Federal Circuit Dramatically Expands ANDA Jurisdiction

Last week, the Federal Circuit issued its panel opinion in two cases: Accorda Therpeutics Inc. and Alkermes Pharma Ireland Ltd. v. Mylan Pharmacueticals, Inc. and Mylan Inc. and AstraZeneca AB v. Mylan Pharmacueticals, Inc.  The question before the Court in both cases was whether Mylan was properly subject to jurisdiction in the District of Delaware.  The Federal Circuit held that jurisdiction was proper, with language suggesting that if a generic plans nationwide distribution of its ANDA product, jurisdiction is proper nationwide.

The facts were not significantly disputed.  Mylan is incorporated and has its principal place of business in West Virginia, but is also registered to do business in Delaware and has an agent to accept service of process there.  Further, Mylan intends to direct sales of its drugs into Delaware once its ANDAs are approved.

Whether jurisdiction is proper in Delaware depends upon Delaware’s long-arm statute.  Delaware’s long-arm statute provides for jurisdiction coextensive with the due-process clause of the U.S. Constitution.  Thus, the question before the court was whether Mylan has sufficient “minimum contacts” with Delaware that jurisdiction can be maintained there without violating the Constitution.

The Federal Circuit held that Mylan had sufficient contacts to support jurisdiction in Delaware because “Mylan’s ANDA filings and its distribution channels establish that Mylan plans to market its proposed drugs in Delaware and the lawsuit is about patent constraints on such in-State marketing.”  The court also rejected Mylan’s argument that it would be unduly burdened by litigating in Delaware, noting that Mylan is “a large generic manufacturer, [that] has litigated many ANDA lawsuits in Delaware.” The court further found that Delaware had a significant interest in the dispute because it involved “the pricing and sale of products in Delaware and harms to firms doing business in Delaware, some of them incorporated or with principal places of business in Delaware.”

Judge O’Malley wrote a concurring opinion.  He suggested that the court should have relied upon general jurisdiction over Mylan due to “its voluntary, express consent to such jurisdiction and end our jurisdictional discussion there.”  Judge O’Malley also agreed that Mylan was subject under specific jurisdiction grounds as well, but preferred general jurisdiction because “[a]s Ockham’s razor advises, the simpler path is usually best.”

This opinion is not likely to be the last we will see on the issue.  All parties used noted Supreme Court advocates at the Federal Circuit (Ted Olson for Accorda; Kannon Shanmugam for AstraZeneca; Paul Clement for Mylan) and the case attracted six amicus curiae briefs.  Expect to see a Mylan request for en banc review at the Federal Circuit soon.  Regardless of the outcome of that request, a petition for certiorari to the Supreme Court appears inevitable.  As it stands, however, generic drug companies generally can be sued anywhere in the United States.