Chubchai v. AbbVie, Inc.

599 F.Supp.3d 866

Phornphan CHUBCHAI, et al., Plaintiffs,

v.ABBVIE, INC. f/k/a Allergan, Inc., f/k/a Allergan PLC, and f/k/a Zeltiq Aesthetics, Inc., Defendant.

Case No. 4:21-cv-4099-YGR

United States District Court, N.D. California.

Signed April 21, 2022

Alex R. Straus, Milberg Coleman Bryson Phillips Grossman, PLLC, Beverly Hills, CA, Jonathan Betten Cohen, Pro Hac Vice, Milberg Coleman Bryson Phillips Grossman, PLLC, Knoxville, TN, Louiza Tarassova, Pro Hac Vice, Lou Law, Winter Park, FL, for Plaintiffs Phornphan Chubchai, Javier Valencia, Paula Brooks.

Troy Masami Yoshino, Squire Patton Boggs (US) LLP, San Francisco, CA, Alyson Jones, Pro Hac Vice, Butler Snow LLP, Ridgeland, MS, Amy Pepke, Pro Hac Vice, Butler Snow LLP, Memphis, TN, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

Dkt. No. 41

Yvonne Gonzalez Rogers, United States District Judge

Plaintiffs Phornphan Chubchai, Javier Valencia, and Paula Brooks, individually and on behalf of all others similarly situated bring this purported class action against defendant AbbVie, Inc. ("AbbVie") f/k/a Allergan, Inc., f/k/a Allergan plc, and f/k/a Zeltiq Aesthetics, Inc. ("Zeltiq"). Pending before the Court is defendant AbbVie's motion to dismiss the Second Amended Complaint at Docket Number 37 ("SAC"). AbbVie argues that personal jurisdiction is lacking over it because Zeltiq is the proper entity to sue. AbbVie also contends that plaintiffs have failed to state a claim. Having considered the papers submitted and the pleadings in this action, and for the reasons below, the Court hereby GRANTS defendant's motion to dismiss for lack of personal jurisdiction.¹

I. BACKGROUND

The Court assumes the parties' familiarity with the factual allegations in the SAC as well as the procedural posture of this case. Certain factual allegations are described from the SAC as follows:

This action involves side effects resulting from the use of a medical device called the CoolSculpting System, which is used to perform body contouring and fat reduction procedures through a process called Crypolipolysis. Certain individuals that used CoolSculpting developed a serious condition called Paradoxical Adipose Hyperplasia ("PAH"), which causes enlargement and hardening of fat tissues in areas that were treated through CoolSculpting. Correcting PAH requires invasive reconstructive surgery. Plaintiffs collectively bring ten claims related to the CoolSculpting System.²

The crux of plaintiffs' jurisdictional theory is that AbbVie has been responsible for all aspects of the CoolSculpting business based out of California. Prior to April 2017, Zeltiq was the entity responsible for designing, manufacturing, marketing, and labeling of the CoolSculpting medical device and operated out of Pleasanton, California. (SAC ¶ 14.) However, as alleged, on April 28, 2017, Zeltiq was wholly acquired by Allergan Holdco US, Inc. ("Allergan US") via a statutory merger. Plaintiff alleges that after the merger Allergan (as an undefined entity in the SAC) managed all aspects of the CoolSculpting business. (Id. ¶ 15.) On May 8, 2020, AbbVie acquired Allergan plc, Allergan, Inc., and Zeltiq, through a complete merger and is the current owner of the CoolSculpting medical device. (Id. ¶ 11, 17.) After the merger, Allergan's executives were terminated and AbbVie became the new party responsible for CoolSculpting. (Id. ¶ 17.) As alleged, AbbVie executives took control of Zeltiq, was financially responsible for Zeltiq's debts, paid Zeltiq's legal fees for CoolSculpting litigation, and maintained sole responsibility for all aspects of CoolSculpting operations relevant to this case.

Plaintiffs allege that defendant AbbVie is a corporation formed under the laws of Delaware with its principal place of business in Chicago. (Id. ¶ 11.) However, plaintiffs allege that all relevant acts, including the corporate decisions related to selling, promoting, manufacturing, advertising, and labeling the CoolSculpting device were made in California. (Id. ¶¶ 12-13.)

II. LEGAL STANDARD

A. MOTION TO DISMISS PURSUANT TO RULE 12(b)(2)

Under Federal Rule of Civil Procedure Rule 12(b)(2), a defendant may be dismissed if the court lacks personal jurisdiction over it. The party filing the complaint bears the burden to establish jurisdiction. Boschetto v. Hansing , 539 F.3d 1011, 1015 (9th Cir. 2008) ; see also Schwarzenegger v. Fred Martin Motor Co. , 374 F.3d 797, 800 (9th Cir. 2004). Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over parties, looking to the state's long arm statute regarding service of summons. See Fed. R. Civ. Proc. 4(k)(1)(A) (service of process effective to establish personal jurisdiction over defendant subject to jurisdiction in the state court where the district is located); Daimler AG v. Bauman , 571 U.S. 117, 126, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) (same). California's long-arm statute, in turn, permits the exercise of personal jurisdiction to the full extent permitted by federal due process. Daimler , 571 U.S. at 126, 134 S.Ct. 746 ; see also Williams v. Yamaha Motor Co. , 851 F.3d 1015, 1020 (9th Cir. 2017).

Where, as here, the motion to dismiss is based on written submissions, rather than an evidentiary hearing, the plaintiffs need only make a prima facie showing of jurisdiction. Schwarzenegger , 374 F.3d at 800. Plaintiffs make a "prima facie " showing by producing admissible evidence which, if believed, would be sufficient to establish the existence of personal jurisdiction. Ballard v. Savage , 65 F.3d 1495, 1498 (9th Cir. 1995). In deciding whether such a showing has been made, the Court must accept as true the uncontroverted allegations in the complaint and conflicts between facts contained in the parties' affidavits must be resolved in plaintiffs' favor. AT&T v. Compagnie Bruxelles Lambert , 94 F.3d 586, 588 (9th Cir. 1996).

III. DISCUSSION

Only specific jurisdiction is disputed; general jurisdiction does not exist. Specific jurisdiction "exists when a case arises out of or relates to the defendant's contacts with the forum." Ranza v. Nike, Inc. , 793 F.3d 1059, 1068 (9th Cir. 2015) (quotations and citations omitted). "In order for a court to exercise specific jurisdiction over a claim, there must be an ‘affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.’ " Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty. , ––– U.S. ––––, 137 S. Ct. 1773, 1781, 198 L.Ed.2d 395 (2017) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) ). As the Supreme Court explained, the inquiry whether a forum state may assert specific jurisdiction over a nonresident defendant centers on the relationship among the defendant, the forum, and the litigation. Walden v. Fiore , 571 U.S. 277, 283-84, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014). "For a State to exercise jurisdiction consistent with due process, the defendant's suit-related conduct must create a substantial connection with the forum State." Id. at 284, 134 S.Ct. 1115. The plaintiff cannot be the only link between the defendant and the forum; rather, the defendant's conduct must form the necessary connection with the forum in order to establish jurisdiction. Id. at 285, 134 S.Ct. 1115.

It is undisputed that three requirements must be met for a court to exercise specific jurisdiction over a nonresident defendant in the Ninth Circuit: "(1) [t]he non-resident defendant must purposefully direct [its] activities or consummate some transaction with the forum or resident thereof; or perform some act by which [it] purposefully avails [it]self of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable." Yahoo! Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme , 433 F.3d 1199, 1205-06 (9th Cir. 2006) ; Schwarzenegger , 374 F.3d at 802 (citation omitted). Plaintiffs bear the burden of satisfying the first two requirements; the burden then shifts to the defendant to present a "compelling case" that the exercise of jurisdiction would be unreasonable. Mavrix Photo, Inc. v. Brand Techs., Inc. , 647 F.3d 1218, 1228 (9th Cir. 2011) (citations omitted).

The crux of this jurisdictional dispute concerns whether the substantial California contacts of Zeltiq can properly be imputed to AbbVie. There is no dispute that "[a]s a general principle, corporate separateness insulates a parent corporation from liability created by its subsidiary, notwithstanding the parent's ownership of the subsidiary." Ranza , 793 F.3d at 1070.

Nor do the parties dispute that it is the connection or relatedness's between the defendant's forum related activities and the plaintiffs' claims that are key to the specific jurisdiction analysis.

Here, plaintiffs primarily argue that the Court has specific jurisdiction over AbbVie because the company fully and completely merged with Zeltiq, Allergan plc, and Allergan, Inc., and has taken over all aspects of the CoolSculpting business in California. This theory is incoherent and does not persuade that jurisdiction is proper. On one hand, plaintiffs argue that AbbVie completely and statutorily merged such that the business of Zeltiq is only the business of AbbVie. However, plaintiffs concede that Zeltiq still exists as "an active corporation"³ and does not dispute that Zeltiq is a registered entity in California.⁴ Nor do plaintiffs dispute that AbbVie maintains a separate principal headquarters in North Chicago that is different than the CoolSculpting operations based out of California. Instead, plaintiffs place substantial emphasis on the public merger history to tie AbbVie to California for...