In re Atrium Med. Corp.

299 F.Supp.3d 324

IN RE: ATRIUM MEDICAL CORP. C–QUR MESH PRODUCTS LIABILITY LITIGATION (MDL NO. 2753)

MDL Docket No. 16–md–2753–LM

United States District Court, D. New Hampshire.

Signed Filed November 14, 2017

ALL CASES

ORDER

Landya McCafferty, United States District JudgeGetinge AB, one of the three defendants in this multi-district litigation, moves pursuant to Federal Rule of Civil Procedure 12(b)(2) to dismiss all claims against it for lack of personal jurisdiction. See doc. no. 80. Plaintiffs object to the motion to dismiss and also move for discovery on the issue of personal jurisdiction. See doc. no. 95. Getinge AB objects to discovery.

Background

Plaintiffs bring claims in individual cases for injuries they allege were caused by hernia repair products made from C–Qur mesh. They further allege that the C–Qur mesh products were developed, manufactured, marketed, and sold by the defendants, Getinge AB, Atrium Medical Corporation ("Atrium"), and Maquet Cardiovascular US Sales, LLC ("Maquet"). Atrium and Maquet are wholly-owned subsidiaries of Getinge AB. The cases have been consolidated in this court for pretrial proceedings as multi-district litigation.

Getinge AB moves to dismiss all claims against it for lack of personal jurisdiction. Plaintiffs object, arguing that they have satisfied their burden of showing that the court has personal jurisdiction over Getinge AB. Plaintiffs also move for leave to conduct discovery limited to Getinge AB's personal jurisdiction in the event that the court is not inclined to deny the motion to dismiss.

Discussion

In the Master Long Form Complaint, plaintiffs allege that Getinge AB is a Swedish corporation with its principal place of business in Sweden. They allege that Atrium is incorporated under the laws of Delaware with its principal place of business in New Hampshire, and Maquet is incorporated under the laws of Delaware with its principal place of business in New Jersey.

With regard to defendants' personal jurisdiction, plaintiffs allege:

24. Defendants have and continue to conduct substantial business in the State of New Hampshire and in this District, distribute Hernia Mesh Products in this District, receive substantial compensation and profits from sales of Hernia Mesh Products in this District, and made material omissions and misrepresentations and breaches of warranties in this District, so as to subject them to in personam jurisdiction in this District.

25. Defendants conducted business in the State of New Hampshire through sales representatives conducting business in the State of New Hampshire, and because Defendants were engaged in testing, developing, manufacturing, labeling, marketing, distributing, promoting and/or selling, either directly or indirectly, and/or through third parties or related entities, Hernia Mesh Products in New Hampshire.

26. Consistent with the Due Process Clause of the Fifth and Fourteenth Amendments, this Court has in personam jurisdiction over Defendants, because Defendants are present in the State of New Hampshire, such that requiring an appearance does not offend traditional notices of fair and substantial justice.

Doc. no. 53.

Plaintiffs do not allege that Getinge AB itself has any physical presence in New Hampshire or anywhere in the United States. They allege, however, that this court has personal jurisdiction over Getinge AB for the following reasons:

• Getinge AB was directly responsible for the design, development, manufacture and sale of the C–Qur devices.

See doc. no. 53 at ¶¶ 9, 10, 15, 16, 18.

• Getinge AB assumed Atrium's liabilities, and is therefore liable as Atrium's successor. Seeid. at ¶ 8.

• Getinge AB is liable for Atrium's and Maquet's actions because they are Getinge AB's agents and/or alter egos. Seeid. at ¶¶ 11–14.

Getinge AB moves to dismiss, contending that the court lacks personal jurisdiction over it because it is a Swedish corporation without jurisdictional contacts with any state in the United States. It further contends it did not assume Atrium's liabilities and that plaintiffs cannot show that the activities of Atrium and Maquet can be imputed to Getinge AB.

Plaintiffs object, arguing first that Getinge AB has waived a personal jurisdiction defense or should be judicially estopped from asserting the defense. Plaintiffs also argue that personal jurisdiction exists because, as they alleged in their complaint, Getinge AB is responsible for the C–Qur products sold after it acquired Atrium and because the activities of Atrium and Maquet can be attributed to Getinge AB under theories of assumption of liability, agency, and alter ego. Alternatively, plaintiffs move for leave to conduct discovery on the jurisdictional issues.

I. Waiver

A defendant waives the defense of a lack of personal jurisdiction by failing to raise it in a timely motion or failing to include it in a responsive pleading. Fed. R. Civ. P. 12(h)(1). A defendant may also waive the defense through conduct that is inconsistent with the defense. Vazquez–Robles v. CommoLoCo, Inc., 757 F.3d 1, 3 (1st Cir. 2014). Conduct that may constitute waiver of the personal jurisdiction defense, in addition to a failure to raise the defense in a timely manner, includes "participation in, or encouragement of, the district court proceedings." Precision Etchings & Findings, Inc. v. LGP Gem, Ltd., 953 F.2d 21, 25 (1st Cir. 1992) ; Gen. Contracting & Trading Co., LLC v. Interpole, Inc., 940 F.2d 20, 22 (1st Cir. 1991) ; see also Lechoslaw v. Bank of Am., N.A., 618 F.3d 49, 55 (1st Cir. 2010).

Plaintiffs contend that Getinge AB has waived the defense of lack of personal jurisdiction by participating in the multi-district litigation and complying with various court orders without reserving the defense. Getinge AB argues that its involvement in routine case management matters did not waive its right to assert a lack of personal jurisdiction defense. Getinge AB also represents that it reserved the right in its response to plaintiffs' motion for transfer and consolidation and then asserted the defense in its answer and moved to dismiss in a timely manner.

A defendant does not waive a personal jurisdiction defense by participating in the initial proceedings for multi-district litigation as long as that defendant raises the defense in a timely motion to dismiss. In re: Mobile Telecomms. Techs., LLC, 243 F.Supp.3d 545, 551–52 (D.N.J. 2017). In this case, Getinge AB raised the lack of personal jurisdiction as an affirmative defense in its answer filed on June 6, 2017. See doc. no. 77 at 18. On the same day, Getinge AB filed its motion to dismiss for lack of personal jurisdiction. See doc. no. 80. Its participation in the preliminary multi-district litigation proceedings does not operate as a waiver of the defense. In short, plaintiffs have not shown that Getinge AB waived the defense of a lack of personal jurisdiction.

II. Judicial Estoppel

Plaintiffs also argue that Getinge AB is barred by judicial estoppel from raising the defense. In support, plaintiffs assert that Getinge AB's participation in a related product liability action in New Hampshire state court and in a product liability action in California state court, without asserting a lack of personal jurisdiction defense in either case, bars the defense here.¹ Plaintiffs also rely on Getinge AB's suit in Delaware state court against the founder and primary shareholder of Atrium, Steve Herweck.²

The doctrine of judicial estoppel "typically applies when, among other things, ‘a party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled.’ " Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 170, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010) (quoting New Hampshire, 532 U.S. at 750, 121 S.Ct. 1808 ). "The doctrine should be employed when a litigant is playing fast and loose with the courts, and when intentional self-contradiction is being used as a means of obtaining unfair advantage." John Hancock Life Ins. Co. v. Abbott Labs., 863 F.3d 23, 34 (1st Cir. 2017) (internal quotations marks and citation omitted). The party to be estopped must take positions that are mutually exclusive, must have persuaded a court to adopt or rely on the earlier position, and "must stand to derive an unfair advantage if the new position is accepted by the court." RFF Family P'ship, LP v. Ross, 814 F.3d 520, 528 (1st Cir. 2016) (internal quotation marks and citation omitted).

Judicial estoppel does not apply here. Although Getinge AB participated as a defendant in two cases without raising the defense, Getinge AB has not affirmatively taken a contrary position to the one it asserts here; that is, Getinge AB has not persuaded the courts in those two cases to find that personal jurisdiction existed there. Further, plaintiffs have not shown that Getinge AB is attempting to gain an unfair advantage by asserting the defense here.

In sum, plaintiffs have not shown that Getinge AB is barred from raising the defense of personal jurisdiction based on a theory of judicial estoppel.

III. Jurisdiction Analysis

"Personal jurisdiction implicates the power of a court over a defendant. In a federal court, both its source and its outer limits are defined exclusively by the Constitution." Foster–Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 143 (1st Cir. 1995). A "federal court exercising diversity jurisdiction is the functional equivalent of a state court sitting in the forum state."

Astro–Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1, 8 (1st Cir. 2009) (internal quotation marks and citation omitted). Thus, ordinarily, a federal court sitting in diversity must "find sufficient contacts between the defendant and the forum to satisfy both that state's long-arm statute and the Fourteenth Amendment's Due Process clause." Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995).

In multi-district...