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Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 1 of 13. PageID #: 287948
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
IN RE: NATIONAL PRESCRIPTION ) MDL 2804
OPIATE LITIGATION )
) Case No. 1:17-md-2804
THIS DOCUMENT RELATES TO: )
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) Judge Dan Aaron Polster
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County of Summit, et al. v. Purdue Pharma )
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L.P., et al, Case No. 1:18-op-45090 ) OPINION & ORDER
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Before the Court are five motions: Defendant Allergan plc’s Motion to Dismiss for Lack of
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Jurisdiction (“Allergan plc’s Motion”), Doc #: 1258, Defendant Teva Pharmaceutical Industries Ltd.’s
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(“Teva Ltd.”) Motion to Dismiss for Lack of Jurisdiction (“Teva Ltd.’s Motion”), Doc #: 1264,
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Defendant Mallinckrodt plc’s Motion by Special Appearance to Dismiss the Corrected Second Amended
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Complaint for Lack of Personal Jurisdiction (“Mallinckrodt plc’s Motion”), Doc #: 1266, Mallinckrodt
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plc’s Motion to Strike the Expert Report of Alec Fahey (“Mallinckrodt plc’s Motion to Strike”),
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Doc #: 1836, and Teva Ltd.’s Motion to Strike the Expert Report of Alec Fahey (“Teva Ltd.’s Motion
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to Strike”), Doc #: 2082. For the following reasons, Mallinckrodt plc’s Motion to Strike and Teva Ltd.’s
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Motion to Strike are GRANTED. All three motions to dismiss are hereby DENIED WITHOUT
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PREJUDICE.
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I. Background
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Plaintiffs retained CPA Alec Fahey on January 2, 2019 to provide forensic accounting services
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to “determine whether Mallinckrodt plc [] controls and dominates its subsidiaries” and “whether [Teva
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Ltd.] controls and dominates its subsidiaries[.]” See Doc #: 1717-3; 1815-2. On January 15, 2019,
Allergan plc, Teva Ltd., and Mallinckrodt plc all filed the instant motions to dismiss. Doc #: 1258, 1264,
and 1266. The Court granted Mallinckrodt plc’s Motion for Leave to file its motion on January 17, 2019.
Doc #: 1279. On January 25, 2019, Plaintiffs served Mallinckrodt plc with forty-two Requests for
Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 2 of 13. PageID #: 287949
Production and twenty-six Interrogatories—all relating to personal jurisdiction. See Doc #: 1836-5 and
1836-6. On February 13, 2019, Plaintiffs filed a Motion for Extension of Time to respond to the three
motions to dismiss “in light of Special Master Cohen’s oral ruling on February 12, 2019, ordering
Defendants to respond to discovery on the specific topic of personal jurisdiction.” Doc #: 1365.
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Plaintiffs requested that they be permitted to respond to the motions once they completed jurisdictional
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discovery. Id. The Court granted Plaintiffs’ Motion for Extension of Time on February 15, 2019 and
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directed the parties to meet and confer with Special Master Cohen to determine to what extent personal
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jurisdiction discovery needed to be taken. Doc #: 1372.
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On March 25, 2019, Plaintiffs disclosed and submitted reports for their Track One experts, as
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required by Case Management Order (“CMO”) 8, Doc #: 1306. Plaintiffs did not disclose Fahey as an
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expert. On April 3, 2019, Special Master Cohen Bu
issued a Ruling requiring the parties to conduct the
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“agreed-upon jurisdictional discovery.” Doc #: 1512 at 6. The Ruling set Plaintiffs’ Response deadline
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for all three motions for June 5, 2019. Id. at 10. On June 6, 2019, the parties filed a Stipulated Motion
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for Extension of Deadlines, requesting that Plaintiffs’ Response deadline for Mallinckrodt plc’s Motion
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and Allergan plc’s Motion be extended to June 21, 2019 and Plaintiffs Response deadline for Teva Ltd.’s
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Motion be extended to July 5, 2019. Doc #: 1660. The parties also requested that Mallinckrodt plc and
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Allergan plc’s Reply deadline be extended to July 12, 2019 and Teva Ltd.’s be extended to July 19,
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2019. Id. The Court granted this second motion for extension. Doc #: 1661. Plaintiffs filed their
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Response to Mallinckrodt plc’s Motion on June 21, 2019 with the Affidavit of Alec Fahey attached as
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Exhibit 3. Doc #: 1717. On June 27, 2019, the Court granted Plaintiffs and Allergan plc another
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extension of time, setting Plaintiffs’ Response deadline for July 9, 2019 and Allergan plc’s Reply
deadline for July 30, 2019. Doc #: 1744. The parties filed Letter Briefs on July 2, 2019, in compliance
with the Court’s request for a short summary of the basis for the Motion. See Doc #: 1836-8. In
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Mallinckrodt plc’s Letter Brief, it requested additional jurisdictional discovery, including taking Fahey’s
deposition. Id.
On July 3, 2019, the Court issued a Non-Document Order denying any further requests for
additional jurisdictional discovery and directing the parties to comply with the current briefing schedule.
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That same day, the Court granted Plaintiffs and Teva Ltd. another extension of time, setting Plaintiffs’
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Response deadline for July 9, 2019 and Teva Ltd.’s Reply deadline for July 30, 2019. Doc #: 1804. On
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July 5, 2019, Mallinckrodt plc filed a Motion to Clarify the Court’s July 3, 2019 Order. Doc #: 1814.
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Also on July 5, 2019, Plaintiffs filed their Response to Teva Ltd.’s Motion. Doc #: 1815. The Court
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issued another Non-Document Order on July 8, 2019, clarifying that its order was not meant to prohibit
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Mallinckrodt plc from filing a motion to strike Fahey’s Affidavit. On July 9, 2019, Plaintiffs filed their
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Response to Allergan plc’s Motion. Doc #: 1823. Bu
On July 12, 2019, Mallinckrodt plc filed its Reply
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brief, Doc #: 1835, and a Motion to Strike the Expert Report of Alec Fahey, Doc #: 1836. Plaintiffs filed
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a Response brief to Mallinckrodt plc’s Motion to Strike, Doc #: 2065, on July 27, 2019. Allergan plc
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filed its Reply on July 30, 2019. Doc #: 2079. So did Teva Ltd. Doc #: 2081. Teva Ltd. also filed its
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motion to strike on July 30, 2019. Doc #: 2082.
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Now, over six months after these motions to dismiss were filed and three extensions of time later,
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these motions are fully briefed before the Court.
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II. Analysis
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A. Motion to Strike
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As recited in § I(A), Plaintiffs retained CPA Alec Fahey on January 2, 2019 to provide forensic
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accounting services to “determine whether Mallinckrodt plc [] controls and dominates its subsidiaries”
and “whether [Teva Ltd.] controls and dominates its subsidiaries[.]” See Doc #: 1717-3; 1815-2. On
January 29, 2019, the Court issued its Case Management Order No. 8, setting Plaintiffs’ deadline to serve
their expert reports for March 25, 2019. Doc #: 1306 at 1. Plaintiffs’ expert report disclosures did not
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include Alec Fahey. Plaintiffs did not disclose Fahey’s Affidavits until they filed their Response briefs
on June 21, 2019 and July 15, 2019. See Doc #: 1717-3; 1815-2. Thus, Mallinckrodt plc and Teva Ltd.
moved to strike the Fahey Affidavit as untimely. See Doc #: 1836; 2082.
Federal Rule of Civil Procedure 26(a)(2) requires a party to disclose its testifying witnesses “at
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the time and in the sequence that the court orders.” FED. R. CIV. P 26(a)(2)(A); FED. R. CIV. P
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26(a)(2)(D). In this case, the Court-ordered disclosure deadline was March 25, 2019. “District courts
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have broad discretion to exclude untimely disclosed expert-witness testimony.” Pride v. BIC Corp., 218
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F.3d 566, 578 (6th Cir. 2000). The Court finds excluding an expert witness’s untimely testimony
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especially appropriate where, as in this case, Plaintiffs retained the expert months before the expert report
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deadline. Plaintiffs argue in their Response to Mallinckrodt’s Motion to Strike that any delays in
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disclosing Fahey’s Affidavit were caused by Mallinckrodt’s persistent refusal to accept service of the
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complaints in the litigation. Mot. to Strike Opp. at 7. However, Plaintiffs retained Fahey on January 2,
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2019—over two months before the expert disclosure deadline on March 25, 2019. Plaintiffs provide no
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explanation for why they did not disclose Fahey before the expert disclosure deadline. Thus, the Court
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agrees with Mallinckrodt plc and Teva Ltd. that Fahey’s Affidavits should be stricken. The Court will
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only consider those Exhibits to Fahey’s Affidavits that have not been created by Fahey. Accordingly,
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Mallinckrodt plc’s Motion to Strike, Doc #: 1836, and Teva Ltd.’s Motion to Strike, Doc #: 2082, are
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hereby GRANTED.
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B. Motions to Dismiss for Lack of Personal Jurisdiction
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1. Standard
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“To survive a motion to dismiss for lack of personal jurisdiction under FED. R. CIV. P. 12(b)(2),
a plaintiff must prove that jurisdiction is proper over each defendant individually.” SFS Check, LLC v.
First Bank of Delaware, 774 F.3d 351, 355–56 (6th Cir. 2014) (citation omitted). In ruling upon a
motion to dismiss for lack of personal jurisdiction, the district court has three procedural alternatives:
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“[it] may determine the motion on the basis of affidavits alone; or it may permit discovery in aid of the
motion; or it may conduct an evidentiary hearing on the merits of the motion.” SFS Check, LLC v. First
Bank of Delaware, 990 F. Supp. 2d 762, 769 (E.D. Mich. 2013). “When, as here, the district court allows
discovery on the motion, the court should consider the facts offered by both parties and rule according
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to the preponderance of the evidence.” Id. at 356 (citing Serras v. First Tenn. Bank Nat’l Ass’n, 875
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F.2d 1212, 1214 (6th Cir.1989)). Additionally, an evidentiary hearing may be conducted “if the district
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court concludes that the written submissions have raised issues of credibility or disputed issues of fact
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which require resolution[.]” American Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir.1988).
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Judicial resources may be more efficiently deployed if the court holds but one hearing on the contested
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facts. Serras v. First Tennessee Bank Nat. Ass’n, 875 F.2d 1212, 1215 (6th Cir. 1989) (citation omitted).
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Thus, a court may combine a personal jurisdiction evidentiary hearing with the trial on the merits. Sledge
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v. Indico Sys. Res., Inc., 68 F. Supp. 3d 834, 839 (W.D. Tenn. 2014). However, “[t]he decision to
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exercise personal jurisdiction is a question of law based on the Due Process Clause of the Constitution.”
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Bridgeport Music, Inc. v. Still N The Water Pub., 327 F.3d 472, 477 (6th Cir. 2003) (internal quotation
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omitted). As such, personal jurisdiction is a question to be determined by the Court, not by a jury.
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Plaintiffs argue that Allergan plc, Mallinckrodt plc, and Teva Ltd. are subject to jurisdiction in
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this Court pursuant to two legal theories: alter ego liability and successor jurisdiction. 1 The Court will
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address these theories in turn.
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2. Alter Ego Liability
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Each of the three defendants are foreign corporations. Mallinckrodt plc and Allergan plc are
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Irish corporations. Teva Ltd. is an Israeli corporation. No defendant has disputed that they each have
subsidiaries who are subject to personal jurisdiction in Ohio and that such jurisdiction comports with
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Plaintiffs do not argue that Allergan plc should be subject to personal jurisdiction in this Court pursuant to the alter ego
theory of liability.
Thus, the Court only addresses alter ego liability as to Mallinckrodt plc and Teva Ltd.
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Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 6 of 13. PageID #: 287953
due process. These subsidiary entities are all defendants in the Track One cases set for trial on October
21, 2019. Likewise, Plaintiffs are not contending that any of the three foreign defendants has
independent contacts with the State of Ohio. Plaintiffs do contend that Mallinckrodt plc and Teva Ltd.
are the “alter egos” of their subsidiaries. The Sixth Circuit has held that “[t]he alter-ego theory provides
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for personal jurisdiction ‘if the parent company exerts so much control over the subsidiary that the two
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do not exist as separate entities but are one and the same for purposes of jurisdiction.’” Anwar v. Dow
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Chem. Co., 876 F.3d 841, 848 (6th Cir. 2017) (citation omitted). In determining whether a subsidiary is
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an alter ego of the parent corporation, Ohio courts consider factors such as whether (1) corporate
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formalities are observed, (2) corporate records are kept, and (3) the corporation is financially
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independent. Estate of Thomson ex rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545 F.3d
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357, 362–63 (6th Cir. 2008) (citing Microsys Computing, Inc. v. Dynamic Data Sys., LLC, No. 4:05 CV
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2205, 2006 WL 2225821, *6 (N.D. Ohio Aug. 2, 2006)).
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Courts in the Sixth Circuit also consider additional factors such as (1) sharing the same
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employees and corporate officers; (2) engaging in the same business enterprise; (3) having the same
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address and phone lines; (4) using the same assets; (5) completing the same jobs; (6) not maintaining
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separate books, tax returns and financial statements; and (7) exerting control over the daily affairs of
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another corporation. See id. None of the Sixth Circuit or Ohio factors are alone sufficient to establish
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alter ego liability. Plaintiffs only address the Sixth Circuit factors in their Mallinckrodt plc and Teva
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Ltd. Response briefs. Other courts in the Sixth Circuit have relied solely on these Sixth Circuit factors
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so the Court finds that addressing the Sixth Circuit factors is sufficient for the alter ego analysis. See
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e.g., Estate of Thomson ex rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545 F.3d 357,
362–63 (6th Cir. 2008) (citing Microsys Computing, Inc. v. Dynamic Data Sys., LLC, No. 4:05 CV 2205,
2006 WL 2225821, *6 (N.D. Ohio Aug. 2, 2006)).
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Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 7 of 13. PageID #: 287954
a. Mallinckrodt plc
Mallinckrodt plc is an Irish public limited company headquartered in the United Kingdom. Doc
#: 1266; Fenlon Aff. ¶ 2. Mallinckrodt plc is a holding company and the ultimate parent company of
Mallinckrodt LLC and SpecGx LLC. Id. Mallinckrodt LLC and SpecGx LLC are both Delaware limited
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liability companies headquartered in St. Louis, Missouri. Id. at ¶¶ 10-11. Mallinckrodt LLC and SpecGx
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LLC both have sold opioids in the United States; Mallinckrodt plc has not. Id. at ¶ 3. Mallinckrodt plc
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does not dispute that Mallinckrodt LLC and SpecGx LLC are subject to personal jurisdiction in the Track
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One cases. Rather, Mallinckrodt plc asserts that this Court does not have jurisdiction over it as an indirect
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parent company with no contacts with the United States. However, Plaintiffs assert that Mallinckrodt
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LLC and/or SpecGx LLC are the alter-egos of Mallinckrodt plc. Thus, the Court must consider the facts
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of the alter-ego analysis. Plaintiffs do not argue that Bu
two of the alter ego factors—having the same
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address and phones lines, and completing the same jobs—are satisfied. Plaintiffs only address the
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remaining five Sixth Circuit factors so the Court will only consider these.
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Plaintiffs first assert that Mallinckrodt LLC and/or SpecGx LLC are the alter-egos of
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Mallinckrodt plc because they share the same employees and corporate officers. Mallinckrodt Opp. at
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11. For example, Plaintiffs argue that Michael-Bryant Hicks serves as Senior Vice President & General
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Counsel for both Mallinckrodt LLC and Mallinckrodt plc. Id. Plaintiffs rely on a 2017 DOJ/DEA
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settlement agreement that they allege Hicks signed on behalf of both entities. See id.; Fahey Ex. 7 at 14.
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However, Mallinckrodt plc’s current Vice President, Corporate Secretary, and General Counsel
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Stephanie Miller signed a sworn affidavit that Hicks has never served as an officer of Mallinckrodt LLC
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and only signed the settlement agreement in his capacity as Senior Vice President & General Counsel of
Mallinckrodt plc, pursuant to a delegation of authority. Miller Aff. ¶ 8. Plaintiffs allege that both
SpecGx LLC and Mallinckrodt LLC have several other common officers with Mallinckrodt plc but
Plaintiffs fail to cite specific documentation other than Fahey’s Affidavit to support their assertions.
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Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 8 of 13. PageID #: 287955
Plaintiffs also allege that Mallinckrodt plc, SpecGx LLC, and Mallinckrodt LLC engage in the
same business enterprise. Mallinckrodt Opp. at 12-13. However, Mallinckrodt plc has never marketed,
sold, manufactured, or distributed prescription opiates in Ohio, the United States, or anywhere else. Doc
#: 1266; Fenlon Aff. at ¶ 3. Nor is Mallinckrodt plc registered with the United States Drug Enforcement
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Administration to manufacture or sell opioid drugs. Id. However, the Mallinckrodt family of companies
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appears to file its securities information as a global enterprise. See Mallinckrodt Opp at 13-14. As far
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as using the same assets, Plaintiffs allege that Mallinckrodt plc does use the same assets as its subsidiaries
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and Mallinckrodt plc disputes this. The parties also dispute the extent that Mallinckrodt plc and its
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subsidiaries maintain separate books, tax returns, and financial statements, and whether this is normal
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corporate practice or evidence of the Mallinckrodt entities acting together as one. Lastly, the parties
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dispute the extent to which Mallinckrodt plc controls Bu
the daily affairs of Mallinckrodt LLC and/or
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SpecGx LLC. Plaintiffs allege that Mallinckrodt plc controls its subsidiaries’ marketing and sales
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strategies, promotional efforts, intellectual property rights and enforcement thereof, etc. See
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Mallinckrodt Opp. at 16; Fahey Ex. 16 at 9. Mallinckrodt plc argues that any evidence Plaintiffs claim
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shows its control over its subsidiaries’ daily affairs is consistent with normal managerial oversight that
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all corporate parents and majority shareholders provide to their subsidiaries. See Mallinckrodt Reply at
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12. Thus, the parties dispute and offer conflicting evidence for each of the five alter ego factors Plaintiffs
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addressed. Ultimately, the Court finds that the issue of whether SpecGx LLC and/or Mallinckrodt LLC
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are alter-egos of Mallinckrodt plc should be litigated in the Track One trial.
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b. Teva Ltd.
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Teva Ltd. is a public limited company incorporated under the laws of Israel and headquartered
in Petah Tikva, Israel. Doc #: 1264-2; West Dec. ¶ 2. Teva Ltd. has no office, property, employees, or
registered agent in the United States and does not transact business in the United States. Id. Teva USA,
a subsidiary of Teva Ltd., is a Delaware corporation with its principal place of business in North Wales,
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Pennsylvania. Doc #: 1465; Third Amended Complaint (“TAC”) ¶ 68. Teva USA sold opioids in the
United States from 2005-2009. Id. Cephalon, Inc. is a Delaware corporation with its principal place of
business in Frazer, Pennsylvania. Id. at ¶ 69. In 2011, Teva Ltd. acquired Cephalon, Inc. Id. Cephalon,
Inc. is also in the business of manufacturing, distributing, and selling opioids in the United States. Id. at
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¶ 70. Plaintiffs argue that Cephalon, Inc. and Teva USA are alter egos of Teva Ltd.
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Plaintiffs assert that Teva Ltd. and Teva USA share the same employees and corporate officers.
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Teva Opp. at 7. For example, Debra Barrett, as Teva USA employee, coordinated and directed advocacy,
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lobbying, and policy development across the entire Teva group of companies. Id. at 8. Teva Ltd.
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counters that any sharing of employees or corporate officers between it and Teva USA or Cephalon, Inc.
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is through arms-length agreements. Teva Reply at 11. Plaintiffs also argue that Teva Ltd. and Teva
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USA engage in the same business enterprise because Teva Ltd. controls the operations of its subsidiaries
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through an integrated management team via Global Divisions. Teva Opp. at 8. Plaintiffs further contend
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that Teva Ltd. and Teva USA use the same assets, in part because they file consolidated financial results
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with the Securities & Exchange Commission. Id. at 9. Teva Ltd. responds that its SEC filings comport
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with the SEC’s regulatory specifications and is common practice among parent-subsidiary relationships.
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Teva Reply at 13. Finally, Plaintiffs maintain that Teva Ltd. controls the daily activities of Teva USA.
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Teva Opp. at 12. Plaintiffs state that Teva Ltd.’s CEO has to ultimately approve whether or not Teva
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USA launches an opioid product in the United States. Id. at 13. Teva Ltd. claims that what Plaintiffs
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state are daily activities are really examples of high-level oversight. Teva Reply at 19. Given these
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significant factual disputes, the Court defers deciding whether Teva USA and/or Cephalon, Inc. are alter
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egos of Teva Ltd until after the Track One trial.
3. Successor Liability
Plaintiffs argue that Allergan plc, Teva Ltd., and Mallinckrodt plc are also all subject to personal
jurisdiction under successor liability. The Sixth Circuit has explained that “it is compatible with due
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process for a court to exercise personal jurisdiction over ... an alter ego or successor of a corporation that
would be subject to personal jurisdiction in that court.” Estate of Thomson v. Toyota Motor Corp.
Worldwide, 545 F.3d 357, 362 (6th Cir. 2008). The parties agree that Ohio law dictates the rules of
successor liability in this case. In Ohio, “[t]he well-recognized general rule of successor liability
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provides that the purchaser of a corporation’s assets is not liable for the debts and obligations of the
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seller corporation.” Welco Indus., Inc. v. Applied Cos., 617 N.E.2d 1129, 1132 (1993) (citation omitted).
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The Ohio Supreme Court has identified four discrete exceptions to the general rule when: “(1) the buyer
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expressly or impliedly agrees to assume such liability; (2) the transaction amounts to a de facto
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consolidation or merger; (3) the buyer corporation is merely a continuation of the seller corporation; or
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(4) the transaction is entered into fraudulently for the purpose of escaping liability.” Id. at 1133.
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a. Allergan plc Bu
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Allergan plc was originally incorporated under the name Actavis plc in Ireland on May 16, 2013.
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Doc #: 1258-2; Arecca Aff. ¶ 5. In June 2015, Actavis plc changed its corporate name to Allergan plc.
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Id. Allergan plc is a corporation incorporated under the laws of the Republic of Ireland. Id. at ¶ 4.
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Allergan plc’s headquarters are in Dublin, Ireland and it maintains administrative headquarters in
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Madison, New Jersey. Doc #: 2079-1; Arecca Aff. ¶ 3. Allergan Finance, LLC (formerly Actavis, Inc.)
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is a limited liability company incorporated in Nevada and headquartered in Madison, New
Preview
Un of fic ial C op y O ffic e of M ar ily EXHIBIT n Bu D rg es sD ist ric tC ler k Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 1 of 13. PageID #: 287948 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION IN RE: NATIONAL PRESCRIPTION ) MDL 2804 OPIATE LITIGATION ) ) Case No. 1:17-md-2804 THIS DOCUMENT RELATES TO: ) k ) Judge Dan Aaron Polster ler County of Summit, et al. v. Purdue Pharma ) tC L.P., et al, Case No. 1:18-op-45090 ) OPINION & ORDER ric ist Before the Court are five motions: Defendant Allergan plc’s Motion to Dismiss for Lack of sD Jurisdiction (“Allergan plc’s Motion”), Doc #: 1258, Defendant Teva Pharmaceutical Industries Ltd.’s es (“Teva Ltd.”) Motion to Dismiss for Lack of Jurisdiction (“Teva Ltd.’s Motion”), Doc #: 1264, rg Bu Defendant Mallinckrodt plc’s Motion by Special Appearance to Dismiss the Corrected Second Amended n Complaint for Lack of Personal Jurisdiction (“Mallinckrodt plc’s Motion”), Doc #: 1266, Mallinckrodt ily ar plc’s Motion to Strike the Expert Report of Alec Fahey (“Mallinckrodt plc’s Motion to Strike”), M Doc #: 1836, and Teva Ltd.’s Motion to Strike the Expert Report of Alec Fahey (“Teva Ltd.’s Motion of e to Strike”), Doc #: 2082. For the following reasons, Mallinckrodt plc’s Motion to Strike and Teva Ltd.’s ffic Motion to Strike are GRANTED. All three motions to dismiss are hereby DENIED WITHOUT yO PREJUDICE. op C I. Background ial Plaintiffs retained CPA Alec Fahey on January 2, 2019 to provide forensic accounting services fic of to “determine whether Mallinckrodt plc [] controls and dominates its subsidiaries” and “whether [Teva Un Ltd.] controls and dominates its subsidiaries[.]” See Doc #: 1717-3; 1815-2. On January 15, 2019, Allergan plc, Teva Ltd., and Mallinckrodt plc all filed the instant motions to dismiss. Doc #: 1258, 1264, and 1266. The Court granted Mallinckrodt plc’s Motion for Leave to file its motion on January 17, 2019. Doc #: 1279. On January 25, 2019, Plaintiffs served Mallinckrodt plc with forty-two Requests for Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 2 of 13. PageID #: 287949 Production and twenty-six Interrogatories—all relating to personal jurisdiction. See Doc #: 1836-5 and 1836-6. On February 13, 2019, Plaintiffs filed a Motion for Extension of Time to respond to the three motions to dismiss “in light of Special Master Cohen’s oral ruling on February 12, 2019, ordering Defendants to respond to discovery on the specific topic of personal jurisdiction.” Doc #: 1365. k Plaintiffs requested that they be permitted to respond to the motions once they completed jurisdictional ler discovery. Id. The Court granted Plaintiffs’ Motion for Extension of Time on February 15, 2019 and tC ric directed the parties to meet and confer with Special Master Cohen to determine to what extent personal ist jurisdiction discovery needed to be taken. Doc #: 1372. sD On March 25, 2019, Plaintiffs disclosed and submitted reports for their Track One experts, as es required by Case Management Order (“CMO”) 8, Doc #: 1306. Plaintiffs did not disclose Fahey as an rg expert. On April 3, 2019, Special Master Cohen Bu issued a Ruling requiring the parties to conduct the n “agreed-upon jurisdictional discovery.” Doc #: 1512 at 6. The Ruling set Plaintiffs’ Response deadline ily ar for all three motions for June 5, 2019. Id. at 10. On June 6, 2019, the parties filed a Stipulated Motion M for Extension of Deadlines, requesting that Plaintiffs’ Response deadline for Mallinckrodt plc’s Motion of e and Allergan plc’s Motion be extended to June 21, 2019 and Plaintiffs Response deadline for Teva Ltd.’s ffic Motion be extended to July 5, 2019. Doc #: 1660. The parties also requested that Mallinckrodt plc and yO Allergan plc’s Reply deadline be extended to July 12, 2019 and Teva Ltd.’s be extended to July 19, op C 2019. Id. The Court granted this second motion for extension. Doc #: 1661. Plaintiffs filed their ial Response to Mallinckrodt plc’s Motion on June 21, 2019 with the Affidavit of Alec Fahey attached as fic Exhibit 3. Doc #: 1717. On June 27, 2019, the Court granted Plaintiffs and Allergan plc another of Un extension of time, setting Plaintiffs’ Response deadline for July 9, 2019 and Allergan plc’s Reply deadline for July 30, 2019. Doc #: 1744. The parties filed Letter Briefs on July 2, 2019, in compliance with the Court’s request for a short summary of the basis for the Motion. See Doc #: 1836-8. In 2 Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 3 of 13. PageID #: 287950 Mallinckrodt plc’s Letter Brief, it requested additional jurisdictional discovery, including taking Fahey’s deposition. Id. On July 3, 2019, the Court issued a Non-Document Order denying any further requests for additional jurisdictional discovery and directing the parties to comply with the current briefing schedule. k That same day, the Court granted Plaintiffs and Teva Ltd. another extension of time, setting Plaintiffs’ ler Response deadline for July 9, 2019 and Teva Ltd.’s Reply deadline for July 30, 2019. Doc #: 1804. On tC ric July 5, 2019, Mallinckrodt plc filed a Motion to Clarify the Court’s July 3, 2019 Order. Doc #: 1814. ist Also on July 5, 2019, Plaintiffs filed their Response to Teva Ltd.’s Motion. Doc #: 1815. The Court sD issued another Non-Document Order on July 8, 2019, clarifying that its order was not meant to prohibit es Mallinckrodt plc from filing a motion to strike Fahey’s Affidavit. On July 9, 2019, Plaintiffs filed their rg Response to Allergan plc’s Motion. Doc #: 1823. Bu On July 12, 2019, Mallinckrodt plc filed its Reply n brief, Doc #: 1835, and a Motion to Strike the Expert Report of Alec Fahey, Doc #: 1836. Plaintiffs filed ily ar a Response brief to Mallinckrodt plc’s Motion to Strike, Doc #: 2065, on July 27, 2019. Allergan plc M filed its Reply on July 30, 2019. Doc #: 2079. So did Teva Ltd. Doc #: 2081. Teva Ltd. also filed its of e motion to strike on July 30, 2019. Doc #: 2082. ffic Now, over six months after these motions to dismiss were filed and three extensions of time later, yO these motions are fully briefed before the Court. op C II. Analysis ial A. Motion to Strike fic As recited in § I(A), Plaintiffs retained CPA Alec Fahey on January 2, 2019 to provide forensic of Un accounting services to “determine whether Mallinckrodt plc [] controls and dominates its subsidiaries” and “whether [Teva Ltd.] controls and dominates its subsidiaries[.]” See Doc #: 1717-3; 1815-2. On January 29, 2019, the Court issued its Case Management Order No. 8, setting Plaintiffs’ deadline to serve their expert reports for March 25, 2019. Doc #: 1306 at 1. Plaintiffs’ expert report disclosures did not 3 Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 4 of 13. PageID #: 287951 include Alec Fahey. Plaintiffs did not disclose Fahey’s Affidavits until they filed their Response briefs on June 21, 2019 and July 15, 2019. See Doc #: 1717-3; 1815-2. Thus, Mallinckrodt plc and Teva Ltd. moved to strike the Fahey Affidavit as untimely. See Doc #: 1836; 2082. Federal Rule of Civil Procedure 26(a)(2) requires a party to disclose its testifying witnesses “at k the time and in the sequence that the court orders.” FED. R. CIV. P 26(a)(2)(A); FED. R. CIV. P ler 26(a)(2)(D). In this case, the Court-ordered disclosure deadline was March 25, 2019. “District courts tC ric have broad discretion to exclude untimely disclosed expert-witness testimony.” Pride v. BIC Corp., 218 ist F.3d 566, 578 (6th Cir. 2000). The Court finds excluding an expert witness’s untimely testimony sD especially appropriate where, as in this case, Plaintiffs retained the expert months before the expert report es deadline. Plaintiffs argue in their Response to Mallinckrodt’s Motion to Strike that any delays in rg Bu disclosing Fahey’s Affidavit were caused by Mallinckrodt’s persistent refusal to accept service of the n complaints in the litigation. Mot. to Strike Opp. at 7. However, Plaintiffs retained Fahey on January 2, ily ar 2019—over two months before the expert disclosure deadline on March 25, 2019. Plaintiffs provide no M explanation for why they did not disclose Fahey before the expert disclosure deadline. Thus, the Court of e agrees with Mallinckrodt plc and Teva Ltd. that Fahey’s Affidavits should be stricken. The Court will ffic only consider those Exhibits to Fahey’s Affidavits that have not been created by Fahey. Accordingly, yO Mallinckrodt plc’s Motion to Strike, Doc #: 1836, and Teva Ltd.’s Motion to Strike, Doc #: 2082, are op C hereby GRANTED. ial B. Motions to Dismiss for Lack of Personal Jurisdiction fic 1. Standard of Un “To survive a motion to dismiss for lack of personal jurisdiction under FED. R. CIV. P. 12(b)(2), a plaintiff must prove that jurisdiction is proper over each defendant individually.” SFS Check, LLC v. First Bank of Delaware, 774 F.3d 351, 355–56 (6th Cir. 2014) (citation omitted). In ruling upon a motion to dismiss for lack of personal jurisdiction, the district court has three procedural alternatives: 4 Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 5 of 13. PageID #: 287952 “[it] may determine the motion on the basis of affidavits alone; or it may permit discovery in aid of the motion; or it may conduct an evidentiary hearing on the merits of the motion.” SFS Check, LLC v. First Bank of Delaware, 990 F. Supp. 2d 762, 769 (E.D. Mich. 2013). “When, as here, the district court allows discovery on the motion, the court should consider the facts offered by both parties and rule according k to the preponderance of the evidence.” Id. at 356 (citing Serras v. First Tenn. Bank Nat’l Ass’n, 875 ler F.2d 1212, 1214 (6th Cir.1989)). Additionally, an evidentiary hearing may be conducted “if the district tC ric court concludes that the written submissions have raised issues of credibility or disputed issues of fact ist which require resolution[.]” American Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir.1988). sD Judicial resources may be more efficiently deployed if the court holds but one hearing on the contested es facts. Serras v. First Tennessee Bank Nat. Ass’n, 875 F.2d 1212, 1215 (6th Cir. 1989) (citation omitted). rg Bu Thus, a court may combine a personal jurisdiction evidentiary hearing with the trial on the merits. Sledge n v. Indico Sys. Res., Inc., 68 F. Supp. 3d 834, 839 (W.D. Tenn. 2014). However, “[t]he decision to ily ar exercise personal jurisdiction is a question of law based on the Due Process Clause of the Constitution.” M Bridgeport Music, Inc. v. Still N The Water Pub., 327 F.3d 472, 477 (6th Cir. 2003) (internal quotation of e omitted). As such, personal jurisdiction is a question to be determined by the Court, not by a jury. ffic Plaintiffs argue that Allergan plc, Mallinckrodt plc, and Teva Ltd. are subject to jurisdiction in yO this Court pursuant to two legal theories: alter ego liability and successor jurisdiction. 1 The Court will op C address these theories in turn. ial 2. Alter Ego Liability fic Each of the three defendants are foreign corporations. Mallinckrodt plc and Allergan plc are of Un Irish corporations. Teva Ltd. is an Israeli corporation. No defendant has disputed that they each have subsidiaries who are subject to personal jurisdiction in Ohio and that such jurisdiction comports with 1 Plaintiffs do not argue that Allergan plc should be subject to personal jurisdiction in this Court pursuant to the alter ego theory of liability. Thus, the Court only addresses alter ego liability as to Mallinckrodt plc and Teva Ltd. 5 Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 6 of 13. PageID #: 287953 due process. These subsidiary entities are all defendants in the Track One cases set for trial on October 21, 2019. Likewise, Plaintiffs are not contending that any of the three foreign defendants has independent contacts with the State of Ohio. Plaintiffs do contend that Mallinckrodt plc and Teva Ltd. are the “alter egos” of their subsidiaries. The Sixth Circuit has held that “[t]he alter-ego theory provides k for personal jurisdiction ‘if the parent company exerts so much control over the subsidiary that the two ler do not exist as separate entities but are one and the same for purposes of jurisdiction.’” Anwar v. Dow tC ric Chem. Co., 876 F.3d 841, 848 (6th Cir. 2017) (citation omitted). In determining whether a subsidiary is ist an alter ego of the parent corporation, Ohio courts consider factors such as whether (1) corporate sD formalities are observed, (2) corporate records are kept, and (3) the corporation is financially es independent. Estate of Thomson ex rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545 F.3d rg Bu 357, 362–63 (6th Cir. 2008) (citing Microsys Computing, Inc. v. Dynamic Data Sys., LLC, No. 4:05 CV n 2205, 2006 WL 2225821, *6 (N.D. Ohio Aug. 2, 2006)). ily ar Courts in the Sixth Circuit also consider additional factors such as (1) sharing the same M employees and corporate officers; (2) engaging in the same business enterprise; (3) having the same of e address and phone lines; (4) using the same assets; (5) completing the same jobs; (6) not maintaining ffic separate books, tax returns and financial statements; and (7) exerting control over the daily affairs of yO another corporation. See id. None of the Sixth Circuit or Ohio factors are alone sufficient to establish op C alter ego liability. Plaintiffs only address the Sixth Circuit factors in their Mallinckrodt plc and Teva ial Ltd. Response briefs. Other courts in the Sixth Circuit have relied solely on these Sixth Circuit factors fic so the Court finds that addressing the Sixth Circuit factors is sufficient for the alter ego analysis. See of Un e.g., Estate of Thomson ex rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 362–63 (6th Cir. 2008) (citing Microsys Computing, Inc. v. Dynamic Data Sys., LLC, No. 4:05 CV 2205, 2006 WL 2225821, *6 (N.D. Ohio Aug. 2, 2006)). 6 Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 7 of 13. PageID #: 287954 a. Mallinckrodt plc Mallinckrodt plc is an Irish public limited company headquartered in the United Kingdom. Doc #: 1266; Fenlon Aff. ¶ 2. Mallinckrodt plc is a holding company and the ultimate parent company of Mallinckrodt LLC and SpecGx LLC. Id. Mallinckrodt LLC and SpecGx LLC are both Delaware limited k liability companies headquartered in St. Louis, Missouri. Id. at ¶¶ 10-11. Mallinckrodt LLC and SpecGx ler LLC both have sold opioids in the United States; Mallinckrodt plc has not. Id. at ¶ 3. Mallinckrodt plc tC ric does not dispute that Mallinckrodt LLC and SpecGx LLC are subject to personal jurisdiction in the Track ist One cases. Rather, Mallinckrodt plc asserts that this Court does not have jurisdiction over it as an indirect sD parent company with no contacts with the United States. However, Plaintiffs assert that Mallinckrodt es LLC and/or SpecGx LLC are the alter-egos of Mallinckrodt plc. Thus, the Court must consider the facts rg of the alter-ego analysis. Plaintiffs do not argue that Bu two of the alter ego factors—having the same n address and phones lines, and completing the same jobs—are satisfied. Plaintiffs only address the ily ar remaining five Sixth Circuit factors so the Court will only consider these. M Plaintiffs first assert that Mallinckrodt LLC and/or SpecGx LLC are the alter-egos of of e Mallinckrodt plc because they share the same employees and corporate officers. Mallinckrodt Opp. at ffic 11. For example, Plaintiffs argue that Michael-Bryant Hicks serves as Senior Vice President & General yO Counsel for both Mallinckrodt LLC and Mallinckrodt plc. Id. Plaintiffs rely on a 2017 DOJ/DEA op C settlement agreement that they allege Hicks signed on behalf of both entities. See id.; Fahey Ex. 7 at 14. ial However, Mallinckrodt plc’s current Vice President, Corporate Secretary, and General Counsel fic Stephanie Miller signed a sworn affidavit that Hicks has never served as an officer of Mallinckrodt LLC of Un and only signed the settlement agreement in his capacity as Senior Vice President & General Counsel of Mallinckrodt plc, pursuant to a delegation of authority. Miller Aff. ¶ 8. Plaintiffs allege that both SpecGx LLC and Mallinckrodt LLC have several other common officers with Mallinckrodt plc but Plaintiffs fail to cite specific documentation other than Fahey’s Affidavit to support their assertions. 7 Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 8 of 13. PageID #: 287955 Plaintiffs also allege that Mallinckrodt plc, SpecGx LLC, and Mallinckrodt LLC engage in the same business enterprise. Mallinckrodt Opp. at 12-13. However, Mallinckrodt plc has never marketed, sold, manufactured, or distributed prescription opiates in Ohio, the United States, or anywhere else. Doc #: 1266; Fenlon Aff. at ¶ 3. Nor is Mallinckrodt plc registered with the United States Drug Enforcement k Administration to manufacture or sell opioid drugs. Id. However, the Mallinckrodt family of companies ler appears to file its securities information as a global enterprise. See Mallinckrodt Opp at 13-14. As far tC ric as using the same assets, Plaintiffs allege that Mallinckrodt plc does use the same assets as its subsidiaries ist and Mallinckrodt plc disputes this. The parties also dispute the extent that Mallinckrodt plc and its sD subsidiaries maintain separate books, tax returns, and financial statements, and whether this is normal es corporate practice or evidence of the Mallinckrodt entities acting together as one. Lastly, the parties rg dispute the extent to which Mallinckrodt plc controls Bu the daily affairs of Mallinckrodt LLC and/or n SpecGx LLC. Plaintiffs allege that Mallinckrodt plc controls its subsidiaries’ marketing and sales ily ar strategies, promotional efforts, intellectual property rights and enforcement thereof, etc. See M Mallinckrodt Opp. at 16; Fahey Ex. 16 at 9. Mallinckrodt plc argues that any evidence Plaintiffs claim of e shows its control over its subsidiaries’ daily affairs is consistent with normal managerial oversight that ffic all corporate parents and majority shareholders provide to their subsidiaries. See Mallinckrodt Reply at yO 12. Thus, the parties dispute and offer conflicting evidence for each of the five alter ego factors Plaintiffs op C addressed. Ultimately, the Court finds that the issue of whether SpecGx LLC and/or Mallinckrodt LLC ial are alter-egos of Mallinckrodt plc should be litigated in the Track One trial. fic b. Teva Ltd. of Un Teva Ltd. is a public limited company incorporated under the laws of Israel and headquartered in Petah Tikva, Israel. Doc #: 1264-2; West Dec. ¶ 2. Teva Ltd. has no office, property, employees, or registered agent in the United States and does not transact business in the United States. Id. Teva USA, a subsidiary of Teva Ltd., is a Delaware corporation with its principal place of business in North Wales, 8 Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 9 of 13. PageID #: 287956 Pennsylvania. Doc #: 1465; Third Amended Complaint (“TAC”) ¶ 68. Teva USA sold opioids in the United States from 2005-2009. Id. Cephalon, Inc. is a Delaware corporation with its principal place of business in Frazer, Pennsylvania. Id. at ¶ 69. In 2011, Teva Ltd. acquired Cephalon, Inc. Id. Cephalon, Inc. is also in the business of manufacturing, distributing, and selling opioids in the United States. Id. at k ¶ 70. Plaintiffs argue that Cephalon, Inc. and Teva USA are alter egos of Teva Ltd. ler Plaintiffs assert that Teva Ltd. and Teva USA share the same employees and corporate officers. tC ric Teva Opp. at 7. For example, Debra Barrett, as Teva USA employee, coordinated and directed advocacy, ist lobbying, and policy development across the entire Teva group of companies. Id. at 8. Teva Ltd. sD counters that any sharing of employees or corporate officers between it and Teva USA or Cephalon, Inc. es is through arms-length agreements. Teva Reply at 11. Plaintiffs also argue that Teva Ltd. and Teva rg Bu USA engage in the same business enterprise because Teva Ltd. controls the operations of its subsidiaries n through an integrated management team via Global Divisions. Teva Opp. at 8. Plaintiffs further contend ily ar that Teva Ltd. and Teva USA use the same assets, in part because they file consolidated financial results M with the Securities & Exchange Commission. Id. at 9. Teva Ltd. responds that its SEC filings comport of e with the SEC’s regulatory specifications and is common practice among parent-subsidiary relationships. ffic Teva Reply at 13. Finally, Plaintiffs maintain that Teva Ltd. controls the daily activities of Teva USA. yO Teva Opp. at 12. Plaintiffs state that Teva Ltd.’s CEO has to ultimately approve whether or not Teva op C USA launches an opioid product in the United States. Id. at 13. Teva Ltd. claims that what Plaintiffs ial state are daily activities are really examples of high-level oversight. Teva Reply at 19. Given these fic significant factual disputes, the Court defers deciding whether Teva USA and/or Cephalon, Inc. are alter of Un egos of Teva Ltd until after the Track One trial. 3. Successor Liability Plaintiffs argue that Allergan plc, Teva Ltd., and Mallinckrodt plc are also all subject to personal jurisdiction under successor liability. The Sixth Circuit has explained that “it is compatible with due 9 Case: 1:17-md-02804-DAP Doc #: 2131 Filed: 08/05/19 10 of 13. PageID #: 287957 process for a court to exercise personal jurisdiction over ... an alter ego or successor of a corporation that would be subject to personal jurisdiction in that court.” Estate of Thomson v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 362 (6th Cir. 2008). The parties agree that Ohio law dictates the rules of successor liability in this case. In Ohio, “[t]he well-recognized general rule of successor liability k provides that the purchaser of a corporation’s assets is not liable for the debts and obligations of the ler seller corporation.” Welco Indus., Inc. v. Applied Cos., 617 N.E.2d 1129, 1132 (1993) (citation omitted). tC ric The Ohio Supreme Court has identified four discrete exceptions to the general rule when: “(1) the buyer ist expressly or impliedly agrees to assume such liability; (2) the transaction amounts to a de facto sD consolidation or merger; (3) the buyer corporation is merely a continuation of the seller corporation; or es (4) the transaction is entered into fraudulently for the purpose of escaping liability.” Id. at 1133. rg a. Allergan plc Bu n Allergan plc was originally incorporated under the name Actavis plc in Ireland on May 16, 2013. ily ar Doc #: 1258-2; Arecca Aff. ¶ 5. In June 2015, Actavis plc changed its corporate name to Allergan plc. M Id. Allergan plc is a corporation incorporated under the laws of the Republic of Ireland. Id. at ¶ 4. of e Allergan plc’s headquarters are in Dublin, Ireland and it maintains administrative headquarters in ffic Madison, New Jersey. Doc #: 2079-1; Arecca Aff. ¶ 3. Allergan Finance, LLC (formerly Actavis, Inc.) yO is a limited liability company incorporated in Nevada and headquartered in Madison, New