Opinion
CASE NO. C22-0334JLR
2023-12-04
HDT BIO CORP., Plaintiff, v. EMCURE PHARMACEUTICALS, LTD., Defendant.
Dana Berkowitz, Pro Hac Vice, John Stokes, Pro Hac Vice, Kenneth J. Halpern, Pro Hac Vice, Peter K. Stris, Pro Hac Vice, Rogers Elizabeth Brannen, Pro Hac Vice, Stris & Maher LLP, Los Angeles, CA, Mathew L. Harrington, Justo Gonzalez, Stokes Lawrence PS, Seattle, WA, for Plaintiff. Amanda J. Beane, Eric B. Wolff, James Sanders, Perkins Coie, Seattle, WA, Steven W. Fogg, Corr Cronin LLP, Seattle, WA, Alan M. Freeman, Pro Hac Vice, Blank Rome LLP, Washington, DC, Christopher Cody Wilcoxson, Pro Hac Vice, M. David Tambussi, Pro Hac Vice, Michael A. Iannucci, Pro Hac Vice, Blank Rome, Philadelphia, PA, for Defendant.
Dana Berkowitz, Pro Hac Vice, John Stokes, Pro Hac Vice, Kenneth J. Halpern, Pro Hac Vice, Peter K. Stris, Pro Hac Vice, Rogers Elizabeth Brannen, Pro Hac Vice, Stris & Maher LLP, Los Angeles, CA, Mathew L. Harrington, Justo Gonzalez, Stokes Lawrence PS, Seattle, WA, for Plaintiff.
Amanda J. Beane, Eric B. Wolff, James Sanders, Perkins Coie, Seattle, WA, Steven W. Fogg, Corr Cronin LLP, Seattle, WA, Alan M. Freeman, Pro Hac Vice, Blank Rome LLP, Washington, DC, Christopher Cody Wilcoxson, Pro Hac Vice, M. David Tambussi, Pro Hac Vice, Michael A. Iannucci, Pro Hac Vice, Blank Rome, Philadelphia, PA, for Defendant.
ORDER
PROVISIONALLY FILED UNDER SEAL
JAMES L. ROBART, United States District Judge.
I. INTRODUCTION
Before the court are two motions. The first is Plaintiff HDT Bio Corp.'s ("HDT") motion to compel, which Defendant Emcure Pharmaceuticals, Ltd. ("Emcure") opposes. MTC (Dkt. ## 146 (sealed), 144 (redacted)); see also MTC Reply (Dkt. ## 188 (sealed), 186 (redacted)); MTC Resp. (Dkt. ## 175 (sealed), 176 (redacted)). The second is Emcure's motion to dismiss for lack of personal jurisdiction, which HDT opposes. (MTD (Dkt. # 136); see also MTD Reply (Dkt. ## 166 (sealed), 170 (redacted)); MTD Resp. (Dkt.
## 152 (sealed), 148 (redacted)).) The court has considered the parties' submissions, the relevant portions of the record, and the governing law. Being fully advised, the court GRANTS HDT's motion to compel and GRANTS Emcure's motion to dismiss.
Neither party requests oral argument concerning HDT's motion to compel, but both parties request oral argument concerning Emcure's motion to dismiss. (See MTC at 1; MTC Resp. at 1; MTD at 1; MTD Resp. at 1.) The court concludes that oral argument would not be helpful to its disposition of these motions. See Local Rules W.D. Wash. LCR 7(b)(4).
II. BACKGROUND
This action for trade secret misappropriation arises out of allegations that Emcure, an Indian pharmaceutical company, "stole" HDT's COVID-19 vaccine. (Am. Compl. (Dkt. # 133) ¶ 9.) HDT, a Seattle-based biotech research company, contends that it developed a vaccine using saRNA technology that is safer, cheaper, and more effective than the mRNA vaccines developed by Pfizer and Moderna. (Id. ¶¶ 2, 8.) HDT licenses its technology to companies that manufacture and distribute vaccines on a large scale. (Id. ¶ 23.) Non-party Gennova Biopharmaceuticals Ltd. ("Gennova") is one of those companies; it is also one of Emcure's 22 subsidiaries. (9/21/23 Singh Decl. (Dkt. # 137) ¶ 9.) On August 10, 2021, HDT and Gennova executed a license agreement giving Gennova the right to use HDT's saRNA technology to manufacture and sell a COVID-19 vaccine in India in exchange for milestone payments, royalties on sales, and access to Gennova's data. (Am. Compl. ¶¶ 191, 210.) Leading up to the execution of the license agreement, HDT negotiated with Gennova's Chief Executive Office, Dr. Sanjay Singh. (See id. ¶ 10.)
The partnership did not pan out. According to HDT, Emcure began advertising HDT's proprietary technology as its own, and Gennova attempted to obtain Indian patents on HDT's innovations. (Id. ¶ 13.) HDT further alleges that, "at Emcure's direction, Gennova was refusing to share clinical data on the vaccine's safety and efficacy." (Id.) In November of 2021, Dr. Singh allegedly denied that Gennova's vaccine was based on HDT's technology and asserted that Gennova had developed its own COVID-19 vaccine independently. (Id. ¶ 15.)
HDT is currently litigating against Gennova in the London Court of International Arbitration due to a mandatory dispute resolution clause in the license agreement. (See id. ¶ 73 n.17; MTD at 11.) HDT filed this lawsuit against Emcure on March 21, 2022. (See generally Compl. (Dkt. # 1).) The parties engaged in over a year of jurisdictional discovery before HDT filed its amended complaint on September 7, 2023. (See generally 7/29/22 Order (Dkt. # 51); 7/26/23 Order (Dkt. # 128); Am. Compl.)
On September 21, 2023, Emcure filed the instant motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. (See generally MTD.) Shortly thereafter, on October 16, 2023, HDT filed the instant motion to compel. (See generally MTC.) The two motions are related. In its motion to dismiss, Emcure asserts that it has no meaningful United States contacts. (MTD at 13-16.) HDT responds that Emcure's contacts are sufficient to support a finding of personal jurisdiction but, even if they are not, the court should also consider "Gennova's jurisdictionally relevant conduct" in determining whether it has personal jurisdiction over Emcure because Gennova is Emcure's agent. (MTD Resp. at 20.) To support its agency argument, HDT wishes to
use emails it has uncovered in discovery (which Emcure seeks to claw back), purportedly showing that Emcure "direct[ed] Gennova to enact the exact scheme they used to claim HDT's trade secrets for themselves." (Id. at 3.) Those emails are the subject of HDT's motion to compel. (See generally MTC.) Emcure argues that they were inadvertently produced and are subject to the attorney-client privilege. (See generally MTC Resp.)
The court first considers HDT's motion to compel before addressing Emcure's motion to dismiss.
III. MOTION TO COMPEL
HDT's motion to compel concerns two emails exchanged between Gennova's CEO, Dr. Singh, and Berjis Desai, who is both the chairman of Emcure's board and a private attorney. (See MTC at 1; Berkowitz Decl. 1 (Dkt. ## 147 (sealed), 145 (redacted)) ¶ 2, Ex. 1 ("Emails").) On July 12, 2021, Dr. Singh wrote to Mr. Desai, attaching a "[n]ew agreement" for his "kind perusal." (Emails at EMCURE00398928.) Mr. Desai responded on August 4, 2021, cc'ing Emcure CEO Satish Mehta and writing that "[b]roadly speaking, the Agreement is finely balanced, subject to [a few] comments." (Id. at EMCURE00398927.) One such comment stated the following:
Clause 9.3 is tremendously in our favour. Somewhat surprisingly, it is giving us a right to terminate the Agreement at any time without any cause or reason by giving [HDT] 90 days prior notice. This may be borne in mind while negotiating with them. To illustrate, a possible situation can be where our own improvements and data are so extensive that we do not require their technology at all. In such an event, this clause can be invoked to terminate this Agreement which will relieve us of our obligations individually to provide our improvements and data to them. Please ensure that this clause is retained at any cost.
(Id.) Mr. Desai neither had Gennova sign an engagement letter before providing his thoughts on the agreement nor charged Gennova for his time. (See MTC Resp. at 12.)
Dr. Singh later testified at his deposition that Mr. Desai was "an independent lawyer" but not his "personal lawyer" or "Gennova's lawyer." (Berkowitz Decl. 1 ¶ 3, Ex. 2 ("Singh Dep. Tr.") at 12-13.) Dr. Singh further testified that he contacted Mr. Desai "[f]or legal advice" because the two are "subject matter expert[s] in different field[s] and [they] consult each other." (Id.) Piyush Nahar, Emcure's Executive Vice President of Corporate Development and Strategy, further confirmed that Mr. Desai was not "an attorney for Emcure." (Id. ¶ 4, Ex. 3 ("Nahar Dep. Tr.") at 226:11-12.) Emcure now asserts that Mr. Desai "was providing advice in his capacity as an independent transactional lawyer, not in his role as an Emcure director." (MTC Resp. at 4.) Although no money was exchanged, Emcure claims that "Mr. Desai has been a family friend of the Mehta's [sic] for over 30 years, and he does not typically charge for services like those he provided to Gennova." (Id. at 3.)
A. Legal Standard
"The attorney-client privilege protects confidential disclosures made by a client to an attorney in order to obtain legal advice, ... as well as an attorney's advice in response to such disclosures." United States v. Ruehle, 583 F.3d 600, 607 (9th Cir. 2009) (quoting United States v. Bauer, 132 F.3d 504, 507 (9th Cir. 1997)). As the "party asserting the attorney-client privilege," Emcure "has the burden of establishing the relationship and the privileged nature of the communication." Id. (quoting Bauer, 132 F.3d at 507). "The fact
that a person is a lawyer does not make all communications with that person privileged." Id. (quoting United States v. Martin, 278 F.3d 988, 999 (9th Cir. 2002)). Instead, an eight-part test determines whether the attorney-client privilege applies:
"(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) unless the protection be waived."
Id. (quoting In re Grand Jury Investigation, 974 F.2d 1068, 1071 n.2 (9th Cir. 1992)). The attorney-client privilege is "strictly construed," id. (quoting Martin, 278 F.3d at 999), and "[t]he existence of an attorney-client relationship is based on the client's subjective belief" at the time the communication is made, Glob. Enters., LLC v. Montgomery Purdue Blankenship & Austin PLLC, 52 F. Supp. 3d 1162, 1168 (W.D. Wash. 2014). After-the-fact declarations of privilege that lack specific facts are "conclusory blanket assertion[s] of the attorney-client privilege, which the Ninth Circuit extremely disfavors." LightGuard Sys., Inc. v. Spot Devices, Inc., 281 F.R.D. 593, 602 (D. Nev. 2012) (internal quotations omitted) (quoting Martin, 278 F.3d at 1000).
B. Application
Emcure has not met its burden because it has failed to establish that an attorney-client relationship ever manifested between Mr. Desai and Dr. Singh, Gennova, or Emcure. Emcure asserts that Mr. Desai is an "independent attorney" who provided legal advice to Dr. Singh for free because Mr. Desai is "a close family friend of the Mehtas" (MTC Resp. at 9, 11-12), but the evidence suggests that Mr. Desai was acting in his capacity as chairman of Emcure's board and directing Emcure's subsidiary's activities. Emcure states that "Mr. Desai has provided legal advice to the Mehta family, Emcure, and its subsidiaries for 30 years.". (MTC Resp. at 3-4 n.1.) But the evidence shows that, until HDT filed its motion to compel, neither Dr. Singh, Gennova nor Emcure viewed Mr. Desai as their attorney. (See Singh Dep. Tr. at 12-13; Nahar Dep. Tr. at 226:11-12.) This is demonstrated by Mr. Desai's August 4, 2021 email to Dr. Singh. Mr. Desai wrote that Clause 9.3 was "giving us a right to terminate the Agreement at any time" and that "a possible situation [could] be where our own improvements and data are so extensive that we do not require their technology at all." (Emails at EMCURE00398927 (emphasis added).) These statements, coupled with Mr. Desai's instruction to "ensure that this clause is retained at any cost" (id.), go beyond "explain[ing] why the termination clause was potentially favorable to Gennova" (MTC Resp. at 3), and instead amount to directions from a higher-up instructing how Dr. Singh and Gennova should handle the license agreement. See Regents of the Univ. of Cal. v. Micro Therapeutics, Inc., No. C 03 05669 JW, 2007 WL 2069946, at *2 (N.D. Cal. July 13, 2007) (noting that the "core of the privilege" requires that the attorney give advice "in his capacity as a lawyer, not in some other capacity" (quoting Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 602 (8th Cir. 1978))); see also Finova Cap. Corp. v. Lawrence, No. 3-99-CV-2552-M, 2001 WL 194935, 2001 U.S. Dist. LEXIS 2087, at *4 (N.D. Tex. Feb. 22, 2001) ("Where an attorney is functioning in some other capacity—such as an accountant, investigator, or business advisor—there is no privilege.") The court concludes that Mr. Desai was acting in his capacity as chairman of Emcure's board and not in his capacity as an attorney, and
Emcure is therefore not entitled to the attorney-client privilege in this instance.
Emcure's declarations do not warrant a different outcome. Emcure argues that "Dr. Singh and Mr. Desai both confirm that they understood [Mr. Desai's email] to be legal advice protected by the attorney-client privilege." (MTC Resp. at 10 (first citing 11/6/23 Singh Decl. (Dkt. # 179) ¶ 2; then citing Desai Decl. (Dkt. # 180) ¶ 3).) Dr. Singh's and Mr. Desai's declarations, however, make conclusory statements about the attorney-client privilege, and their attempts to walk back prior testimony are unpersuasive. Dr. Singh, for example, states that he "understood the legal advice ... to be attorney-client privileged" without explaining why and further suggests that, when he previously said Mr. Desai was not Gennova's attorney but rather "an independent lawyer," what he "meant by that was that Mr. Desai is an independent outside attorney, which is how I think of him." (11/6/23 Singh Decl. ¶¶ 2-3.) The idea that Dr. Singh views the chairman of Emcure's board as independent, outside counsel to Gennova stretches credulity. Moreover, Mr. Desai's statements that "[i]n the course of providing this advice, Gennova and I had established an attorney-client relationship" and that he "was not acting in [his] capacity of Chair of the Emcure Board of Directors" are dubious in light of prior testimony and the agreement itself. (Desai Decl. ¶¶ 3-4. See generally Emails; Nahar Dep. Tr.; Singh Dep. Tr.)
Emcure has failed to meet its burden concerning the attorney-client privilege.
Accordingly, the court GRANTS HDT's motion to compel (Dkt. # 144) and will consider Dr. Singh's and Mr. Desai's emails in ruling on Emcure's motion to dismiss.
IV. MOTION TO DISMISS
The court next addresses Emcure's motion to dismiss for lack of personal jurisdiction, setting forth the relevant legal standard before turning to the parties' arguments.
A. Legal Standard
"Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). Unless there has been an evidentiary hearing, the plaintiff's pleadings and affidavits must "make a prima facie showing of personal jurisdiction." Id. (quoting Caruth v. Int'l Psychoanalytical Ass'n, 59 F.3d 126, 128 (9th Cir. 1995)). To do so, "the plaintiff need only demonstrate facts that if true would support jurisdiction over the defendant," Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995), but the plaintiff cannot "simply rest on the bare allegations of its complaint," Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977).
There are two types of personal jurisdiction: general and specific. Bristol-Myers Squibb Co. v. Superior Ct., 582 U.S. 255, 262, 137 S.Ct. 1773, 198 L.Ed.2d 395 (2017). General jurisdiction "enables a court to hear cases unrelated to the defendant's forum activities ... if the defendant has 'substantial' or 'continuous and systematic' contacts with the forum." Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir. 1986) (quoting Haisten v. Grass Valley Med. Reimbursement Fund, Ltd., 784 F.2d 1392, 1396 (9th Cir. 1986)). Specific jurisdiction, on the other hand, requires that the suit "arise out of or relate to the defendant's contacts with the forum." Bristol-Myers, 582 U.S. at 262, 137 S.Ct. 1773 (brackets omitted) (quoting Daimler AG v.
Bauman, 571 U.S. 117, 127, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014)). That is, there must be "an 'affiliation between the forum and the underlying controversy.'" Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) (brackets omitted) (quoting Arthur T. von Mehren & Donald T. Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev. 1121, 1136 (1966)). "For this reason, 'specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.'" Bristol-Myers, 582 U.S. at 262, 137 S.Ct. 1773 (quoting Goodyear, 564 U.S. at 919, 131 S.Ct. 2846).
If a defendant "contends that it is not subject to personal jurisdiction in any state's courts of general jurisdiction," the court analyzes jurisdiction under the federal long-arm statute, Federal Rule of Civil Procedure 4(k)(2). Lang Van, Inc. v. VNG Corp., 40 F.4th 1034, 1040 (9th Cir. 2022). Under Rule 4(k)(2), where specific jurisdiction is at issue, the defendant must have sufficient "minimum contacts" with the forum of the United States, and the exercise of jurisdiction "must comport with due process." Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1126 (9th Cir. 2002). This test is "nearly identical" to the traditional personal jurisdiction analysis except that the court considers "contacts with the nation as a whole" as opposed to those with the state in which the court resides. Holland Am. Line, Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 462 (9th Cir. 2007).
The Ninth Circuit employs a three-part test to determine whether a defendant is subject to specific jurisdiction. Schwarzenegger, 374 F.3d at 802 (quoting Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)). First, the plaintiff must demonstrate that the defendant "purposefully direct[ed]" its activities toward the forum or "purposefully avail[ed] [itself] of the privilege of conducting activities in the forum." Id. (quoting Lake, 817 F.2d at 1421). Second, the plaintiff must establish that its claim "arises out of or relates to the defendant's forum-related activities." Id. (quoting Lake, 817 F.2d at 1421). If the plaintiff satisfies the first two prongs, the third prong shifts the burden back to the defendant to "present a compelling case" that the exercise of jurisdiction would not "comport with fair play and substantial justice," i.e., it would be unreasonable. Id. (first quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); then quoting Lake, 817 F.2d at 1421).
HDT argues only that the court has specific jurisdiction over Emcure in this case. (See MTD Resp. at 6 n.2 ("HDT does not argue for general jurisdiction over Emcure here.").) HDT also contends that Rule 4(k)(2) applies "because Emcure appears to deny that it is subject to general jurisdiction anywhere in the United States." (Id.) Emcure does not deny that Rule 4(k)(2) applies to the court's specific jurisdiction analysis. (See generally MTD Reply.). The court's analysis is therefore limited to determining whether Emcure's United States-based contacts are sufficient to establish specific jurisdiction in this case. See Fed. R. Civ. P. 4(k)(2). If HDT's suit neither arises out of nor relates to Emcure's United States contacts, the court must dismiss the suit for lack of personal jurisdiction. See Bristol-Myers, 582 U.S. at 262, 137 S.Ct. 1773.
Under the first prong of the specific jurisdiction analysis, HDT must show that Emcure purposefully directed its activities toward the United States, purposefully availed itself of the privileges of conducting activities there, or engaged in "some combination thereof." See Impossible Foods Inc. v. Impossible X LLC, 80
F.4th 1079, 1088 (9th Cir. 2023) (quoting Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006)). Purposeful direction and purposeful availment are "distinct concepts," and although purposeful direction analyses are most often used in suits sounding in tort and purposeful availment analyses in those sounding in contract, Schwarzenegger, 374 F.3d at 802, the Ninth Circuit does "not impose a rigid dividing line" between the two, Impossible Foods, 80 F.4th at 1088-89 (quoting Glob. Commodities Trading Grp., Inc. v. Beneficio de Arroz Choloma, S.A., 972 F.3d 1101, 1107 (9th Cir. 2020)).
The purposeful direction inquiry considers whether the defendant (1) "committed an intentional act" that was (2) "expressly aimed at the forum" and (3) "caus[ed] harm" that it knew was "likely to be suffered in the forum," Axiom Foods, Inc. v. Acerchem Int'l, Inc., 874 F.3d 1064, 1069 (9th Cir. 2017) (quoting Wash. Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 673 (9th Cir. 2012)), whereas the purposeful availment inquiry considers the "evidence of the defendant's actions in the forum, such as executing or performing a contract there," to determine whether the defendant invoked "the benefits and protections of its laws," Schwarzenegger, 374 F.3d at 802 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). At the end of the day, however, both tests frame the court's "inquiry into the defendant's 'purposefulness' vis-à-vis the forum[,] ... ensuring that defendants are not 'haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts.'" Impossible Foods, 80 F.4th at 1089 (quoting Glob. Commodities, 972 F.3d at 1107).
B. Application
HDT argues that the court has specific jurisdiction over Emcure in this case based on Emcure's vendor contacts, pre-clinical studies, fundraising efforts, interactions with HDT, misappropriation of HDT's trade secrets, and purported agency relationship with Gennova. (MTD Resp. at 8-23.) The court considers each argument in turn and concludes that none amount to purposeful direction or availment.
a. Contacts with United States Vendors
First, HDT asserts that Emcure "solicited at least four different U.S. companies for specialized supplies and equipment for the vaccine platform, and indirectly solicited two others via their foreign affiliates." (MTD Resp. at 8 (citations omitted).) HDT bases this argument on emails from Dharmesh Kumat, an Emcure employee, to these suppliers. (See id. (citing Berkowitz Decl. 2 (Dkt. ## 153 (sealed), 149 (redacted)) ¶ 14, Exs. 3-6).) In one exemplary email, Mr. Kumat wrote to Aldevron in Fargo, North Dakota, as follows:
Greetings from Emcure!
I take this opportunity to introduce myself. I am Dharmesh Kumat responsible for Global Sourcing and Procurement of RM for Emcure Pharmaceuticals Ltd., India[.] We are one of the fastest growing pharma company [sic] in India, engaged in the manufacturing and distribution of various pharma dosage forms. We require your below products.
...
Best Regards,
Dharmesh Kumat
General Manager-Commercial
Emcure Pharmaceuticals Limited
(Berkowitz Decl. ¶ 2, Ex. 3 at HDT000147.) Although the email does not mention Gennova, Emcure states that Mr. Kumat was only ordering materials on behalf of Gennova and "wasn't working with Emcure on this issue." (MTD Reply at 3-4;
see Kumat Decl. (Dkt. ## 168 (sealed), 163 (redacted)) ¶ 5 ("Whenever I contacted suppliers[,] ... I did so at the direction of Swarnendu Kaviraj, Dr. Sanjay Singh, or another senior Gennova employee.").) Ultimately, it was Gennova, not Emcure, that purchased from these vendors. (E.g., Kumat Decl. ¶ 7, Ex. B (purchase order from Aldevron billing and shipping to Gennova).)
The question is whether orchestrating sales on behalf of a subsidiary constitutes purposeful direction or availment. The court concludes that, in this instance, it does not. In Walden v. Fiore, 571 U.S. 277, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014), the Supreme Court noted that "a defendant's relationship with a plaintiff or third party, standing alone, is an insufficient basis for jurisdiction." Id. at 286, 134 S.Ct. 1115. The Court expanded on this principle in Bristol-Meyers, in which it held that "[t]he bare fact that BMS contracted with a California distributor [was] not enough to establish personal jurisdiction in the State." 582 U.S. at 268, 137 S.Ct. 1773. Due process demands "that a defendant be haled into court ... based on his own affiliation with the" forum, and merely "interacting with other persons affiliated with the" forum is too "random, fortuitous, or attenuated" to establish personal jurisdiction. Walden, 571 U.S. at 286, 134 S.Ct. 1115 (quoting Burger King, 471 U.S. at 475, 105 S.Ct. 2174).
Here, Emcure did not even contract with these suppliers. Instead, it merely interacted with them to secure sales on Gennova's behalf. (See Kumat Decl. ¶ 8) ("Any product or ingredient I helped Gennova procure was shipped to, paid for, and used by Gennova, not by Emcure."). The Ninth Circuit has repeatedly held that "use of the mails, telephone, or other international communications" does not ordinarily "qualify as purposeful activity invoking the benefits and protection of the forum." In re Boon Glob., Ltd., 923 F.3d 643, 653 (9th Cir. 2019) (quoting Roth v. Garcia Marquez, 942 F.2d 617, 622 (9th Cir. 1991)). Moreover, Mr. Kumat's emails to suppliers are insufficient to establish that Emcure "expressly aimed its conduct" at the United States. E*Healthline.com, Inc. v. Pharmaniaga Berhad, No. 2:18-cv-1069-MCE-EFB, 2020 WL 5495284, at *1, *4 (E.D. Cal. Sept. 11, 2020) (finding no specific jurisdiction over a Saudi Arabian company that exchanged emails, conducted teleconferences, and entered into an NDA with a California pharmaceutical manufacturer); see also Applied Underwriters, Inc. v. Combined Mgmt., 371 F. App'x 834, 835 (9th Cir. 2010) (holding "that initial contact and subsequent negotiations are insufficient on their own to establish" personal jurisdiction).
HDT makes a follow-up argument, suggesting that Emcure did not just call United States suppliers but "actually used HDT's trade secrets in the forum" because "Emcure only knew which materials to ask for and which U.S. suppliers to ask because it had learned that information from trade secrets it stole from HDT." (MTD Resp. at 11.) As Emcure argues, however, this information about materials and vendors does not constitute a trade secret. (See MTD Reply at 1-2.) Indeed, the ingredients and vendors are listed in HDT's publicly-available complaint. (See Am. Compl. ¶¶ 212, 224 (disclosing ingredients and quantities of materials in addition to vendors, including Aldevron).) Trade secrets are valuable because they are "unknown to others," and the owner must attempt to keep them secret. InteliClear, LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653, 657 (9th Cir. 2020) (listing the elements of a trade secret). Because anyone with a PACER account can access this information, it cannot be true that the materials and vendors are HDT's trade
secrets. See id. Thus, Emcure did not misappropriate trade secrets by calling suppliers in the United States to ask for materials used in vaccine production.
Accordingly, Emcure's contacts with United States vendors do not amount to purposeful direction or availment.
b. Pre-Clinical Studies
HDT next attempts to establish specific jurisdiction by arguing that Emcure funded pre-clinical studies in the United States to study the vaccine's efficacy. In support of these assertions, HDT points to an email chain in which Gennova employee Tathagata Mukherjee asks Charles River Laboratories ("CRL"), the company that conducted the studies, whether "we can process the payment after tax deduction?" (Berkowitz Decl. 2 ¶ 23, Ex. 19 at EMCURE00009204.) After receiving confirmation from CRL, Mr. Mukherjee wrote to employees at Emcure, instructing them to "proceed with payment." (Id. at EMCURE00009202-03.) Another Emcure employee then instructs the team to "transfer this fund from [the] COVID19 account." (Id. at EMCURE00009201.)
Emcure states that "HDT commissioned and oversaw these studies" but, due to HDT's inability to pay for them, "asked Gennova to pay." (10/25/23 Singh Decl. (Dkt. ## 169 (sealed), 165 (redacted)) ¶ 4.) Gennova's CEO "authorized the payment[,] and employees in Emcure's payment processing group calculated the taxes and processed the check." (Id.) According to Gennova executive Swarnendu Kaviraj, the "payments are made from Gennova's funds" and "[t]he employees in Emcure's payment processing team are not permitted to make payments on Gennova's behalf without [Gennova's] approval." (Kaviraj Decl. (Dkt. ## 167 (sealed), 164 (redacted)) ¶ 4.) This is how all 22 Emcure subsidiaries handle payments. (See id.)
HDT cites no case law suggesting that a parent company's handling of payments on its subsidiary's behalf constitutes purposeful availment or purposeful direction. (See generally MTD Resp.) Moreover, "shared payroll and other administrative services are typical of parent-subsidiary relationships so long as the subsidiary pays for those services." E.E.O.C. v. Con-Way, Inc., No. CV 06-1337-MO, 2007 WL 2610367, at *5 (D. Or. Sept. 4, 2007). Emcure's accounting department may process payments on Gennova's behalf, but this typical practice does not necessarily demonstrate that Emcure committed an intentional act expressly aimed at the forum or that it purposefully availed itself of the benefits and protections of the laws of the United States. See Axiom Foods, 874 F.3d at 1069; Schwarzenegger, 374 F.3d at 802. The court concludes that Emcure's limited role in processing payments related to pre-clinical studies in the United States is too attenuated to constitute purposeful direction or purposeful availment.
c. Fundraising
HDT's third argument concerns Emcure's fundraising efforts in the form of a "roadshow" that Emcure allegedly conducted in order to attract American investors to support its initial public offering ("IPO") on the Indian stock exchanges. (MTD Resp. at 9-10.) HDT argues that, during this roadshow, Emcure's CEO "met, emailed, and secured commitments to invest from at least two U.S. institutions based on the mRNA platform." (Id. at 10.) Emcure responds that Indian merchant bankers led the IPO and that no meetings occurred in the United States. (MTD Reply at 8.) According to Emcure, "two USbased investors attended one [meeting] each, but no one from the US invested in Emcure." (Id. (citing Nahar Decl. (Dkt. # 160) ¶ 5).) The only case HDT cites in support of this argument is Struck v. Gao, No. LA CV 22-02415-SPG-MAA, 2022 WL 16858015 (C.D. Cal. Aug. 18, 2022), which does not concern personal jurisdiction. See generally id. HDT suggests Struck stands for the proposition that "[r]aising money on the back of stolen trade secrets is a quintessential improper use" (MTD Resp. at 12), but the trade secrets at issue in Struck consisted of "investor and client information" and "key industry contacts" the defendants allegedly used to identify investors "to launch a competing block-chain, venture capital fund," 2022 WL 16858015, at *1. In other words, contacting the investors was itself an act of trade secret misappropriation. See Struck, 2022 WL 16858015, at *1, *5. Struck did not involve a situation, like here, in which the defendant allegedly touted its possession of trade secrets to raise money from investors.
The fact that two United States investors attended meetings concerning Emcure's IPO on the Indian stock exchanges, but did not ultimately invest in Emcure, does not mean Emcure has purposefully availed itself of the privileges of conducting business in the United States because no business ever was conducted in the United States. Moreover, even assuming Emcure's presentation to the investors was expressly aimed at the United States, the purposeful direction inquiry requires the defendant's intentional act to have caused some sort of harm, and HDT makes no allegations that Emcure harmed it by presenting to two United States investors who ultimately chose to take their money elsewhere. See Axiom, 874 F.3d at 1069. (See generally Am. Compl.; MTD Resp.)
The court therefore concludes that Emcure's United States contacts with respect to its IPO are insufficient to establish purposeful direction or purposeful availment in this case.
d. Contact with HDT
HDT's fourth argument concerning specific jurisdiction relates to Emcure's direct contacts with HDT. (See MTD Resp. at 10-11.) HDT states that Emcure exchanged emails and phone calls with it concerning payments under the License Agreement, Gennova's clinical data, and future collaboration. (Id. at 10.) Again, however, the Ninth Circuit ordinarily does not consider such communications to invoke the benefits and protections of the forum. See In re Boon, 923 F.3d at 653. And in E*Healthline.com, even though the international defendant actually communicated "with [the] plaintiff by telephone and email," those communications "d[id] not qualify as purposeful activity for purposes of specific jurisdiction." 2020 WL 5495284, at *3-4. Emcure's occasional email and phone contacts with HDT simply do not rise to purposeful direction or purposeful availment.
e. Theft of Trade Secrets
HDT's fifth argument in support of specific jurisdiction is that Emcure's alleged "theft of American technology" "intentionally caused harm to HDT in the United States" and thus justifies the court's exercise of personal jurisdiction over Emcure. (MTD Resp. at 14.) According to HDT, the fact that "Emcure now competes with HDT in the global vaccine market," "standing alone," is sufficient to establish specific jurisdiction. (Id. (emphasis omitted).) HDT relies on this court's decision in Fluke Electronics Corp. v. CorDEX Instruments, Inc., No. C12-2082JLR, 2013 WL 566949 (W.D. Wash. Feb. 13, 2013), and the Ninth Circuit's decision in Burri Law PA v. Skurla, 35 F.4th 1207
(9th Cir. 2022), to support its argument. (See MTD Resp. at 13-14.)
Fluke does not compel a finding of personal jurisdiction over Emcure in this case. In Fluke, the plaintiff, a Washington-based business, accused former employees of accessing its trade secrets and using them "to wrongfully compete with and inflict damage upon" the company in Washington. 2013 WL 566949, at *6. The court observed that "[a] defendant's acts are purposefully directed at the forum state if they were committed in order to compete against a plaintiff in the forum state." Id. (brackets omitted) (quoting Alt. Legal Sols., Inc. v. Ferman Mgmt. Servs., Corp., No. 07-880-ST, 2008 WL 65584, at *6 (D. Or. Jan. 4, 2008)). Because the defendants had "travel[ed] to Washington multiple times during their employment" and allegedly attempted to divert existing and potential customers away from the plaintiff and toward a new company, the court had specific jurisdiction over them. Id. at *4. Here, Emcure's connections to Washington are far more attenuated, and there are no allegations that Emcure is attempting to compete with HDT in the United States.
Moreover, as Emcure argues, the Supreme Court's decision in Walden v. Fiore, 571 U.S. 277, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014), provided additional clarity post-Fluke. In Walden, the Supreme Court clarified that "an injury is jurisdictionally relevant only insofar as it shows that the defendant has formed a contact with the forum" and instructed that "[t]he proper question is not where the plaintiff experienced a particular injury or effect but whether the defendant's conduct connects him to the forum in a meaningful way." Id. at 290, 134 S.Ct. 1115. In that case, the Court held that the defendant's "actions in Georgia did not create sufficient contacts with Nevada simply because he allegedly directed his conduct at plaintiffs whom he knew had Nevada connections." Id. at 289, 134 S.Ct. 1115. Similarly, the bare fact that "Emcure knew ... HDT was a U.S. company that would suffer any harm in the United States" is insufficient to establish personal jurisdiction over Emcure. (MTD Resp. at 13.)
Burri Law does not compel a different outcome. Contrary to HDT's assertion, the Ninth Circuit did not conclude in that case that incidental harm to a forum resident was sufficient to establish personal jurisdiction in that forum. (See id.) Instead, the Court held that personal jurisdiction exists where the defendant purposefully acts "to cause harm in the forum state." 35 F.4th at 1215. In other words, the defendant's actions must be made "for the very purpose of having their consequences felt in the forum." Id. (quoting Brainerd v. Governors of the Univ. of Alta., 873 F.2d 1257, 1259-60 (9th Cir. 1989)). Thus, in Burri Law, personal jurisdiction existed in Arizona because the suit arose from communications that the defendant "directed ... toward Arizona that were defamatory and were designed to interfere with an Arizona lawsuit and an Arizona contract." Id. at 1213.
Unlike the defendant's actions in Burri Law, the purpose of Emcure's alleged trade secret theft was not to cause harm in the United States but rather to manufacture and sell a vaccine abroad. Emcure allegedly sought to market the vaccine in 23 countries around the world including India, but the United States was not one of them. (MTD Resp. at 13-14.) To hold that the "theft of American technology" (id. at 14) alone is sufficient to establish personal jurisdiction in the United States would "improperly attribute[] a plaintiff's forum connections to the defendant and make[] those connections 'decisive' in the jurisdictional analysis," contrary to Walden, 571 U.S. at 289-90, 134 S.Ct. 1115. See also id. ("[M]ere injury to a forum resident is not a
sufficient connection to that forum." (citing Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984))). As described above, Emcure's alleged theft of trade secrets does not establish a meaningful connection to the United States, and the fact that HDT is an American company cannot overcome this conclusion and tip the scales in its favor. See id. at 285, 134 S.Ct. 1115 ("Put simply, however significant the plaintiff's contacts with the forum may be, those contacts cannot be 'decisive in determining whether the defendant's due process rights are violated.'" (quoting Rush v. Savchuk, 444 U.S. 320, 332, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980))).
Accordingly, HDT has failed to show that Emcure's alleged misappropriation of its trade secrets abroad constitutes purposeful direction or availment sufficient to establish specific jurisdiction in the United States.
f. Agency Theory
Lastly, in the final pages of its response brief, HDT argues that the court should consider "Gennova's jurisdictionally relevant conduct" in determining whether it has personal jurisdiction over Emcure. (MTD Resp. at 20.) HDT does not assert that Gennova is Emcure's alter ego but instead argues that Emcure, acting as principal, controlled Gennova's activities in the United States, and that Gennova acted on Emcure's behalf as its agent. (See id. at 19-23.)
As Emcure argues, the case law on this issue is not entirely clear. (See MTD Reply at 10). Since the Supreme Court's decision in Daimler AG v. Bauman, 571 U.S. 117, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), and the Ninth Circuit's decision in Williams v. Yamaha Motor Co., 851 F.3d 1015 (9th Cir. 2017), however, this court has continued to recognize agency as relevant to the specific jurisdiction inquiry. See Blackstone Int'l, Ltd. v. E2 Ltd., No. C20-1686TSZ, 2022 WL 16553034, at *4 (W.D. Wash. Oct. 31, 2022); accord Diaz v. One Techs., LLC, No. 22-55190, 2023 WL 6633842, at *1 (9th Cir. Oct. 12, 2023) ("[F]or purposes of personal jurisdiction, the actions of an agent are attributable to the principal." (quoting Sher v. Johnson, 911 F.2d 1357, 1362 (9th Cir. 1990))).
"To find an agency relationship, the 'parent company must have the right to substantially control its subsidiary's activities.'" Diaz, 2023 WL 6633842, at *1 (quoting Williams, 851 F.3d at 1024-25). "The control exercised in a typical parent-subsidiary relationship," however, "is insufficient to create an agency relationship." Van Maanen v. Youth With a Mission-Bishop, 852 F. Supp. 2d 1232, 1249 (E.D. Cal. 2012), aff'd sub nom. Van Maanen v. Univ. of the Nations, Inc., 542 F. App'x 581 (9th Cir. 2013). As Judge O'Scannlain noted in Bauman v. Daimler-Chrysler Corp., 676 F.3d 774, 774-79 (9th Cir. 2011) (O'Scannlain, J., dissenting from denial of petition for rehearing en banc), due process demands respect for corporate separateness. Id. at 777 (citing United States v. Bestfoods, 524 U.S. 51, 61, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998) (noting that corporate separateness "is a general principle of corporate law deeply ingrained in our economic and legal systems" (internal quotation marks omitted))). Accordingly, "the parent must be shown to have moved beyond the establishment of general policy and direction for the subsidiary and in effect taken over performances of the subsidiary's day-to-day operations in carrying out that policy." Van Maanen, 852 F. Supp. 2d at 1249 (quoting Sonora Diamond Corp. v. Superior Ct., 83 Cal. App.4th 523, 99 Cal. Rptr. 2d 824, 838-39 (2000)) (collecting cases); see also Laughlin v. Fresenius Med. Care Holdings, Inc., No. 2:23-CV-0180-TOR, 2023 WL 7093801, at *2 (E.D. Wash. Oct. 26, 2023) ("An alter
ego or agency relationship is typified by parental control of the subsidiary's internal affairs or daily operations." (quoting Kramer Motors, Inc. v. Brit. Leyland, Ltd., 628 F.2d 1175, 1177 (9th Cir. 1980))).
Here, HDT argues that Emcure "has the right to control Gennova's activities as a general matter," and is thus Gennova's principal, because Emcure personnel hold senior management positions at Gennova, Emcure owns 87.95 percent of Gennova's voting shares, and Emcure previously controlled a majority of Gennova's board seats. (MTD Resp. at 20.) More specifically, HDT asserts that Gennova needed Emcure's approval before it could act after terminating the license agreement and that, through Mr. Desai, "Emcure directed Gennova and Dr. Singh ... to take advantage of an alleged loophole in the License Agreement and claim HDT's technology as their own." (Id. at 21 (citing Berkowitz Decl. 2 ¶ 47). See generally Emails.) These actions, however, are insufficient to establish an agency relationship for purposes of specific jurisdiction, and HDT cites no case law to the contrary.
First, the fact that Emcure owns a majority of Gennova's stock, has previously held a majority of Gennova's board seats, and has employees wearing numerous "hats" are all standard practices between corporate parents and their subsidiaries. "One corporation whose shares are owned by a second corporation does not, by that fact alone, become the agent of the second company." Phx. Can. Oil Co. v. Texaco, Inc., 842 F.2d 1466, 1477 (3d Cir. 1988). It is also "'normal' for a parent and subsidiary to 'have identical directors and officers.'" Bestfoods, 524 U.S. at 69, 118 S.Ct. 1876 (quoting Harry G. Henn & John R. Alexander, Laws of Corporations and Other Business Enterprises 355 (3d ed. 1983)); see also Accent Delight Int'l Ltd. v. Sotheby's, No. 18-CV-9011 (JMF), 2023 WL 2307179, at *16 (S.D.N.Y. Mar. 1, 2023) ("[A] parent sharing corporate officers and directors with a subsidiary does not automatically create an agency relationship."). These facts do not, without more, support a finding of agency.
Second, Emcure's alleged control over aspects of Gennova's vaccine enterprise does not make Gennova its agent. Since the Ninth Circuit's decision in Kramer Motors, courts have consistently held that a parent entity may have "general executive responsibility for the operation of" its subsidiary, "review[] and approve[] its major policy decisions," and "work closely with executives of" the subsidiary without the subsidiary becoming an "agent" "so as to make [the parent] subject to jurisdiction solely through [the subsidiary's] presence in the United States." Kramer Motors, 628 F.2d at 1177. The case whiteCryption Corp. v. Arxan Technologies, Inc., No. 15-cv-00754-WHO, 2016 WL 3275944 (N.D. Cal. June 15, 2016), is instructive. There, discovery showed that two of a parent company's executives, "who facially ha[d] no role in [the parent's subsidiary], were involved in conversations or decisions related to" the subsidiary, including changing its website, pricing its products, identifying its customers, monitoring its transactions, "approving the withholding of technical support from [the counterclaimant], and negotiating issues with [the counterclaimant] in relation to" the agreement at issue. Id. at *9. These activities, however, "appear[ed] to be more consistent with higher level policy and strategy decisions" than control of "day-to-day" operations. Id. at *11. Because "[a]gency requires more than 'the degree of direction and oversight normal and expected from the status of ownership,'" the counterclaimant's allegations were "insufficient to establish agency." Id. (quoting Sonora, 99 Cal. Rpt. 2d at 838). The isolated events relied upon by HDT fall short of plausibly suggesting that Emcure controlled Gennova's day-to-day operations concerning the vaccine. For example, Gennova's hesitancy to deal with HDT after giving notice of its intent to terminate the license agreement because it needed Emcure's instructions is consistent with Emcure's "parent investor status" and does not suggest a disregard for corporate formalities. See Bui v. Golden Biotech. Corp., No. 5:13-CV-04939, 2014 WL 4072112, at *2 (N.D. Cal. Aug. 14, 2014) (noting that a parent company may "supervis[e] the subsidiary's finance and capital budget decisions, and articulat[e] general policies and procedures of the subsidiary"). Similarly, Mr. Desai's instruction to Dr. Singh to "[p]lease ensure that this clause is retained at any cost" (Emails at EMCURE00398927; see also MTD Resp. at 21 (alleging that Emcure directed Gennova "to enact the very scheme at the heart of this lawsuit")), is indicative of broader strategic planning and does not evidence Emcure's day-to-day control over Gennova's actions any more than the executives' directions to withhold technical support from the counterclaimant did in whiteCryption, 2016 WL 3275944, at *11.
On top of all this, HDT cites no case law suggesting that the factual allegations in its complaint or response brief establish an agency relationship for purposes of specific jurisdiction. (See generally MTD Resp.) HDT does, however, miscite two of the court's prior orders, which concerned Emcure's "control" over discoverable materials. (Compare MTD Resp. at 20) (asserting that "[i]n another context, this [c]ourt has held that Emcure has the right to control Gennova's activities as a general matter"); with 8/13/22 Order (Dkt. # 53) at 2 (discussing Emcure's "legal right to obtain documents from Gennova in response to a discovery request served by HDT"), and 11/9/22 Order (Dkt. # 87) at 19 (discussing factors related to Emcure's "control over Gennova's documents"). HDT overstates the relevance of the cited discovery orders to the jurisdictional questions at issue here. And to the extent that Emcure may have "controlled" Gennova insofar as it shaped Gennova's broader business objectives, that is insufficient to establish an agency relationship for purposes of specific jurisdiction. Due process demands more.
C. Summary
In sum, having considered Emcure's United States contacts individually and collectively, as well as having considered Gennova's potential status as Emcure's agent, the court concludes that HDT has not established that Emcure purposefully directed its activities toward or availed itself of the benefits and protections of the United States through its American contacts. The court therefore lacks personal jurisdiction over Emcure in this matter and need not address whether HDT's claims arise out of or relate to Emcure's United States contacts or whether the court's exercise of personal jurisdiction would be reasonable in this case.
V. SEALING
Because this order relies on sealed materials, the court DIRECTS the Clerk to provisionally file this order under seal. The court will address the parties' outstanding motions to seal in a separate order, which will also contain instructions for the parties to meet and confer and submit a joint statement or competing statements concerning the portions of this order that they seek to have redacted.
VI. CONCLUSION
For the foregoing reasons, the court GRANTS HDT's motion to compel (Dkt. # 144) and GRANTS Emcure's motion to
dismiss (Dkt. # 136). HDT's claims are hereby DISMISSED without prejudice.