Silbersher v. Valeant Pharmaceuticals International, Inc
3:18-cv-01496
N.D. Cal.May 7, 2020Background:
- Defendant Dr. Falk Pharma GmbH is a German corporation headquartered in Breisgau, Germany; it moved to dismiss for lack of personal jurisdiction over the Corrected First Amended Complaint (CFAC) under the False Claims Act (FCA).
- Relator Silbersher alleges defendants caused submission of false claims for Apriso to government payors by fraudulently obtaining and enforcing a mesalamine patent to exclude generics, inflating Apriso prices.
- The CFAC alleges Falk was assigned U.S. ownership rights in the mesalamine patent and actively asserted those rights by suing multiple generic manufacturers before the PTAB invalidation.
- Falk argued it did not prosecute the patent or present claims for payment and thus was misjoined and lacked sufficient U.S. contacts for personal jurisdiction.
- The court applied the "national contacts" framework (because § 3732 authorizes nationwide service) and the familiar case-linked specific jurisdiction standard.
- The court denied Falk’s Rule 12(b)(2) motion, finding a prima facie showing of personal jurisdiction under both national-contacts principles and case-linked (specific) jurisdiction, and held joinder under Rule 20 was proper.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction under § 3732 (national contacts test) | Falk’s assignment and vigorous enforcement of the U.S. patent are U.S. contacts sufficient for national jurisdiction | Falk lacks minimum contacts with the U.S. to satisfy due process | Court: Relator made a prima facie showing of national contacts; jurisdiction proper |
| Specific (case-linked) jurisdiction | Falk’s role in obtaining/enforcing the patent was integral to the alleged fraud that produced false government claims | Falk did not file claims for payment nor directly prosecute the patent, so CFAC claims do not arise from Falk’s forum contacts | Court: Falk’s patent-related conduct was a critical part of the alleged scheme, satisfying case-linked jurisdiction |
| Joinder under Rule 20 | Falk’s patent enforcement was part of the same series of transactions enabling Valeant’s alleged scheme to keep Apriso price inflated | Falk was improperly joined because it did not prosecute the patent or submit claims for Apriso | Court: Joinder proper under Rule 20(a)(2) because defendants’ conduct arose from the same series of transactions |
Key Cases Cited
- Boschetto v. Hansing, 539 F.3d 1011 (9th Cir. 2008) (plaintiff bears burden to prima facie establish jurisdiction on Rule 12(b)(2) without evidentiary hearing)
- Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174 (9th Cir. 2004) (when statute authorizes nationwide service, apply national-contacts analysis)
- Hanson v. Denckla, 357 U.S. 235 (U.S. 1958) (purposeful availment inquiry for jurisdiction)
- Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty., 137 S. Ct. 1773 (U.S. 2017) (specific jurisdiction requires claims to arise out of or relate to defendant’s forum contacts)
- McDonald v. Kiloo ApS, 385 F. Supp. 3d 1022 (N.D. Cal. 2019) (applying Bristol-Myers framework in Northern District of California context)