Reply Memorandum In Support of Specially Appearing Defendant Bayer Pharma Ags Motion To Quash Service of Summons For Lack of Personal JurisdictionReplyCal. Super. - 1st Dist.October 17, 2016w e a w o o a On 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 Kenneth F. Baum (SBN: 250719) kbaum @goldmanismail.com GOLDMAN ISMAIL TOMASELLI BRENNAN & BAUM LLP 429 Santa Monica Blvd., Ste. 710 Santa Monica, CA 90401 Telephone: (310) 576-6900 Facsimile: (312) 629-8107 Andrew Goldman (admitted pro hac vice) Jennifer Greenblatt (admitted pro hac vice) agoldman@ goldmanismail.com jgreenblatt @ goldmanismail.com ELECTRONICALLY FILED Superior Court of California, County of San Francisco 08/24/2017 Clerk of the Court BY: VANESSA WU Deputy Clerk GOLDMAN ISMAIL TOMASELLI BRENNAN & BAUM LLP 564 W. Randolph St., Ste. 400 Chicago, IL 60661 Telephone: (312) 681-6000 Facsimile: (312) 881-5191 Alicia J. Donahue (SBN: 117412) adonahue @shb.com SHOOK, HARDY & BACON L.L.P. One Montgomery, Ste. 2700 San Francisco, CA 94104 Telephone: (415) 544-1900 Facsimile: (415) 391-0281 Counsel for Specially Appearing Defendant Bayer Pharma AG SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO KATHLEEN GEISSE, Ph.D., CURTIS ULLESEIT and LISA WEHLMANN, Plaintiffs, Vv. BAYER HEALTHCARE PHARMACEUTICALS INC.; BAYER PHARMA AG; BAYER CORPORATION; BAYER HEALTHCARE LLC; McKESSON CORPORATION, MERRY X-RAY CHEMICAL CORPORATION; and DOES 1 through 20, Defendants. Case No. CGC-16-554875 REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS FOR LACK OF PERSONAL JURISDICTION Date: August 31, 2017 Time: 9:30 a.m. Dept. 302 Judge: Judge Harold E. Kahn Reservation Number: 06300727-02 Complaint Filed: October 17, 2016 REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS w e a w o o a On 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 REPLY MEMORANDUM IN SUPPORT Both the Due Process Clause and California law generally require that a legal action be properly served through the Hague Convention before a foreign entity can be charged with answering a complaint. Here, Plaintiffs concede that they did not attempt service directly on Specially Appearing Defendant Bayer Pharma AG - a German company with no California operations - through the Hague Convention, nor have they shown that they are exempt from these well-established rules. Plaintiffs’ assertions that they indirectly served Bayer Pharma AG through non-parties and alleged U.S. affiliates are factually incorrect and legally unsupported. Plaintiffs also fail to offer any evidence that would establish specific jurisdictional contacts to permit this Court to exercise personal jurisdiction over Bayer Pharma AG. Either deficiency warrants granting Bayer Pharma AG’s Motion to Quash. Plaintiffs offer no explanation why their proofs of service falsely claim they served Bayer Pharma AG “by personal service” through a “registered agent.” Indeed, the uncontroverted record proves that there has been no attempt to properly serve Bayer Pharma AG directly or through any entity or person authorized to accept service on its behalf. Instead, Plaintiffs speculate about hypothetical inner workings of various Bayer entities they never attempted to serve in order to argue that service on a different entity constitutes purported proxy for service on behalf of Bayer Pharma AG. Plaintiffs also point to the fact that Bayer Pharma AG filed an answer in an unrelated federal case (Patterson v. Bayer) in which the plaintiff there, unlike the Plaintiffs here, properly served Bayer Pharma AG through the Hague Convention. Compare Opp. p.6, with Parties’ Second Updated Joint Scheduling Report in Patterson v. Bayer (E.D. Cal., No. 1:14-cv-01087), Doc. 40 at p.2 (“Plaintiff’s counsel states that proof of service on Bayer Pharma AG has not been submitted because Plaintiff’s counsel has yet to receive the certificate of service from The Hague.”). Lastly, Plaintiffs cite cases based on different facts interpreting inapplicable Federal Rules of Civil Procedure to ask this Court to order service on lawyers specially appearing to challenge improper service. If Plaintiffs intend to properly serve Bayer Pharma AG or need “to obtain discovery from the German entity” as they claim, Opp. p.5. they need to follow the Hague Convention under California law. Code Civ. Proc., § 413.10, subd. (c) (service “[o]utside the United States” is “subject -1- REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS AN Lh Bs W N to the provisions of the Convention on the ‘Service Abroad of Judicial and Extrajudicial Documents’ in Civil or Commercial Matters (Hague Service Convention)”). While the lack of proper service moots the issue, Bayer Pharma AG’s Motion asserts that there is a lack of personal jurisdiction (whether general or specific jurisdiction), a second independent ground to quash the summons. Plaintiffs concede - as they must - that there is no general jurisdiction over Bayer Pharma AG in this case under the U.S. Supreme Court’s decision in Daimler AG v. Bauman. Opp. at 15. And Plaintiffs fail to offer any evidence, and never identify any facts actually pled in the Complaint, to support specific jurisdiction. That leaves Plaintiffs with insufficient alleged jurisdictional contacts to proceed against Bayer Pharma AG, and provides an additional independent basis to grant this Motion. IL PLAINTIFFS FAIL TO PROVE EFFECTIVE SERVICE ON BAYER PHARMA AG A. Plaintiffs Have Failed to Serve Bayer Pharma AG under the Hague Convention Plaintiffs admit in the Complaint that Bayer Pharma AG is a German-domiciled company. Under California law, to effectuate service on a foreign entity, Plaintiffs must “show that service of process on defendant comported with the Hague Convention regarding service” “or a proper basis for why the Hague Convention did not apply.” Lebel v. Mai (2012) 210 Cal.App.4th 1154, 1160. Plaintiffs do neither here. B. Plaintiffs Have Failed to Serve a “Registered Agent” or “General Manager” of Bayer Pharma AG, as Required by California Law Plaintiffs’ assertion that service on “CSC Lawyers Incorporating Service” “process specialists” was sufficient service on a “registered agent” of Bayer Pharma AG fails because CSC Lawyers Incorporating Service is not a registered agent to accept service on behalf of Bayer Pharma AG, see 06/29/17 Abrams Decl. ISO Bayer Pharma AG Motion to Quash {{ 7, 9 - and such purported service does not comply with or exempt Plaintiffs from the Hague Convention. See Knott v. Superior Court (1996) 45 Cal.App.4th 1126, 1134 (“each signatory nation shall designate a central authority through which service of process may be effected”). Neither does serving a “Jane Doe receptionist” at Bayer HealthCare LLC, who is equally unauthorized to accept service for Bayer Pharma AG, Abrams Decl. { 8. See Dill v. Bergquist Constr. Co. (1994) 24 Cal. App.4th 1426, 1438 1 REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS AN Lh Bs W N (person “authorized to receive mail on behalf of a corporation” not therefore “authorized by the corporation to accept service of process”); see also Gen. Motors Corp. v. Superior Court (1971) 15 Cal. App.3d 81, 84 (customer relations division manager not authorized to accept service for foreign corporation). Here, as in American Express Centurion Bank v. Zara, “the uncontradicted evidence is that the process server did not personally serve defendant.” Am. Exp. Centurion Bank v. Zara (2011) 199 Cal. App.4th 383, 390. Plaintiffs’ continued reliance on inaccurate and conclusory proofs of service is insufficient to satisfy due process service requirements. See Kappel v. Bartlett (1988) 200 Cal. App.3d 1457, 1464-66 (knowingly false declaration of service supports cause of action for abuse of process). Further, Plaintiffs’ assertion that service on an alleged “Jane Doe receptionist” for Bayer HealthCare LLC - a separate U.S. entity - also fails. Bayer HealthCare LLC' is not a “general manager” of Bayer Pharma AG empowered to accept service. Plaintiffs offer no citation to any facts showing Bayer Pharma AG directly owns or controls Bayer HealthCare LI.C and the undisputed evidence shows otherwise. (Abrams Decl. 4 10-13) Cf. Yamaha Motor Co. v. Superior Court (2009) 174 Cal. App.4th 264, 268, 274-75 (holding Japanese manufacturer was properly served process via its “wholly owned domestic subsidiary in the United States,” which official reports called the Japanese company’s “Regional Headquarters for North America”). Nor do Plaintiffs “provide any details” of a “purported sales and marketing relationship” with Bayer Pharma AG that would permit this Court to conclude that any service on Bayer HealthCare LLC satisfies the requirements for proper service on Bayer Pharma AG. See Thomas v. Takeda Pharma. USA, Inc. (E.D. Cal. May 19, 2017, No. 16-cv-01566) 2017 WL 2214956, *5 (holding plaintiff failed to prove US subsidiaries were a “general manager” for service on Japan-based Takeda reasoning webpages cited by plaintiff did “not provide sufficient details showing the day-to-day relationship between Takeda and [the subsidiaries] necessary to evaluate the likelihood Takeda would receive notice of the service, and gives no indication of the subsidiaries’ relationship with California”). ' To no apparent end and without any cite, Plaintiffs speculate on operations of companies they never claimed to serve on Bayer Pharma AG's behalf. See Opp. pp.8-10 (discussing 5 companies Plaintiffs never attempted to serve as Bayer Pharma AG’s supposed general manager or other agent). REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS AN Lh Bs W N Plaintiffs’ only arguments with any accompanying citation boil down to references irrelevant under California law to determine whether Bayer HealthCare LLC is a “general manager” of Bayer Pharma AG: (1) the word “Bayer” is in both companies’ names; (2) Bayer Pharma AG is a foreign company in a complex, multinational organization; (3) Bayer Pharma AG does not have its own US “com” website; and (4) Bayer Pharma AG answered a complaint in an unrelated federal case in which the plaintiff there, unlike the Plaintiffs here, served process by complying with Hague Convention rules. See Opp. pp.6, 8-10; see also Parties” Second Updated Joint Scheduling Report in Patterson v. Bayer (E.D. Cal., No. 1:14-c¢v-01087), Doc. 40 at p.2 (referencing “Plaintiff's counsel” waiting “to receive the certificate of service from The Hague”). None of the case law cited in the Opposition supports finding that Plaintiffs have met their burden of establishing Bayer HealthCare LLC is Bayer Pharma AG’s “general manager.” Indeed, the undisputed fact that Bayer HealthCare LLC 1s a Delaware corporation with its principal place of business in New Jersey, Abrams Decl. | 11, and not a “California-based affiliate of a foreign defendant,” id., demonstrates that Bayer HealthCare LLC cannot be deemed Bayer Pharma AG's “general manager” for service of process. See LA Gem & Jewelry Design, Inc. v. Gold Star Jewellery PVT Ltd. (E.D. Cal. Aug. 11, 2014) 2014 WL 10401936, *2 (“LA Gem has failed to provide evidence that either Goldstar LLC or Independent serves as GSJ's managing agent in California.” (emphasis in original); Yamaha Motor Co. v. Superior Court (2009) 174 Cal. App.4th 264, 267 (“service on the California representative of a foreign parent” is “valid as to the foreign parent [| under California law” (emphasis added)). Finally, Plaintiffs make much of the fact that the lawyers bringing this Motion represent separate US Bayer entities, culminating in their request that “the Court authorize service on Bayer Pharma AG through service on the [US] Bayer Defendants’ counsel.” Opp. p.12. This falls under the umbrella argument that notice and service are somehow interchangeable at the Court’s discretion. Id. California case law, which Plaintiffs fail to cite much less distinguish, holds otherwise: “notice does not substitute for proper service.” Ruttenberg v. Ruttenberg (1997) 53 Cal. App.4th 801, 808. So irrespective of how the federal court decisions Plaintiffs rely on interpret the Federal Rules of Civil Procedure, in California state courts: “Until [California] statutory requirements are satisfied, the court lacks jurisdiction over a defendant.” Ruttenberg, supra 53 Cal.App.4th at 808. There is nothing |. REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS AN Lh Bs W N in California’s service statute that transforms lawyers specially appearing to oppose invalid service into alternative vehicles for service of process. See C.C.P. § 416.10 (containing no such provision). IL PLAINTIFFS FAIL TO ALLEGE MINIMUM JURISDICTIONAL CONTACTS BETWEEN BAYER PHARMA AG AND CALIFORNIA “When a nonresident defendant challenges personal jurisdiction, the plaintiff bears the burden of proof by a preponderance of the evidence to demonstrate the defendant has sufficient minimum contacts with the forum state to justify jurisdiction.” DVI, Inc. v. Superior Court (2002) 104 Cal. App.4th 1080, 109-91 (emphasis added). Mr. Keith Abrams’ sworn declaration in support of this Motion stands entirely unrebutted: “Bayer Pharma AG does not have operations in California.” 06/29/17 Abrams Decl. ISO Bayer Pharma AG Motion to Quash { 6. Plaintiffs offer no evidence to Yr 4 the contrary, which is dispositive since Plaintiffs’ “unverified complaint has no evidentiary value in meeting plaintiff's burden of proving minimum contacts.” DVI, Inc. v. Superior Court, supra, 104 Cal. App.4th at p. 1091. But even if an unverified complaint was acceptable proof, which it is not, Plaintiffs’ allegations in their Complaint fall far short of the bare minimum needed to confer specific personal jurisdiction over Bayer Pharma AG. In their Complaint Plaintiffs never once single out Bayer Pharma AG as having research centers in California. See Compl. {{ 6-7 (“collectively” referring to all manufacturing defendants as “Bayer” and alleging “Bayer” has “principal research centers” in California). Nor could they properly do so given Mr. Abrams’ unrebutted declaration to the contrary. 06/29/17 Abrams Decl. ISO Bayer Pharma AG Motion to Quash { 6. Plaintiffs’ Opposition tries to gloss over this problem by claiming “Defendant has principal research centers” in California. Opp. p.17 (emphasis added). The argument that Bayer Pharma AG must therefore have set up shop in California - again, containing no citations to any record facts - is equally untenable. Opp. p.17. What is left of Plaintiffs’ Opposition argument is one lone sentence relying on one lone allegation in the Complaint that “nationwide” alleged contacts create a “substantial nexus between Plaintiffs’ claims and the company’s contacts in California” to support jurisdiction. See Opp. p.17 (citing ? Like with service of process, Plaintiffs offer no justification as to why this Court should apply federal rules of procedure to evaluate their burden of proof. See Opp. p.17. 5 REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS AN Lh Bs W N Compl. at p.2 J 8). This is not evidence, or even an allegation, that Bayer Pharma AG “targeted the forum,” i.e., California, and it does not matter whether or not Bayer Pharma AG “might have predicted that its goods will reach” California. J. McIntyre Machinery, Ltd. v. Nicastro (2011) 564 U.S. 873, 880-81 (plur. opn. of Kennedy, J.). More significantly, Plaintiffs have made no allegation of any conduct by Bayer Pharma AG in California regarding Magnevist and that such conduct related to the claims by Plaintiffs-the only relevant factor for finding specific jurisdiction under the Supreme Court’s recent decision in Bristol- Myers Squibb Co. v. Superior Court of California (2017) 137 S.Ct. 1773, 1780-81. Cf. Opp. p.17 (referencing alleged research centers with no articulated connection to the product, Magnevist, at issue in this lawsuit). Even assuming arguendo that Bayer Pharma AG conducted other unrelated activity in California, that is immaterial to the specific jurisdiction analysis. See id. (“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 and is therefore subject to the State’s regulation. . . . When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.” (citations and quotations omitted)). Plaintiffs’ academic musings about the “Supreme Court’s discussion of imputation of jurisdiction based on agency in the ‘special’ jurisdiction context”- with no actual proof of agency vis-a-vis Bayer Pharma AG in the context of this lawsuit - is likewise insufficient to confer specific jurisdiction here. See Opp. pp.15-18 (offering no proof). And even assuming arguendo that Plaintiffs offered proof of some agency relationship, under the Supreme Court's decision in Walden v. Fiore: “a defendant’s relationship with a plaintiff or third party, standing alone, is an insufficient basis for [specific] jurisdiction.” Walden v. Fiore (2014) 134 S. Ct. 1115, 1122-23; id. (specific jurisdiction requires suit-related contacts the “defendant himself creates with the forum State” (emphasis in original)). Like the Dow Canada manufacturer the California court lacked specific jurisdiction over in Dow Chemical Canada ULC v. Superior Court, Plaintiffs here allege nothing more than “a foreign company” is involved in “introducing [a product] into interstate commerce.” Compare 10/17/16 Compl. at p.2 8, with Dow Chem. Canada ULC v. Superior Court (2011) 202 Cal.App.4th 170, 179 (“It is not sufficient for jurisdiction in this case that the defendant Dow might have predicted or -6- REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS AN Lh Bs W N known that its products would reach California.”); see also Asahi Metal Industry Co. v. Superior Court of California (1987) 480 U.S. 102, 112 (“[t]he placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum state” and is thus insufficient to establish personal jurisdiction). III. CONCLUSION Bayer Pharma AG respectfully asks this Court to quash service of summons because Plaintiffs failed to properly serve the summons and allege minimum jurisdictional contacts. Dated: August 24, 2017 Respecttully submitted, GOLDMAN ISMAIL TOMASELLI BRENNAN & BAUM LLP By:_/s/ Jennifer Greenblatt Counsel Specially Appearing for Defendant Bayer Pharma AG Fs REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS © 0 0 N N w n ” W N e m N O N O N O N O R N N N O N DN Rm e m e d e a e em ee d ed e m 0 ~~ O N WL Bs W N = O YW C N W N OO PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO I am employed in the County of San Francisco, State of California. I am over the age of 18 and not a party to the within action; my business address is One Montgomery, Ste. 2700, San Francisco, CA 94104. On August 24, 2017, I served the foregoing documents described as: REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS FOR LACK OF PERSONAL JURISDICTION on interested parties in this action by placing a true and correct copy thereof, enclosed in a sealed envelope addressed as follows: ***SEE ATTACHED SERVICE LIST*** [] BY MAIL: I am readily familiar with the business’ practice for collection and processing of correspondence for mailing with the United States Postal Service. I know that the correspondence is deposited with the United States Postal Service on the same day this declaration was executed in the ordinary course of business. I know that the envelope was sealed, and with postage thereon fully prepaid, placed for collection and mailing on this date, following ordinary business practices, in the United States mail at San Francisco, CA. a BY OVERNIGHT DELIVERY: I deposited a true copy of said document(s) and an unsigned copy of this declaration in a sealed envelope, with delivery fees paid or provided for, addressed as follows in a box or other facility regularly maintained by Federal Express, an express service carrier, or delivered to a courier or driver authorized by Federal Express to receive documents. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on August 24, 2017. -_--- v JANE BROGKS -8- PROOF OF SERVICE FOR REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS AN Lh Bs W N SERVICE LIST C. Brooks Cutter Todd A. Walburg Margot P. Cutter CUTTER LAW, P.C. 4179 Piedmont Avenue, 3rd Floor Oakland, CA 94611 Facsimile: (916) 588-9330 Counsel for Plaintiffs Kathleen Geisse, Curtis Ulleseir, and Lisa Wehlmann PROOF OF SERVICE FOR REPLY MEMORANDUM IN SUPPORT OF SPECIALLY APPEARING Alicia J. Donahue SHOOK, HARDY & BACON LLP One Montgomery, Ste. 2700 San Francisco, CA 94104 Facsimile: (415) 391-0281 Counsel for Defendant McKesson Corporation Shoba Dandillaya LEWIS BRISBOIS BISGAARD & SMITH LLP 333 Bush Street, Ste. 1100 San Francisco, CA 94104 Facsimile: (415) 362-2580 Counsel for Defendant Merry X-Ray Chemical Corp. 9- DEFENDANT BAYER PHARMA AG’S MOTION TO QUASH SERVICE OF SUMMONS
