{ "id": 8918422, "name": "HARRY E. STETSER, DALE E. NELSON, and MICHAEL de MONTBRUN, and on behalf of themselves and all others similarly situated, Plaintiffs v. TAP PHARMACEUTICAL PRODUCTS INC.; ABBOTT LABORATORIES; TAKEDA CHEMICAL INDUSTRIES, LTD.; JOHNSON & JOHNSON; ETHICON ENDO-SURGERY, INC.; INDIGO LASER CORPORATION; DAVID JETT; CHRISTOPHER COLEMAN; SCOTT HIDALGO; and EDDY JAMES HACK, Defendants", "name_abbreviation": "Stetser v. TAP Pharmaceutical Products Inc.", "decision_date": "2004-02-03", "docket_number": "No. COA03-180", "first_page": "518", "last_page": "523", "citations": [ { "type": "official", "cite": "162 N.C. App. 518" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "349 S.E.2d 579", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "580" } ], "opinion_index": 0 }, { "cite": "318 N.C. 504", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4740610 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/318/0504-01" ] }, { "cite": "343 S.E.2d 2", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1986, "pin_cites": [ { "page": "3" }, { "page": "3-4" }, { "page": "4" } ], "opinion_index": 0 }, { "cite": "80 N.C. App. 459", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524299 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "461" }, { "page": "461-62" } ], "opinion_index": 0, "case_paths": [ "/nc-app/80/0459-01" ] }, { "cite": "689 F. Supp. 564", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 3994929 ], "year": 1988, "pin_cites": [ { "page": "567" } ], "opinion_index": 0, "case_paths": [ "/f-supp/689/0564-01" ] }, { "cite": "245 F. Supp. 2d 280", "category": "reporters:federal", "reporter": "F. Supp. 2d", "case_ids": [ 9349530 ], "weight": 2, "year": 2003, "pin_cites": [ { "page": "294" } ], "opinion_index": 0, "case_paths": [ "/f-supp-2d/245/0280-01" ] }, { "cite": "917 F. Supp. 392", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 7792875 ], "year": 1996, "pin_cites": [ { "page": "397" } ], "opinion_index": 0, "case_paths": [ "/f-supp/917/0392-01" ] }, { "cite": "470 F. Supp. 559", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 4076842 ], "year": 1979, "pin_cites": [ { "page": "565" } ], "opinion_index": 0, "case_paths": [ "/f-supp/470/0559-01" ] }, { "cite": "712 F. Supp. 1223", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 7398852 ], "year": 1988, "pin_cites": [ { "page": "1229" } ], "opinion_index": 0, "case_paths": [ "/f-supp/712/1223-01" ] }, { "cite": "326 U.S. 310", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6157001 ], "weight": 4, "year": 1945, "pin_cites": [ { "page": "316" }, { "page": "102" }, { "page": "366" } ], "opinion_index": 0, "case_paths": [ "/us/326/0310-01" ] }, { "cite": "348 S.E.2d 782", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 6, "year": 1986, "pin_cites": [ { "page": "786", "parenthetical": "citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102 (1945)" }, { "page": "786" }, { "page": "786" }, { "page": "786", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "318 N.C. 361", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4734507 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "365", "parenthetical": "citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102 (1945)" }, { "page": "366" } ], "opinion_index": 0, "case_paths": [ "/nc/318/0361-01" ] }, { "cite": "462 S.E.2d 832", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "pin_cites": [ { "page": "833" } ], "opinion_index": 0 }, { "cite": "120 N.C. App. 498", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11916410 ], "year": 1995, "pin_cites": [ { "page": "500" } ], "opinion_index": 0, "case_paths": [ "/nc-app/120/0498-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 1-75.4", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "546 S.E.2d 90", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "opinion_index": 0 }, { "cite": "353 N.C. 261", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 135782, 135657, 135981, 135737, 135578 ], "year": 2000, "opinion_index": 0, "case_paths": [ "/nc/353/0261-04", "/nc/353/0261-03", "/nc/353/0261-01", "/nc/353/0261-02", "/nc/353/0261-05" ] }, { "cite": "532 S.E.2d 215", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 2000, "pin_cites": [ { "page": "217-18" }, { "page": "219" }, { "page": "219" } ], "opinion_index": 0 }, { "cite": "138 N.C. App. 612", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11080985 ], "weight": 3, "year": 2000, "pin_cites": [ { "page": "615" }, { "page": "617" }, { "page": "617" } ], "opinion_index": 0, "case_paths": [ "/nc-app/138/0612-01" ] }, { "cite": "394 S.E.2d 651", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "pin_cites": [ { "page": "654" } ], "opinion_index": 0 }, { "cite": "99 N.C. App. 626", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524368 ], "year": 1990, "pin_cites": [ { "page": "629-30" } ], "opinion_index": 0, "case_paths": [ "/nc-app/99/0626-01" ] } ], "analysis": { "cardinality": 747, "char_count": 14234, "ocr_confidence": 0.762, "pagerank": { "raw": 2.1312126327956714e-07, "percentile": 0.765903340310574 }, "sha256": "46f9f1ddfa30bca017b2542249755527bcccedb9b451a73526fdb078f072411f", "simhash": "1:8338316b9aceb45f", "word_count": 2219 }, "last_updated": "2023-07-14T16:27:54.754463+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges TYSON and BRYANT concur." ], "parties": [ "HARRY E. STETSER, DALE E. NELSON, and MICHAEL de MONTBRUN, and on behalf of themselves and all others similarly situated, Plaintiffs v. TAP PHARMACEUTICAL PRODUCTS INC.; ABBOTT LABORATORIES; TAKEDA CHEMICAL INDUSTRIES, LTD.; JOHNSON & JOHNSON; ETHICON ENDO-SURGERY, INC.; INDIGO LASER CORPORATION; DAVID JETT; CHRISTOPHER COLEMAN; SCOTT HIDALGO; and EDDY JAMES HACK, Defendants" ], "opinions": [ { "text": "McCULLOUGH, Judge.\nThis case arises out of an order denying defendant Takeda\u2019s motion to dismiss for lack of personal jurisdiction entered 17 October 2002. The pertinent facts are as follows: Plaintiffs are three North Carolina residents who purchased Lupron as part of their treatment for prostate cancer. Defendant Takeda Chemical Industries, Inc. (Takeda) is a Japanese corporation headquartered in Osaka, Japan. Plaintiffs allege that Takeda, TAP Pharmaceutical Products, Inc. (TAP), Abbott Laboratories, and other defendants violated various laws in connection with the marketing and pricing of Lupron in the United States. Plaintiffs allege that defendants were involved in a conspiracy consisting of a fraudulent marketing, pricing, and sales scheme to defraud Lupron patients.\nTakeda manufactures Lupron in Japan, but it does not design, manufacture, package, sell, ship, or distribute Lupron in North Carolina. Under a license granted by Takeda, Lupron is marketed by a separate corporation located in Illinois, and sold in the United States by TAP\u2019s subsidiary, TAP Pharmaceuticals, Inc. Takeda indirectly owns 50% of TAP\u2019s stock. Abbott owns the other 50%. TAP maintains its own headquarters, has its own bank account, files its own taxes, holds regular Board of Directors meetings, and hires and fires its own personnel. TAP also runs its daily activities without instruction from Takeda.\nFrom 1992 through December 2001, Takeda was not licensed or registered to do business in North Carolina. It did not own or lease land or maintain an address or telephone number in the state. Takeda did not manufacture any products, sell any goods, or earn any income from business in North Carolina. It did not even have a registered agent for service of process in North Carolina. Prior to January 2001, Takeda did have a subsidiary in North Carolina known as Takeda Vitamin and Food U.S.A., Inc. (TVFU). Although TVFU manufactured bulk vitamins, it had no involvement with Lupron.\nTakeda did not have employees permanently assigned to work in the United States, but it did \u201csecond\u201d employees to American subsidiaries from time to time. \u201cSecondment\u201d is a customary practice among Japanese corporations with foreign subsidiaries. Through this practice, an employee of the parent works for a period of time as an employee of the subsidiary. The United States subsidiary supervises the seconded employee and controls the manner in which the employee fulfills his or her responsibilities to the subsidiary. Takeda also maintained one bank account in Wilmington, North Carolina, for the purpose of settling accounts related to seconded employees. This account was closed by September of 1998.\nPlaintiffs filed this class action suit on 31 December 2001, alleging a number of claims based on the sale and marketing of Lupron. On 17 October 2002, the trial court denied Takeda\u2019s motion to dismiss for lack of personal jurisdiction. Defendant appeals. On appeal, defendant argues that the trial court erred because there was no basis for general or specific jurisdiction. We agree and reverse the decision of the trial court.\nWhen jurisdiction is challenged, plaintiff has the burden of proving that jurisdiction exists. Cherry Bekaert & Holland v. Brown, 99 N.C. App. 626, 629-30, 394 S.E.2d 651, 654 (1990). In this case, the trial court made no findings of fact, and neither party made such a request. \u201cWhere no findings are made, proper findings are presumed, and our role on appeal is to review the record for competent evidence to support these presumed findings.\u201d Bruggeman v. Meditrust Acquisition Co., 138 N.C. App. 612, 615, 532 S.E.2d 215, 217-18, disc. review denied, appeal dismissed, 353 N.C. 261, 546 S.E.2d 90 (2000). This Court has articulated the standard for determining personal jurisdiction:\nThe determination of personal jurisdiction is a two-part inquiry. The trial court first must examine whether the exercise of jurisdiction over the defendant falls within North Carolina\u2019s long-arm statute, N.C. Gen. Stat. \u00a7 1-75.4, and then must determine whether the defendant has sufficient minimum contacts with North Carolina such that the exercise of jurisdiction is consistent with the due process clause of the Fourteenth Amendment to the United States Constitution.\nBetter Business Forms, Inc. v. Davis, 120 N.C. App. 498, 500, 462 S.E.2d 832, 833 (1995). Takeda does not argue that it is beyond the reach of North Carolina\u2019s long-arm statute. Therefore, we must consider the remaining issue of due process.\nTo comply with due process, there must be minimum contacts between the nonresident defendant and the forum so that allowing the suit does not offend traditional notions of fair play and substantial justice. Tom Toggs, Inc., v. Ben Elias Industries Corp., 318 N.C. 361, 365, 348 S.E.2d 782, 786 (1986) (citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102 (1945)). \u201c[T]here must be some act by which the defendant purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws; the unilateral activity within the forum state of others who claim some relationship with a non-resident defendant will not suffice.\u201d Id.\nThere are two kinds of personal jurisdiction: general and specific. A court may exercise specific jurisdiction only \u201c[w]here the controversy arises out of the defendant\u2019s contacts with the forum state.\u201d Id. at 366, 348 S.E.2d at 786. The test for general jurisdiction is more stringent. Id. A court may exercise general jurisdiction where the cause of action is unrelated to defendant\u2019s activities with the forum state if there are \u201ccontinuous and systematic\u201d contacts between the defendant and the forum state. Bruggeman, 138 N.C. App. at 617, 532 S.E.2d at 219. With these principles in mind, we consider whether there was specific or general jurisdiction in this case.\nA. Specific Jurisdiction\nA court may exercise specific jurisdiction only \u201c[w]here the controversy arises out of the defendant\u2019s contacts with the forum state.\u201d Tom Toggs, Inc., 318 N.C. at 366, 348 S.E.2d at 786. The alleged injuries must arise out of activities defendant \u201cpurposefully directed\u201d toward the state\u2019s residents. Id.\nPlaintiffs advance a conspiracy theory of personal jurisdiction alleging that defendants are subject to jurisdiction because defendants and their co-conspirators took steps to harm North Carolina residents. \u201cUnder the conspiracy theory of jurisdiction, a conspirator who has few contacts with a state may nonetheless be subject to the state\u2019s jurisdiction if substantial acts in furtherance of the conspiracy were performed in the state and the conspirator knew or should have known that these acts would be performed.\u201d Hanes Companies, Inc. v. Ronson, 712 F. Supp. 1223, 1229 (M.D.N.C. 1988). Two federal decisions from North Carolina apply the theory. Id.; Gemini Enterprises, Inc. v. WFMY Television Corp., 470 F. Supp. 559, 565 (M.D.N.C. 1979). However, the Fourth Circuit has not adopted the conspiracy theory. Boon Partners v. Advanced Financial Concepts, Inc., 917 F. Supp. 392, 397 (E.D.N.C. 1996). These diverging outcomes indicate a division among our federal courts and perhaps some reticence in implementing the theory. In reviewing our state\u2019s jurisprudence, it does not appear that our Supreme Court has ever adopted this theory and has instead relied on a more traditional analysis.\nEven if we were to consider the conspiracy theory in this case, plaintiffs\u2019 conclusory allegations would be insufficient because plaintiffs have failed to provide specific facts showing that Takeda agreed to perform unlawful conduct. Plaintiffs\u2019 alleged injuries arise from the marketing and sales of Lupron. However, a senior Takeda employee, Kenji Yagi, stated in his affidavit that \u201cTakeda has no involvement in the marketing or sale of Lupron ... to customers in the United States\u201d and \u201cTakeda has not engaged in activities relating to sales or marketing of Lupron to customers in North Carolina.\u201d Plaintiffs do not contest this assertion, but argue that Takeda is subject to jurisdiction due to the actions taken by TAP, or in the alternative, Takeda\u2019s own actions involving a subsidiary.\nPlaintiffs also mention an agreement between the United States Attorney for the District of Massachusetts (the Government) and Takeda. In this Side Letter Agreement, Takeda promised to cooperate in a government investigation of TAP in exchange for a promise not to prosecute Takeda. Since Takeda made no admissions, entered no plea, and was never charged with any wrongdoing, it would be improper to use this agreement to imply misconduct by Takeda. Nothing in this letter represents any action taken by Takeda in North Carolina. Finally, we note that our decision on this issue is consistent with the conclusion reached by the Multidistrict Litigation Panel which considered nearly identical allegations. In Re Lupron Marketing And Sales Practices Lit., 245 F. Supp. 2d 280 (2003). In its ruling, the panel upheld jurisdiction for Illinois because TAP is located there, but in Massachusetts, Alabama, and Minnesota, it found no basis for jurisdiction based on conclusory allegations of a conspiracy: \u201cAssuming, however, that the conspiracy theory of jurisdiction could, in an appropriate factual context, pass federal constitutional scrutiny, due process requires more than a bare allegation of the existence of a conspiracy.\u201d Id. at 294. For these reasons, there was not a sufficient basis for our exercising specific jurisdiction in this case.\nB. General Jurisdiction\nA court may exercise general jurisdiction where the defendant\u2019s activities are unrelated to the forum state as long as defendant maintains \u201ccontinuous and systematic\u201d contacts. Bruggeman, 138 N.C. App. at 617, 532 S.E.2d at 219. Courts consider a number of factors in this analysis, but no single factor is determinative; rather, the totality of the circumstances must be examined to determine whether the defendant\u2019s contacts are continuous and systematic. Occidental Fire & Cas. v. Continental Ill. Nat\u2019l Bk., 689 F. Supp. 564, 567 (E.D.N.C. 1988). \u201cWhether the type of activity conducted within the state is adequate to satisfy the due process requirements depends upon the facts of the particular case.\u201d Ash v. Burnham Corp., 80 N.C. App. 459, 461, 343 S.E.2d 2, 3, aff'd, 318 N.C. 504, 349 S.E.2d 579, 580 (1986).\nIn this case, Takeda has not been authorized to do business in North Carolina, and it has not maintained any offices here. Takeda has not manufactured, sold, or shipped any goods in North Carolina. It does not own real property, has no telephone number, and does not have a mailing address. The only other contacts between Takeda and North Carolina are a few \u201cseconded\u201d employees and one bank account in Wilmington which was closed three years before the instant case was filed. We conclude that these peripheral contacts do not establish general jurisdiction under the totality of the circumstances. Since the contacts with North Carolina are so attenuated, the defendant would not \u201c \u2018reasonably anticipate being haled into court\u2019 \u201d here. Tom Toggs, Inc., 318 N.C. at 365, 348 S.E.2d at 786 (citation omitted). Indeed, significantly greater contacts by nonresident defendants have been held insufficient to provide a basis for general jurisdiction. For example, a boiler manufacturer used independent contractors to solicit orders in North Carolina and advertised in magazines that reached North Carolina. Ash, 80 N.C. App. at 461-62, 343 S.E.2d at 3-4. Nevertheless, this Court found that \u201cthese contacts with North Carolina [were] not so \u2018continuous and systematic\u2019 as to warrant the exercise of in personam jurisdiction.\u201d Id. at 462, 343 S.E.2d at 4. Finally, since the test for general jurisdiction is more stringent than the test for specific jurisdiction, we conclude that general jurisdiction has not been established in this case.\nAfter a careful review of the record and the arguments of the parties, we conclude that there was not a sufficient basis for finding specific or general jurisdiction. Thus, the trial court\u2019s order denying defendant\u2019s motion to dismiss for lack of personal jurisdiction is\nReversed.\nJudges TYSON and BRYANT concur.", "type": "majority", "author": "McCULLOUGH, Judge." } ], "attorneys": [ "Marvin K. Blount, Jr., and Marvin K. Blount, III; and Kline & Specter, P.C., by Donald E. Haviland, Jr., Terri Anne Benedetto, and Louis C. Ricciardi for plaintiff appellees.", "Ellis & Winters LLP, by Richard E. Ellis and Matthew W. Sawchak, for Takeda Chemical Industries, Ltd., defendant appellant." ], "corrections": "", "head_matter": "HARRY E. STETSER, DALE E. NELSON, and MICHAEL de MONTBRUN, and on behalf of themselves and all others similarly situated, Plaintiffs v. TAP PHARMACEUTICAL PRODUCTS INC.; ABBOTT LABORATORIES; TAKEDA CHEMICAL INDUSTRIES, LTD.; JOHNSON & JOHNSON; ETHICON ENDO-SURGERY, INC.; INDIGO LASER CORPORATION; DAVID JETT; CHRISTOPHER COLEMAN; SCOTT HIDALGO; and EDDY JAMES HACK, Defendants\nNo. COA03-180\n(Filed 3 February 2004)\nJurisdiction\u2014 personal \u2014 general\u2014specific\nThe trial court erred by denying the motion of defendant Japanese corporation to dismiss based on lack of personal jurisdiction in a class action conspiracy case involving the alleged fraudulent marketing, pricing, and sales scheme of a cancer treatment drug, because there was not a sufficient basis for finding specific or general jurisdiction including that: (1) there was no basis for specific jurisdiction when plaintiffs failed to provide specific facts showing that defendant agreed to perform unlawful conduct even assuming a conspiracy theory of jurisdiction; and (2) there was no basis for general jurisdiction when defendant has not been authorized to do business in North Carolina and has not maintained any offices here, defendant has not manufactured, sold, or shipped any goods in North Carolina, defendant does not own real property, has no telephone number, and does not have a mailing address, and defendant\u2019s peripheral contacts do not establish general jurisdiction under the totality of circumstances.\nAppeal by defendant from order entered 17 October 2002 by Judge Paul L. Jones in New Hanover County Superior Court. Heard in the Court of Appeals 29 October 2003.\nMarvin K. Blount, Jr., and Marvin K. Blount, III; and Kline & Specter, P.C., by Donald E. Haviland, Jr., Terri Anne Benedetto, and Louis C. Ricciardi for plaintiff appellees.\nEllis & Winters LLP, by Richard E. Ellis and Matthew W. Sawchak, for Takeda Chemical Industries, Ltd., defendant appellant." }, "file_name": "0518-01", "first_page_order": 546, "last_page_order": 551 }