Law

We've been watching competing interlocutory appeals in a couple of post-Bauman personal jurisdiction cases out of Delaware:  Acorda Therapeutics, Inc. v. Mylan Pharmaceuticals, Inc., 78 F. Supp.3d 572 (D. Del. 2015), and AstraZeneca AB v. Mylan Pharmaceuticals, Inc., 72 F. Supp.3d 549 (D. Del. 2014), that had reached conflicting results regarding whether general personal jurisdiction by consent could be imposed on a non-resident corporation simply because it registered to do business in a state.  Recently, the Second Circuit ruled on this same issue, finding that to impose such jurisdiction on a foreign corporation merely for doing something that every state in the country requires would be the sort of "exorbitant" and "grasping" exercise of personal jurisdiction that the Supreme Court rejected in Bauman on Due Process grounds.  The Second Circuit stated, as to general jurisdiction by consent:

[W]ere we to accept [plaintiff's] interpretation of [the] business registration statute, we would risk unravelling the jurisdictional structure envisioned in [Bauman] based only on a slender inference of consent pulled from routine bureaucratic measures that were largely designed for another purpose entirely.  In [Bauman], the Court criticized as "unacceptably grasping" plaintiffs' request that it "approve the exercise of general jurisdiction in every State in which a corporation engages in a substantial, continuous, and systematic course of business". . . .  The Court rejected such an "exorbitant exercise[ ] of all-purpose jurisdiction". . . .  [Plaintiff] proposes that we infer from an ambiguous statute and the mere appointment of an agent for service of process a corporation's consent to general jurisdiction, creating precisely the result that the Court so roundly rejected in [Bauman]. It appears that every state in the union-and the District of Columbia, as well-has enacted a business registration statute. . . .  If mere registration and the accompanying appointment of an in-state agent-without an express consent to general jurisdiction-nonetheless sufficed to confer general jurisdiction by implicit consent, every corporation would be subject to general jurisdiction in every state in which it registered, and [Bauman's]ruling would be robbed of meaning by a back-door thief.

Brown v. Lockheed Martin Corp., ___ F.3d ___, 2016 WL 641392, at *17 (2d Cir. Feb. 18, 2016) (citations omitted).

The same "back-door thievery" had been proposed in the two patent cases out of Delaware, and we were wondering whether the Federal Circuit (the appellate court with jurisdiction over patent cases) might go the other way and set up a possible return of expansive general personal jurisdiction theories to the Supreme Court.

Didn't happen.  The federal circuit's decision came down today in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals, Inc., 2015-1456, slip op. (Fed. Cir. March 18, 2016), and the court (at least the majority) dodged the general personal jurisdiction issue entirely, deciding the matter solely on specific personal jurisdiction issues.  As to those grounds, there's good news and bad news.  The bad news is that the court allowed a theory of specific personal jurisdiction that seems just as broad in the specific jurisdiction context as a recognition of jurisdiction by consent would have been as a general jurisdiction theory.  The defendant in Acorda was held subject to specific jurisdiction in every state because its filing of an ANDA application with the FDA signified its intent to sell that generic product (which might violate the plaintiff's patent) in not only in Delaware but every state in the country, which thus threatened competitive/economic harm to the plaintiff in every state in the country.  Slip op. at 15.

The good news is that this theory of competitive/economic harm everywhere is not something that's available to individual plaintiffs claiming personal (or, for that matter, economic) injury.  Unlike commercial competitors who compete in every state, product liability plaintiffs don't suffer injury in multiple states.  Since product liability is our focus, we'll leave the merits of the specific jurisdiction argument to the patent lawyers, and focus on the product liability side that we know best.  As to that, only the concurring judge would have allowed general jurisdiction by consent – on the theory that a century-old United States Supreme Court case (that the Second Circuit concluded had been abrogated by the last fifty years of jurisdictional precedent, 2016 WL 641392, at *16-17) still controlled.  Acorda, concurring slip op. at 11-12.

Because we have clients on both sides of the "v." in patent litigation, we take no position whatever on the specific jurisdiction issue in Acorda.  We are pleased, however, to have the general jurisdiction by consent issue off the table, as Delaware historically was one of the states that allowrf that type of jurisdiction well before Bauman.