In rе: ELI LILLY AND COMPANY; ELI LILLY ITALIA S.P.A.; ELI LILLY KINSALE LIMITED; ELI LILLY GES.M.B.H.; ELI LILLY NEDERLAND B.V. ELI LILLY AND COMPANY; ELI LILLY ITALIA S.P.A.; ELI LILLY KINSALE LIMITED; ELI LILLY GES.M.B.H.; ELI LILLY NEDERLAND B.V., Movants - Appellants, v. NOVARTIS PHARMA AG, Respondent - Appellee.
No. 22-1094
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
June 16, 2022
PUBLISHED. Argued: May 4, 2022. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. T. S. Ellis, III, Senior District Judge. (1:21-mc-00017-TSE-IDD)
Before
ARGUED: Katherine Ann Helm, DECHERT, LLP, New York, New York, for Appellants. William M. Jay, GOODWIN PROCTER, LLP, Washington, D.C., for Appellee. ON BRIEF: Christina Guerola Sarchio, DECHERT LLP, Washington, D.C., for Aрpellants. Jordan Bock, GOODWIN PROCTER LLP, Boston, Massachusetts, for Appellee.
NIEMEYER, Circuit Judge:
Eli Lilly and Company and its foreign subsidiaries (collectively, “Eli Lilly“) applied to the district court under
After Novartis intervened and objected to Eli Lilly‘s application, the district court entered an order denying the application, concluding (1) that Novartis was not “found” in the Eastern District of Virginia because it lacked a physical presence there; (2) that, assuming “found” was coextensive with the constitutional limits of personal jurisdiction, as Eli Lilly argued, Novartis was still nоt “found” in the district; and (3) that, in any event, discretionary factors identified by the Supreme Court weighed against granting Eli Lilly‘s application in the circumstances of this case.
On Eli Lilly‘s appeal challenging each ground given by the court, we affirm the district court‘s order based on the first and third grounds and therefore find it unnecessary to address the second.
I
Eli Lilly is an international pharmaceutical company based in Indiana, and Novаrtis is an international pharmaceutical company based in Switzerland. Both companies produce anti-psoriasis drugs that rely on “a monoclonal antibody that targets and binds [the relevant protein],” and both companies have patents or pending patent applications relating to their drugs. As for Novartis, it purchased a patent portfolio from Genentech, Inc. in 2020 that included, among othеrs, two relevant European patents and three relevant U.S. patent applications.
After acquiring the patent portfolio, Novartis filed patent-infringement actions against Eli Lilly in several European countries, including Germany, Ireland, Italy, Austria, and Switzerland. In response, Eli Lilly not only challenged the validity of at least one of Novartis‘s European patents (including by initiating a separate action against Nоvartis in the Netherlands), but it also contended that Novartis was engaging in anticompetitive conduct by abusing a “dominant position in a relevant European market.” In addition, it has stated that it intends to file complaints against Novartis for anticompetitive conduct with one or more of the European agencies regulating competition.
On June 16, 2021, Eli Lilly filed its application under
Eli Lilly‘s application was assigned to a magistrate judge for disposition in the first instance, and the magistrate judge granted it and authorized Eli Lilly to serve a subpoena on Novartis. Novartis thereafter filed a motion to intervene, which the magistrate judge granted, and it then filed a motion to vacate the magistrate judge‘s order and quash the subpoena. Eli Lilly, in turn, filed a motion to compel Novartis to produce the discovery. After finding that
The district court, however, issued an order dated January 18, 2022, vacating the magistrate judge‘s order, denying Eli Lilly‘s
Eli Lilly filed this appeal from the district court‘s order.
II
In denying Eli Lilly‘s application under
We are thus presented with the question of what the word “found” in
Section 1782 provides in relevant part, “The district court of the district in which a person resides or is found may order him to [provide discovery] for use in a proceeding in a foreign or international tribunal.”
But the analysis is more complex in the context of a corporation. As the Supreme Court has noted, “When the litigants are natural persons the conceptions underlying venue [designated by where the person is ‘found‘] present relatively
We begin, as wе ordinarily do when determining a statute‘s meaning, with an assessment of its text to find its “ordinary meaning at the time of [its] enactment.” United States v. George, 946 F.3d 643, 645 (4th Cir. 2020) (cleaned up). And that meaning will control “absent ambiguity or a clearly expressed legislative intent to the contrary.” Id. (cleaned up).
To aid in this analysis, we turn to definitions of “found” contemporaneous with
The same understanding of “found” is reflected in Supreme Court decisions issued prior to
Then, in Eastman Kodak Co. of New York v. Southern Photo Materials Co., 273 U.S. 359 (1927), the Court construed “found” similarly to require a form of a corporation‘s physical presence in the district. The Court considered
In view of these contemporaneous definitions in legal dictionaries and Supreme Court opinions, we can presume that when Congress similarly used “found” in
This textual conclusion is confirmed by legislative history, although any reference to legislative history in these circumstances might be gratuitous. See Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1143 (2018) (“If the text is clear, it needs no repetition in the legislative history“). In 1949, when Congress amended
Thus, because Eli Lilly does not contend that Novartis was physically present in the Eastern District of Virginia by its officers and аgents carrying on the corporation‘s business, we conclude that the district court acted in conformance with the requirements of
Eli Lilly disputes that the definition of “found” includes a requirement of physical presence, relying on the Supreme Court‘s decision in Freeman v. Bee Machine Co., 319 U.S. 448 (1943), where the Cоurt said at 454 that “‘found’ in the venue sense does not necessarily mean physical presence.” But neither the Court‘s holding in Freeman nor the particular statement relied on by Eli Lilly advances its cause.
As to Freeman‘s holding, the plaintiff in that case sought to amend its complaint against Freeman to add a treble-damages claim under
Despite that holding grounded on Freeman‘s presence in Massachusetts, the Court did note that “fоund” “does not necessarily mean physical presence.” Freeman, 319 U.S. at 454. But this observation came in a broader context, which Eli Lilly elided:
But “found” in the venue sense does not necessarily mean physical presence. We noted in Neirbo Co. v. Bethlehem Shipbuilding Corp., [308 U.S. 165, 170-71 (1939)] that a corporation may be “found” in a particular district for venue purposes merely because it had consented to be sued there.
Id. The Neirbo principle to which the Court referred was that even though a corporation “must dwell in the place of its creation,” 308 U.S. at 169 (citation omitted), it may be “found” in any state in which it consents to being sued by designating an agent to accept service of process, id. at 170-71; see also Ex parte Schollenberger, 96 U.S. 369, 375-76 (1877) (holding that a corporation is “found” in the district in which it has designated an agent for service of process, even though the corporation was not incorporated there). Thus, the Freeman statemеnt to which Eli Lilly refers actually supports the principle that a corporation is “found” not only where it is incorporated but also where it has agents carrying on its business or designated to receive process. See, e.g., Found, Black‘s Law Dictionary (3d ed. 1933) (defining “found” as to a corporation as requiring that the corporation “be doing business in such state through an officer or agent or by statutory authority in such manner as to render it liable then to suit and to constructive or substituted service of process“).
Eli Lilly also points to a purportedly different definition of “found” in the 1951 edition of Black‘s Law Dictionary, noting that the definition states that “found” “does not necessarily mean physical presence.” See Found, Black‘s Law Dictionary (4th ed. 1951). This particular reference in the definition, however, was simply a direct quote from Freeman. And more importаntly, the definition to which Eli Lilly refers goes on to define “found” as it is used in connection with a corporation. That portion states:
As [“found” is] applied to a corporation it is necessary that it be doing business in such state through an officer or agent or by statutory authority in such manner as to render it liable then to suit and to constructive or substituted service of process.
Id. (emphasis added).
In short, Eli Lilly‘s invocations of Freeman and Black‘s Law Dictionary hardly advance its position.
Even so, Eli Lilly mounts a more general attack on thе district court‘s interpretation of “found” by arguing, at a jurisprudential level, that a physical-presence requirement for “found” is an “outmoded territorial approach,” inconsistent with the “modern approach” articulated in International Shoe Co. v. Washington, 326 U.S. 310 (1945), and its progeny. Under that approach, Eli Lilly contends, the concept of a corporation‘s “presence” in a district is “used merely to symbolize th[e] activities of the corporation‘s agent within the state which courts will deem to be sufficient to satisfy the demands of due process.” (Quoting International Shoe, 326 U.S. at 316-17). Thus, in Eli Lilly‘s view of the modern approach, a corporation is “found” in a district whenever its contacts there “are sufficient to subject it to suit there, consistent with due process, whether that presence is physical or constructive.”
Of course, we do not dispute that International Shoe is a foundational decision for determining when state courts may сonstitutionally exercise personal jurisdiction over defendants, including corporations. See Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1024 (2021) (characterizing International Shoe as a “canonical decision” in establishing the “limits [of] a state court‘s power to exercise jurisdiction over a defendant” consistent with the Fourteenth Amendment‘s Due Process Clause). But Congress did not incorporate International Shoe‘s “modern approach,” as Eli Lilly suggests, when enacting
To argue otherwise, Eli Lilly points to In re del Valle Ruiz, 939 F.3d 520 (2d Cir. 2019), which indeed held that a corporation is “found” in a district so long as it is properly subject to personal jurisdiction there consistent with the Due Process Clause. See id. at 528. But the del Valle Ruiz court did not discuss the plain meaning of “found.” Indeed, by simply concluding that “found” refers to the personal jurisdiction standard under the Due Process Clause, the court ignored both the holding in People‘s Tobacco, 246 U.S. at 84, which was controlling, as well as contemporaneous legal dictionary definitions of “found.” And while the court did recognize that
Because our ruling affirms the district court on the basis of its interpretation of the word “found” in
III
In denying Eli Lilly‘s
In Intel, the Supreme Court held that “a district court is not required to grant a
The Intel Court identified four factors for district courts to consider in exercising discretion under
In this case, while the district court stated generally that it had indeed considered the Intel factors, it focused particularly on the third and fourth factors. It concluded that the discovery requested by Eli Lilly was “unduly burdensome” because Eli Lilly gave “no indication” that the materials it sought were “located in the Eastern District of Virginia or even in the United States.” The court explained, “Eli Lilly in essence requests that a substantial volume of data and materials located abroad be brought into the United States for subsequent use in proceedings abroad, a nonsensical result.” The court also concluded that Eli Lilly‘s
It is apparent that the factors addressed by the district court fall squarely within those factors identified by the Supreme Court in Intel as relevant. We accordingly conclude that the district court did not abuse its discretion in concluding that the Intel factors weighed in favor of denying Eli Lilly‘s
* * *
For the reasons given, the district court‘s ruling dated January 18, 2022, denying Eli Lilly‘s application seeking discovery from Novartis, is affirmed.
AFFIRMED