hewing to some left leaning anti-property view.

                Of course, you should have known that.

                1. Being a Democrat does NOT mean hewing to some left leaning anti-property view.

                  Nice strawman.

                  So who’d you vote for in the last five elections, Mr. Independent?

                2. There was no strawman there Malcolm.

                  You are the one who seems intent on painting what is – and what is not – a Democrat.

                  I am merely telling you that your narrow “boxed” view is wrong.

                  Try to deal with it.

            1. This is what we all love about “anon”, right?

              He never prevaricates. Nope. He’s a totally open, straightforward guy without an evasive or biased bone in his body. A real straight shooter! After all, he told us so.

      1. Maybe Malcolm, instead of false accusations of political leanings that are not on point, you care to actually discuss something of merit and on point to, you know, patents…

        (I won’t be holding my breath)

        Yay Decade of Decadence.

  5. DC: Delaware is undisputedly a State where Mylan will engage in that marketing if the ANDAs are approved.

    The Federal Circuit: of particular importance, Mylan intends to direct sales of its drugs into Delaware, among other places, once it has the requested FDA approval to market them.

    The Federal Circuit: it suffices for Delaware to meet the minimum-contacts requirement in the present cases that Mylan’s ANDA filings and its distribution channels establish that Mylan plans to market its proposed drugs in Delaware

    Are companies required to identify the individual states where they seek to market the drug when they file an ANDA? Or is there some generic catch-all language that covers every state in the country?

    For various reasons (e.g., Mylan filed its ANDA with the FDA in Delaware) there was apparently no dispute about Mylan’s “intent”.

    I’m curious, though, as to whether there could be a disputable issue of “intent” with a different ANDA filer, e.g., a filer with different “distribution channels” who filed its ANDA in a different state than the one in which the lawsuit is being brought (e.g., Alaska) and who does evidence any intent to market its drug in that state (or who expressly states that it does not so intend). If the answer to that question is “yes,”, then the majority’s holding is not quite so broad as this post suggests.

    1. Oops, I left out the word in bold by accident:

      and who does not evidence any intent to market its drug in that state

    2. The motions were decided on facts that are not in material
      dispute. Mylan is incorporated in West Virginia
      and has its principal place of business there. Mylan
      submitted its ANDAs to the FDA in Maryland, and it did
      much if not all of its preparation of its ANDA filings in
      West Virginia. Regarding the notices of its ANDA filings
      required by 21 U.S.C. § 355(j)(2)(B)(iii), Mylan sent notices
      to Acorda in New York and Alkermes in Ireland (for
      the Acorda matter), and it sent notices to AstraZeneca’s
      subsidiary in Delaware and AstraZeneca in Sweden (for
      the AstraZeneca matter). Mylan has registered to do
      business and appointed an agent to accept service in
      Delaware. And, of particular importance, Mylan intends
      to direct sales of its drugs into Delaware, among other
      places, once it has the requested FDA approval to market
      them. The plaintiffs, for their part, also have connections
      with Delaware: Acorda is incorporated in Delaware,
      AstraZeneca’s U.S. subsidiary has its principal place of
      business in Delaware, and both Acorda and AstraZeneca
      have sued other generic manufacturers for infringement
      of the same patents in Delaware
      Maj. opinion, slip at 6.

      Not sure about catch-all language for where you seek to market in a ANDA filing.

      I think all ANDA’s are filed in Maryland (where FDA is). Please correct me otherwise.

      Facts not in dispute – Mylan probably filed some affidavit.

      I think the majority opinion is a mish-mash between the Waldon effects test and stream of commerce plus (with a twist because it is for future action and not past harm). The general principle being that an ANDA filer is subject to specific jurisdiction, under the 14th, in any state it plans to market and sell the generic.

      Not like it really matters in light of the concurrence – which would give the patent owner freedom to file in its home jurisdiction anyway (under the Waldon effects test). Note: no freedom to file in ED TX unless incorporated or principle place of business.

      Its hard to get excited over this kind of litigation because it the cost of getting a generic to market runs somewhere between $250k to $22M. Whoever is going to file the ANDA is planning on a very large scale. The only reason to do that is if you plan on entering the market nationally, which means marketing and selling in the entire US (under stream of commerce plus, I believe that is enough for personal jurisdiction in a specific state).

        1. Well: tax-inversion is really only a shaving off of taxable income because…
          US taxation of income earned by non-US persons depends on whether the income has a nexus with the United States and the level and extent of the non-US person’s presence in the United States. A foreign corporation engaged in a US trade or business is taxed at regular US corporate tax rates, but only on income from US sources that is effectively connected with that business, and at 30% on US-source
          income not effectively connected with that business. [The standard rule – money made in a nation is taxed by that nation]. By contrast, US-resident corporations are taxed based on their worldwide income. [We have a zany rule where world-wide income].

          Hence, you save money on tax inversion be cutting your tax liability from world-wide income to only US income.

          So: you either (1) create a US subsidiary or (2) contract with someone to perform all your sales etc within the US because you are not a foreign corporation. Probably easier under (1) because most tax-inverters keep their US offices etc as principle place of business (it’s still nice to live/work here).

          So under majority opinion: you can still sue anywhere where Walden/stream of commerce plus causes you potential harm (by market penatration)

          Under concurring opinion: if you have a US sub (like AstraZeneca’s
          subsidiary in Delaware) you can still file in DE under Walden effects test; if you dont have a US sub, you file as foreign citizen under Walden effects test, which is (?). I’m not sure – I’ll need to read FRCP / 28 USC to see where foreign corporations can file in light of Walden effects test.

          1. Unintentional international joke – when I used DE I meant Delaware not Germany (obvious in light of the case, but just to be clear).

    3. ANDA filings do not have a section to identify intended states for distribution, and since generic cos sell to pharmacies (including national or semi-national chains), rather than patients, it would make excluding individual states even harder.

      Although, I like the idea of withholding cheaper drugs from the EDTX until they become less plaintiff-friendly

      1. ANDA filings do not have a section to identify intended states for distribution,

        Thanks, Will.

        generic cos sell to pharmacies (including national or semi-national chains), rather than patients

        Interesting.

  6. Also, given the breadth of this decision, the generic drug companies might want to take an interest in the outcome of TC Heartland (unless I’m mistaken in my assumption that 28 USC 1400 venue applies to ANDA litigation as well).

  7. The majority may not have wanted to reach the general jurisdiction issue given the opposing decisions of the district judges. However, even on specific jurisdiction, it seems the majority could have easily adopted Judge O’Malley’s treatment of specific jurisdiction under Calder v. Jones, and thereby reached a narrow decision based on the specific facts of this case (i.e., that the patent owners were both Delaware corporations), rather than unnecessarily creating a nation-wide ANDA personal jurisdiction rule.

    1. P, missing from the OP are the following facts that support Calder jurisdiction:

      “The plaintiffs, for their part, also have connections
      with Delaware: Acorda is incorporated in Delaware,
      AstraZeneca’s U.S. subsidiary has its principal place of
      business in Delaware, and both Acorda and AstraZeneca
      have sued other generic manufacturers for infringement
      of the same patents in Delaware.”

      O’Malley would have held that the ANDA filing harmed citizens of Delaware:

      In Calder, the Court held that, when a defendant engages
      in intentional acts expressly aimed at the forum
      state, knowing that those acts will harm a potential
      plaintiff residing in that state, the courts in that state do
      not violate due process in exercising jurisdiction over that
      defendant. Id. at 788–90. The defendants in Calder, two
      nonresident journalists, argued that a California court
      could not exercise personal jurisdiction over them for the
      distribution of an “allegedly libelous story concern[ing]
      the California activities of a California resident.” Id. at
      788. The Court analyzed “the relationship among the
      defendant, the forum, and the litigation” to find that
      minimum contacts existed, justifying the exercise of
      jurisdiction over the defendants. Id. (quoting Shaffer v.
      Heitner, 433 U.S. 186, 204 (1977)) (internal quotation
      marks omitted). Specifically, the Court relied upon the
      following facts:

      The allegedly libelous story concerned the California
      activities of a California resident. It impugned
      the professionalism of an entertainer
      whose television career was centered in California.
      The article was drawn from California
      sources, and the brunt of the harm, in terms both
      of respondent’s emotional distress and the injury
      to her professional reputation, was suffered in
      California.

      Id. at 788–89. Because “California [was] the focal point
      both of the story and of the harm suffered,” it was appropriate
      to exercise jurisdiction over the defendants “in
      California based on the ‘effects’ of their Florida conduct in
      California.” Id. at 789.

      The Supreme Court discussed the reach of Calder in
      Walden v. Fiore, 134 S. Ct. 1115, 1123–26 (2014). There,
      the Court noted:

      The crux of Calder was that the reputation-based
      “effects” of the alleged libel connected the defendants
      to California, not just to the plaintiff. The
      strength of that connection was largely a function
      of the nature of the libel tort.

      Walden serves to clarify Calder, but does
      not overrule it or limit its holding exclusively to libel
      cases. Rather, it makes clear that due process is not
      satisfied by a showing of “mere injury to a forum resident”;
      a court must examine “whether the defendant’s
      conduct connects him to the forum in a meaningful way.”
      Id. at 1125. In Calder, the defendants “‘expressly aimed’
      ‘their intentional, and allegedly tortious, actions’ at
      California because they knew the National Enquirer
      ‘ha[d] its largest circulation’ in California, and that the
      article would ‘have a potentially devastating impact’
      there.” Id. at 1124 n.7 (quoting Calder, 465 U.S. at 789–
      90). The nature of ANDA litigation is such that, as in
      Calder, “the focal point both of the [filing of the ANDA]
      and of the harm suffered” is Delaware. Id. at 1123 (quoting
      Calder, 465 U.S. at 789) (internal quotation marks
      omitted). Jurisdiction over Mylan is proper in Delaware
      based on the “effects” of the conduct it aimed at Delaware.
      Id.

      [T]he filing of the paragraph IV certifications in ANDA applications at issue
      here were not random acts that happen to harm someone
      living in a particular state. As in Calder, the acts were
      calculated and directed to cause harm to the intellectual
      property rights of a known party with a known location.
      It is an act which—even before a single sale of product in
      the State of Delaware—called into question the validity
      and value of property rights protecting the marketing of
      profitable products by Acorda and AstraZeneca. In so
      doing, it called into question the very value of their respective
      businesses. By virtue of the provisions of the
      Hatch–Waxman Act requiring that they do so, the paragraph
      IV certification filing also triggered an obligation to
      quickly file an expensive “infringement” action in an effort
      to lift the cloud placed on the Appellees’ business interests.
      See Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S,
      132 S. Ct. 1670, 1677 (2012) (“Filing a paragraph IV
      certification means provoking litigation.”).

      1. Yes. It seems the majority could have simply determined there was specific jurisdiction in Delaware because the ANDA filing was directed to patent owners in Delaware, without going on to apparently create a broader rule that there would be specific jurisdiction in any district where the drug might be sold in the future.

        Note that in response to your Comment 6, I don’t take a position one way or another as to whether there ought to be personal jurisdiction in EDTX based solely on future drug sales. Under the facts of this case, with the actions being directed to Delaware patent owners, it wasn’t necessary to create that broad of a rule in order to find specific personal jurisdiction in Delaware.

        Also, as “drop by” points out in 3.2, brand drug companies might be just fine being able to sue in their home forum, which is the result of Judge O’Malley’s narrower rule.

        This may all be moot depending on what the court does in TC Heartland. If the petitioner gets its way in that case, it wouldn’t matter whether there is “nationwide personal jurisdiction” if the requirements of 28 USC 1400(b) venue are not met.

        1. Pilgrim, procedurally, can the losing generics seek en banc review of the majority’s holding if they concede consent jurisdiction or Calder jurisdiction?

          1. Good question. They can always seek en banc review, but (in my view) unless they can convince the other judges that en banc review will have some practical effect on the case, it won’t be successful. I really don’t see the full court wanting to revisit a panel decision in order to reach the same ultimate conclusion for the parties involved, only on narrower grounds. Same for a cert. petition.

            It may be that the best option for generics is to wait for a case where the facts are different (no consent to jurisdiction, no Calder jurisdiction – i.e., maybe the EDTX case everyone is hypothesizing about) and then argue in an en banc petition that the majority’s reasoning here regarding “future sales” was just dicta and should be re-visited by the court en banc.

            1. I really don’t see the full court wanting to revisit a panel decision in order to reach the same ultimate conclusion for the parties involved, only on narrower grounds.

              Fold into that thought the item I mention: that narrowness strictly for narrowness (when the non-narrow question is a viable and worthwhile question to answer) is a misapplication of the narrowness doctrine.

              It may be that the best option for generics is to wait for a case where the facts are different

              Precisely – and matches my other comment of:

              If the non-narrow view is legitimate, then we have no “real” issue.

              If the non-narrow view is NOT legitimate, then let’s focus on the explicit reasons.

              Of course, my comment was Tr011ed by the usual “Yay Ecosystem” culprit…

            2. Note as well Pilgrim, this case DOES seek an answer to the specific jurisdiction question.

              Per O’Malley: “The parties dispute a host of factual
              questions regarding the specific jurisdiction issue, including
              whether and to what extent Mylan ultimately may be
              authorized to—or decide to—market generic drugs in
              Delaware. And, as I explain below, I would find specific
              jurisdiction over Mylan in these cases under a different
              legal theory than employed by the majority,…

              1. Anon – I agree specific jurisdiction was an issue in the case, but as pointed out by Judge O’Malley’s concurring opinion, there were alternative grounds on which that issue could be decided. I guess I subscribe more to the Learned Hand philosophy of decision-making – render a decision on the narrowest grounds supported by the facts, and leave a broader decision for another case with different facts.

                This case illustrates why. Here, regardless of how thoroughly the parties addressed the “nationwide specific jurisdiction” question, the facts of this case supported a Calder v Jones finding of specific jurisdiction. Thus (as I mentioned before), the CAFC en banc or the Supreme Court is unlikely to take up the “nationwide specific jurisdiction” question because changing that rule likely will not affect the outcome of this case.

                So in a future case where there are no Calder v Jones facts (i.e., the case is brought in some forum other than the patent owner’s or the ANDA filer’s home forum), the defendant will face an uphill battle trying to get a court to revisit the “nationwide specific jurisdiction” issue with this decision sitting out there as established law.

            3. I see, Pilgrim.

              Then I would say in an en banc petition that what allegedly is going to happen in the future is not a proper basis for present jurisdiction; that its consent for service of process did not extend to this kind of suit, and it if did, it is in fact unconstitutionally imposed burden on a government benefit; and that Calder jurisdiction does not extend beyond libel.

              But then I would suggest that the en banc court decide the case on Calder.

              1. this kind of suit, and it if did, it is in fact unconstitutionally imposed burden on a government benefit

                It is a federal nationwide benefit Ned.

                Your “logic” just does not fit.

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