PLUMBERS' LOCAL UNION NO. 690 HEALTH PLAN v. ACTAVIS INC.
2:16-cv-00665
E.D. Pa.May 23, 2017Background
- Plaintiff Plumbers’ Local Union No. 690 Health Plan sued multiple pharmaceutical-related defendants and filed an Amended Complaint. Several defendants moved to dismiss under Fed. R. Civ. P. 12(b)(5) for insufficient service of process.
- The court reviewed service attempts for three groups: Teva Ltd. (an Israeli corporation), DRL Limited (an Indian corporation), and the Qualitest defendants (U.S. entities whose counsel accepted waivers only for Par and Generics).
- Plumbers attempted service by mailing to U.S. addresses, by sending waivers to counsel, and by asking certain counsel to accept service; in several instances service was refused or counsel disclaimed authority.
- Teva Ltd.: Plumbers never served Teva Ltd.; counsel for Teva Ltd. entered an appearance but never agreed to accept service for Teva Ltd.
- DRL Limited: Plumbers mailed papers to DRL Inc. (a separate U.S. subsidiary) and to DRL’s counsel; DRL Limited maintains it must be served in India under the Hague Convention and that DRL Inc. cannot accept service for it.
- Qualitest defendants: Plumbers mailed summonses/complaints to counsel Stephen Brody based on perceived authority; Brody later confirmed he was not authorized to accept service for those entities (he had waived service only for Par and Generics).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Teva Ltd. was properly served | Plumbers says Teva’s counsel (Wolfson) agreed to accept service | Teva Ltd. says it was never served and counsel did not accept service for Teva Ltd. | Service was not proper; no good cause for failure, but court grants discretionary 30-day extension because Teva had actual notice and no prejudice |
| Whether DRL Limited was properly served | Plumbers contends it served DRL Limited (via counsel or at DRL Inc.) | DRL Limited says service must occur in India under Hague; DRL Inc. is a separate entity and cannot receive service for DRL Limited | Service was not proper; Hague procedures apply so the 90-day rule does not run; court grants additional time to effectuate service |
| Whether Qualitest defendants were properly served | Plumbers asserts mailing to counsel Brody was reasonable reliance on his authority | Qualitest defendants say Brody was not authorized to accept service for them (waived only for Par and Generics) | Service was not proper; no good cause shown, but court grants discretionary extension because defendants had actual notice and no prejudice |
Key Cases Cited
- Grand Entm't Grp., Ltd. v. Star Media Sales, Inc., 988 F.2d 476 (3d Cir. 1993) (plaintiff bears burden to prove validity of service; notice alone does not cure defective service)
- MCI Telecommunications Corp. v. Teleconcepts, Inc., 71 F.3d 1086 (3d Cir. 1995) (good cause for service-extension equated with excusable neglect; focus on plaintiff's reasons)
- Petrucelli v. Boehringer & Ratzinger, 46 F.3d 1298 (3d Cir. 1995) (reliance on third parties or inadvertence of counsel does not constitute good cause)
- Ayres v. Jacobs & Crumplar, P.A., 99 F.3d 565 (3d Cir. 1996) (participation in litigation does not waive service defects when objections are preserved)
- Boley v. Kaymark, 123 F.3d 756 (3d Cir. 1997) (two-step inquiry for service-timetable extensions: mandatory if good cause, discretionary otherwise)
- United States v. Ziegler Bolt & Parts Co., 111 F.3d 878 (Fed. Cir. 1997) (attorney-client relationship alone does not establish authority to accept service)