Louisiana Health Service & Indemnity Company v. Celgene Corporation

Background

Louisiana Health Service & Indemnity Company doing business as Blue Cross and Blue Shield of Louisiana, HMO Louisiana, Inc., and David Mitchell, individually and on behalf of others similarly situated, filed a proposed class action against Celgene Corporation, Bristol Myers Squibb Company, Anthony Insogna, and Jerome Zeldis. The complaint alleges monopolization under 15 U.S.C. § 2 and state-law claims for unlawful monopolization, consumer-protection violations, and unjust enrichment.

Zeldis, identified in the opinion as a former Celgene vice president of medical affairs, chief medical officer, and CEO of Celgene Global Health, moved to dismiss in part because the court allegedly lacked personal jurisdiction over him. The plaintiffs opposed the motion and asked the court to delay deciding it so they could conduct limited jurisdictional discovery—fact gathering aimed at determining whether the court had authority over Zeldis.

Arguments about jurisdictional discovery

The plaintiffs pointed to connections described in Zeldis’s declaration, including his work as a clinical associate professor at Cornell Medical School from 1995 to 2003 and his ownership of apartments in New York City. They argued that these facts made it likely that Zeldis conducted business for Celgene in New York, such as making calls, attending meetings, or overseeing clinical trials.

The plaintiffs also relied on patent-related facts. They argued that Zeldis’s status as the named inventor and signer of documents for patent applications filed by Celgene’s New York-based attorneys supplied a basis for jurisdiction under New York’s long-arm statute. The court considered the plaintiffs’ reliance on a New York decision involving defendants who had projected themselves into New York’s legal-services market through solicitation and frequent communications with a New York lawyer.

Zeldis argued that the plaintiffs’ theory was speculative. The court agreed. It found that the plaintiffs did not support the claim that Celgene’s headquarters’ proximity to New York City established jurisdiction. It also found that Zeldis’s New York apartment use and employment at Cornell did not support an inference that he conducted business in New York related to the patents or other issues in this case.

Ruling

The court held that the plaintiffs had not made a sufficient start toward establishing personal jurisdiction and had not identified a genuine issue of jurisdictional fact. The court further concluded that Zeldis’s being named as an inventor on patents belonging to Celgene, headquartered in New Jersey, and filed in Virginia by a New York law firm was too tenuous a connection to New York.

Judge Edgardo Ramos therefore denied the plaintiffs’ request for limited jurisdictional discovery concerning Zeldis. The order directed the Clerk of Court to terminate the motion and documents 132, 136, 137, and 138. This order did not state a disposition of Zeldis’s underlying motion to dismiss.