A Generic Drug Manufacturers Prior Voluntary and Persistent Participation as a Litigant in Delaware is No Guarantee of Jurisdiction

February 24, 2010

Preston K. Ratliff II

The United States District Court for the District of Delaware issued a ruling last Friday that may make it harder for plaintiffs in Hatch-Waxman litigations to have their choice of forum stick. In a multi-defendant litigation involving AstraZenecas cholesterol-lowering drug CrestorÒ, Plaintiff AstraZeneca argued that Delaware had general jurisdiction over Defendant Apotex Inc. (Apotex) because, in part, Apotex had previously brought suits in Delaware, voluntarily submitted to personal jurisdiction in Delaware numerous times, and asserted counterclaims in several litigations. In response, Apotex argued that its prior participation as a litigant in Delaware as a defendant and at various times as a counterclaim-plaintiff in Hatch-Waxman litigations was insufficient to establish the substantial and continuous activity required for the exercise of general jurisdiction. Judge Farnan, upon considering the Magistrates Report and Recommendation, agreed with Apotex noting that Apotex has had no choice as to where it is ultimately sued. Judge Farnan, however, did not address AstraZenecas argument that Apotexs initiation of its own suits in Delaware supported jurisdiction. After also finding lack of a principal-agent relationship between Apotex and its co-defendant Apotex Corp., Judge Farnan transferred the Apotex action to the Southern District of Florida.

In view of the Delaware Courts ruling, plaintiffs in Hatch-Waxman litigations should be mindful that a generic drug manufacturers prior consent, active participation, and bringing of claims and counterclaims in other cases, may be held insufficient to support a claim of personal jurisdiction.

To review the decisions click on the following links (Magistrate's Report and Recommendation) and (Memorandum Order).