Teva Pharmaceutical Industries v. Ruiz – Jurisdiction at Issue in Foreign Drug Company Liability Lawsuit

When it comes to litigation involving foreign drug companies in product liability claims, there are many complex matters to consider. Such claims on their own typically require an extensive amount of investigation of patient’s medical records and company procedures, and expert witness testimony is usually necessary just to establish there are sufficient issues of fact to get through the courthouse doors. IV

But another hurdle that can be substantial is that of jurisdiction. That is, which court is the appropriate place to bring such a claim. The U.S. Supreme Court recently added two major protections to foreign manufacturers with the recent decisions of J. McIntyre Machinery Ltd. v. Nicastro and Goodyear v. Dunlop Tires Operations. In the first case, the court held 6-3 that simply putting a product in the stream of commerce doesn’t necessarily subject a company to the specific jurisdiction of a court in the state where an accident occurred. In the second case, the court held 9-0 there is no general jurisdiction over a foreign company that doesn’t have continuous, systematic contacts in the state that is attempting to assert jurisdiction.

The issue of jurisdiction was recently raised in a pharmaceutical product litigation case in Florida, before the 2nd DCA, in the case of Teva Pharmaceutical Industries v. Ruiz. It’s become a complex back-and-forth that precludes the case even being decided on its merits. The question is whether a plaintiff, who suffered permanent injury after being given an allegedly contaminated dose of a drug manufactured by the Israeli-based defendant, has grounds to pursue the case in Florida, where the incident occurred. The answer is not a straightforward matter.

Florida statute and case law have designated that in order to establish long-arm jurisdiction over a party, the trial court has to decide whether:

  • There are sufficient jurisdictional facts that bring the action within the purview of F.S. 48.193, (acts subjecting person to jurisdiction of state courts);
  • Non-residential defendant has sufficient minimum contacts in the state to satisfy due process requirements.

Plaintiff alleged that during outpatient surgery, he was given the drug propofol, which was contaminated with some type of bacteria. As a result, he suffered serious and permanent injury. He alleged Teva Pharmaceuticals USA, Inc. – which is a wholly owned subsidiary of Teva Industries – manufactured, distributed, sold or supplied the drug that resulted in his injury. The complaint also asserted that the parent company is a publicly-traded, foreign corporation that does business in Israel, but that exercised 100 percent ownership and control over its subsidiary. Therefore, plaintiff alleged, the parent company is also liable for any torts of the subsidiaries.

Further, plaintiff alleged the parent company regularly conducts business in Florida and it manufactured, distributed sold or supplied the drug in question.

This satisfies the requirement for sufficient facts indicating state court has jurisdiction over defendant. Burden of proof shifts to defendant, which then asserted it doesn’t conduct business in Florida, it isn’t incorporated here, it maintains no branch offices here, no bank accounts, no phone number, address or post office box, owns no land here and has no board members who have never met here. The company occasionally pays expenses of subsidiaries, but those expenses are ultimately allocated to the subsidiary. The appeals court found this affidavit was sufficient to refute plaintiff’s assertions, so then the burden of proof then shifted back to the plaintiff.

Plaintiff countered with numerous documents in opposition to defendant’s motion to dismiss for jurisdiction. Evidence presented was substantial, and included diagrams of the corporate structure of the entity, which asserted defendant had 100 percent ownership and control of subsidiaries.

Trial court at this point was required to hold a hearing to weigh all this evidence. But while the court did have a hearing on the motion to dismiss, it didn’t accept any evidence or testimony. The court denied the motion to dismiss, and defense appealed.

The appellate court reversed and remanded. The trial court should have held a proper hearing to weigh all the disputed factual evidence before making its decision, the appeals panel ruled.

If you have been injured in West Palm Beach, contact the Hollander Law Firm at 888-751-7777 for a free and confidential consultation. There is no fee unless we win.

Additional Resources:

Teva Pharmaceutical Industries v. Ruiz, Oct. 16, 2015, Florida’s Second District Court of Appeal

More Blog Entries:

Study: Late, Wrong Diagnosis Affects Majority of Americans, Oct. 23, 2015, West Palm Beach Defective Drug Lawyer Blog