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Abbott Laboratories, Inc. v. Biovalve Technologies

February 12, 2008


The opinion of the court was delivered by: Rebecca R. Pallmeyer United States District Judge

Judge Rebecca R. Pallmeyer


Abbott Laboratories, Inc. ("Abbott") filed a breach of contract action against BioValve Technologies, Inc. ("BioValve") on April 16, 2007. BioValve moved to dismiss Abbott's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) on August 27, 2007, contending that the court lacks personal jurisdiction over it. For the reasons explained below, the court denies BioValve's motion.


The court draws the factual background of this case primarily from the parties' affidavits. See Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003) (citing, inter alia, Nelson v. Park Indus., Inc., 717 F.2d 1120, 1123 (7th Cir. 1983)). All disputes of relevant fact or conflicts in the affidavits will be resolved in favor of the plaintiff. Id.

Abbott is an Illinois corporation with its principal place of business in Abbott Park, Illinois. (Compl. ¶ I.A.) BioValve is a Delaware corporation with its principal place of business in Shrewsbury, Massachusetts. (Compl. ¶ I.B.) There is no dispute that--as BioValve's President and CEO Robert Gonnelli has attested--BioValve has no offices in Illinois, no manufacturing facilities in Illinois, no employees employed in Illinois, no Illinois bank account, and no Illinois telephone number. (Docket Entry No. 17, Gonnelli Aff. ¶¶ 1, 3.) BioValve is not licensed to conduct business in Illinois and does not regularly conduct business in Illinois. (Id. ¶ 3.) It does not solicit business or advertise in Illinois. (Id.) Aside from this litigation, BioValve has never been named as a party to an action in Illinois. (Id. ¶ 5.) The parties therefore dispute whether this court has jurisdiction to adjudicate Abbott's breach of contract claim against BioValve.

Apparently, BioValve's only contact with the state of Illinois is related to the contract at issue in this lawsuit. Early in 2005, Deborah Davis--Abbott's Program Manager of Global Pharmaceutical Research and Development ("GPRD"), Process Research and Process Development--identified several potential Abbott customers in the Research Triangle Park area of North Carolina. (Docket Entry No. 24, Davis Aff. ¶¶ 1, 4.) One of these potential customers was DarPharma, Inc., a virtual company with no research and development facilities of its own. (Id. ¶¶ 4-5.) Prabha Fernandes, a former Abbott employee, headed DarPharma. (Id. ¶ 5.) Despite DarPharma's lack of research and development facilities, Davis "was told that DarPharma was developing a compound known as DAR-0100," which was structurally similar to a previous Abbott development product. (Id. ¶ 6.) David E. Nichols, a Purdue University professor, developed the molecule that underlies DAR-100. (Docket Entry No. 28, Gonnelli Supp. Aff. ¶ 2.) BioValve licenses the DAR-100 molecule, but it pays the licensing fees pursuant to a licensing agreement that originally ran between Purdue University and DarPharma rather than directly to Nichols. (Id. ¶ 3.)

After receiving additional information about DAR-0100, on March 31, Abbott submitted a proposal to Fernandes, in which Abbott proposed to prepare one kilogram of DAR-0100. (Davis Aff. ¶ 7.) In April 2005, Fernandes told Davis that DarPharma would work with BioValve on the DAR-0100 project, that BioValve would review Abbott's proposal, and that BioValve would pay for Abbott's work. (Id. ¶ 8.) The parties have provided no further explanation of the relationship between DarPharma and BioValve, but it is clear that BioValve became active in the DAR-0100 project in the spring of 2005. Abbot sent several versions of its proposal to DarPharma, and BioValve reviewed them. (Id. ¶ 9.) Between April 4 and July 18, Davis discussed changes and revisions to the proposal over e-mail and in a June 21 meeting with Fernandes. (Id.) On July 18, 2005, Davis submitted the final proposal to BioValve. (Id. ¶ 10.) On August 2, Davis on behalf of Abbott, Fernandes on behalf of DarPharma, and at least five BioValve managers met in Massachusetts to establish expectations for the DAR-0100 project. (Id. ¶¶ 11-12.)

As explained above, BioValve was to pay for Abbott's work on the DAR-0100 project. On July 22, 2005, Edward O'Keefe--an Abbott Senior Financial Analyst supporting the GPRD Division--called and e-mailed BioValve to request a purchase order. (Docket Entry No. 23, O'Keefe Aff. ¶¶ 1, 4.) On July 29, Michele Carter--a BioValve employee--sent O'Keefe a purchase order by e-mail, which O'Keefe deemed consistent with "the proposal." (O'Keefe Aff. ¶ 5.) Bob Gonnelli and Jim Patzke approved the Purchase Order, which is for "Process Development & Manufacture of Chiral API (1kg)" at a unit price of $590,000. (Ex. 1 to O'Keefe Aff., E-mail from O'Keefe to Davis of 8/1/05.) Gonnelli is BioValve's President and CEO, while Patzke is BioValve's Director of Quality. (Davis Aff. ¶ 11; Gonnelli Aff. ¶ 1.) For jurisdictional purposes, it is significant to note that there is no suggestion that the Purchase Order contained a choice of law provision, that the Purchase Order contained a choice of jurisdiction provision, or that BioValve has entered into any other contracts with Abbott.

Abbott has facilities, among other places, in both Illinois and Massachusetts. BioValve's President and CEO claims that "[w]hen Biovalve first approached Abbott about producing the DAR-100A, Biovalve was well aware of the existence of Abbott's Worcester [Massachusetts] facility."*fn1 (Gonnelli Aff. ¶ 7.) Nevertheless, BioValve acknowledges that it had "no role" in selecting which Abbott facility would produce the DAR-100A. (Id. ¶ 9.) Davis' project team began working on the DAR-0100 project in early August 2005. (Davis Aff. ¶ 13.) Abbott "unilaterally" selected its North Chicago, Illinois facility as the location for all research, development, manufacture, and storage of DAR-0100. (Gonnelli Aff. ¶ 10; Davis Aff. ¶ 28.) Wayne Pritts and Dan Plata--both Abbott Senior Group Leaders of GPRD Process Research and Development--were members of the project group working on the synthesis of DAR-0100. (Docket Entry No. 26, Pritts Aff. ¶¶ 1-4; Docket Entry No. 25, Plata Aff. ¶ 1-4.) Pritts and Plata have confirmed that all analytical method developing and testing as well as production of DAR-0100 occurred at Abbott's North Chicago facility. (Pritts Aff. ¶ 5; Plata Aff. ¶¶ 5, 11.) Abbott's Worcester facility was "in no manner" involved with the DAR-0100 project. (Davis Aff. ¶ 29.)

Beginning in August 2005, Abbott was in direct communication with DarPharma regarding the DAR-0100 project. Until the end of December 2005, Davis, Fernandes, and Nichols--the developer of the molecule underlying DAR-100--conducted all communications related to the DAR-0100 project. (Davis Aff. ¶ 14.) No further details have been provided about where these communications originated, how frequent they were, or when they took place, but both Abbott and BioValve apparently agree that BioValve was not in direct communication with Abbott about the DAR-0100 project at this stage.*fn2 Then, on December 20, 2005, Fernandes advised Davis that she was resigning on December 31. (Davis Aff. ¶ 15.) Fernandes told Davis to communicate, in the future, with Scott Huie of BioValve. (Id.) Thus, Abbott and BioValve began communicating directly with one another in 2006.

On two occasions in 2006, BioValve employees also visited the Abbott facilities in North Chicago, Illinois. Huie and Davis set up the first meeting in January 2006, with the Abbott project team, Huie, and one other BioValve representative. (Davis Aff. ¶¶ 16-17.) In an e-mail to Davis, Huie describes the purpose of the meeting as being to "review the status of the DAR 100A synthesis" and to "audit the facility and procedures and review specifications based on [Abbott's] small batch run results." (Ex. 1 to Davis Aff., E-mail from Huie to Davis without identifying header information.) According to his e-mail, Huie expected the meeting to last for at least five hours. (Id.) At the meeting, Plata, on behalf of Abbott, presented to BioValve the DAR-0100 project status and proposed timeline for completion. (Plata Aff. ¶¶ 8-9.) Plata never mentioned Abbott's Massachusetts facility, or any non-Illinois facility, during his presentation. (Id. ¶ 11) As a part of the January 2006 visit to Abbott's Illinois facilities, on January 9, 2006, BioValve employees Patzke and Huie conducted a "customer audit" of Abbott's North Chicago production facility and provided a detailed report. (Davis Aff. ¶ 18.)*fn3 Huie's e-mail does not make clear to whom the report was provided, but Abbott asserts that it was given to Davis. (Pl.'s Opp. at 8.) Following the meeting, Davis and her team advised BioValve employees that the project would not be complete until late April and agreed to provide BioValve with regular updates regarding the project. (Davis Aff. ¶ 19.)

BioValve's employees made a second trip to Illinois almost three months later. On March 29, 2006, Huie, Patzke, Ron Nardi, and Dan Connors--all BioValve employees--attended a meeting with Abbott employees in Illinois. (Davis Aff. ¶¶ 11, 20.) At the March 2006 meeting, Plata reported on the progress of the project; he made no mention of any Abbott facility other than North Chicago. (Plata Aff. ¶¶ 10-11.) Pritts also participated in the meeting on Abbott's behalf. (Pritts Aff. ¶ 9.) According to Pritts, the parties discussed and verbally agreed on "final API specifications that would be used to test and release the DAR-0100 that was being produced." (Id. ¶ 10; see also Davis Aff. ¶ 21.) In an e-mail message dated April 6, BioValve ultimately approved the specifications that the parties had discussed in the March 29 meeting. (Davis Aff. ¶ 22.)

On April 30, 2006, Davis advised BioValve employees that the synthesis of DAR-0100 was complete, though it is not clear by what means this information was communicated. (Davis Aff. ¶ 24.) At BioValve's request, the product was packaged in 100-gram portions, in amber glass bottles, and refrigerated in Abbott's North Chicago facility. (Id. ¶ 25.) Also at BioValve's request, on May 8, 2006, Davis sent BioValve a report comparing the analytical methods used at Abbott with the "old" methods used. (Id. ¶ 23.) At the end of that month, Davis advised BioValve (though again, it is not clear by what means) that the product was tested and approved for shipment. (Id. ¶ 26.) Davis then contacted Huie by telephone and e-mail to receive shipping information, but she never obtained the information ...

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