PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 09-3790
_____________
EUROFINS PHARMA US HOLDINGS; VIRALLIANCE
INC.,
Appellants
v.
BIOALLIANCE PHARMA SA; VIRALLIANCE SAS;
GILLES AVENARD
______________
APPEAL FROM THE UNITED STATES DISTRICT
COURT
FOR THE DISTRICT OF DELAWARE
(D.C. Civ. Action No. 08-613)
District Judge: Honorable Gregory M. Sleet
______________
Argued: July 13, 2010
______________
Before: RENDELL, JORDAN, and GREENAWAY, JR.,
Circuit Judges
(Opinion Filed: October 12, 2010)
______________
Daniel P. Goldberg (argued)
Dorit Ungar
Kristina R. Juntunen
Kasowitz, Benson, Torres, & Friedman, LLP
New York, New York 10019
Counsel for Appellants
Joel Friedlander (argued)
Sean M. Brennecke
Bouchard Margules & Friedlander
222 Delaware Avenue, Suite 1400
Wilmington, Delaware 19801
Counsel for Appellees
______________
OPINION
______________
GREENAWAY, JR., Circuit Judge
Appellants Eurofins Pharma US Holdings and Viralliance
Inc. appeal the dismissal of their complaint by the United States
District Court for the District of Delaware, which held that it
lacked personal jurisdiction over the appellees, BioAlliance
2
Pharma SA, Viralliance SAS, and Gilles Avenard, and also
dismissed the action under the doctrine of forum non conveniens.
For the reasons that follow, we will affirm the District Court’s
ruling that it lacks personal jurisdiction over BioAlliance Pharma
SA and Viralliance SAS, vacate the District Court’s order that it
lacks personal jurisdiction over Gilles Avenard, and affirm the
District Court’s dismissal of the action under forum non
conveniens.
I. BACKGROUND
This dispute arises out of the acquisition by appellants
Eurofins Pharma US Holdings (“EPUSH”) and Viralliance Inc.
(“VI”) (collectively, “Eurofins Group”) of intellectual property
(the “IP”) from BioAlliance Pharma SA (“BioAlliance”) and
Viralliance SAS (“Viralliance”) (collectively, “BioAlliance
Group”). The IP includes, among other things, in vitro
phenotyping technology, known as assays, that assist in the
development and administration of drugs used to treat HIV and
Hepatitis B by testing the effectiveness of those drugs on specific
patients’ viruses. In 2005, Eurofins Group and BioAlliance
Group entered into an agreement (the “Transfer Agreement”) to
transfer the IP from BioAlliance Group to VI, for the purpose of
commercializing the IP in the United States market.
The gravamen of Eurofins Group’s complaint is that,
despite BioAlliance Group’s contractual promise that no claims
were pending or threatened against it regarding the use of the IP,
BioAlliance Group knew about a patent infringement claim
threatened against the IP by Advanced Biological Laboratories,
S.A. (“ABL”); that Gilles Avenard—a director of VI, the co-
founder and chief operating officer of BioAlliance, and the
3
former president and chief executive of Viralliance—failed to
inform the other VI board members of the threatened claim; and
that BioAlliance Group wrongly asserts that it continues to own
the IP.
A. The Parties
EPUSH is a holding company incorporated in Delaware
with its principal place of business in Des Moines, Iowa.
Eurofins Scientific, Inc. (“Eurofins Scientific”), an affiliate of
EPUSH, is a Delaware corporation with its principal place of
business in Des Moines, Iowa. (EPUSH and Eurofins Scientific
will be collectively referred to as “Eurofins.”) VI, a corporation
formed under the laws of Delaware with its principal place of
business in Des Moines, Iowa, was created by, and is a wholly-
owned subsidiary of, Eurofins.1 VI is the acquirer, via the
Transfer Agreement, of the IP at the heart of this litigation.
BioAlliance, a société anonyme 2 formed under the laws of
France, with its principal place of business in France, is a
pharmaceutical company focused on the treatment of
opportunistic infections in cancer and HIV. Viralliance was a
simplified société anonyme and wholly-owned subsidiary of
BioAlliance, formed under the laws of France, which was
1
VI was formerly known as Eurofins Viralliance, Inc., and
is referred to as “EVI” in the Transfer Agreement and several
court documents. For the purpose of clarity, all references to
EVI are changed to VI in this opinion.
2
“Société anonyme” is the French term used to designate a
corporation.
4
engaged in the development and commercialization of products
and services to assess viral and cancer drug resistance. Avenard,
a director of VI and the co-founder and chief executive officer of
BioAlliance, is a citizen of France. He was also the president
and chief executive officer of Viralliance.
B. The Transfer Agreement
The Transfer Agreement was executed on October 20,
2005, and the transaction, pursuant to the Transfer Agreement,
closed on December 15, 2005. The parties agree that the
majority, if not the entirety, of the Transfer Agreement
negotiations took place in France. Of the individuals involved in
the Transfer Agreement negotiations, only Jonathan Lapin, a
New York lawyer who assisted Eurofins Group, was not
domiciled in Europe.3
The Transfer Agreement provided that Eurofins formed
VI as its wholly owned subsidiary and that it (Eurofins) would
fund VI with up to $4 million. In exchange, BioAlliance Group
would transfer the IP to VI for ten dollars and the future right to
purchase stock options in VI (the “Option”). (App. at 59-60.) In
addition, the Transfer Agreement provided that Eurofins would
elect one person nominated by BioAlliance to VI’s board of
directors while BioAlliance Group’s Option remained
outstanding. (App. at 65.)
The Transfer Agreement states that, to the best of
BioAlliance Group’s knowledge, “the IP is valid and enforceable
and the current use by BioAlliance Group or its licensees or sub-
3
Lapin also incorporated VI in Delaware.
5
licensees [] neither infringes on the rights of any third party nor
constitutes an unauthorized use,” (App. at 63), and that “there is
no fact which could have a material adverse effect on either of
[]VI or the IP which has not previously been disclosed in writing
by [BioAlliance Group].” (App. at 62.)
The transfer from BioAlliance Group to VI of the IP
included the transfer of BioAlliance Group’s right, title, and
interest in and to all agreements, including licenses, relating to
the IP. (App. at 60.) Prior to the Transfer Agreement,
BioAlliance Group had licensed patents that comprise part of the
IP to Specialty Laboratories, Inc. (“Specialty Labs”). The
licensing agreement between BioAlliance Group and Specialty
Labs contained a non-infringement representation and warranty,
as well as an indemnification obligation by BioAlliance Group,
in favor of Specialty Labs. Eurofins Group assumed the
indemnification obligation under the Transfer Agreement.
The Transfer Agreement “embod[ied] the entire
agreement of the parties with respect to the subject matter
hereof” and provided that the agreement “shall be governed by
and construed in accordance with the laws of the State of
Delaware, without regard to the conflicts of law rules of such
State.” (App. at 67.) It did not, however, contain a forum
selection clause.4
C. ABL’s Claim Against The IP
4
The parties agreed that there would be no forum selection
clause, which resulted from their inability to decide on a
mutually acceptable forum.
6
On or about July 15 and August 23, 2006, ABL contacted
Specialty Labs to claim that its use of certain phenotyping
technology, licensed to it by BioAlliance Group, infringed two
ABL patents—U.S. Patent Numbers 6,081,786 and 6,188,988.
On January 27, 2007, ABL sued AmeriPath, Inc., the corporate
parent of Specialty Labs, for patent infringement.5 VI stepped in
to defend the action, pursuant to its contractual obligation to
indemnify Specialty Labs. After six months of negotiations, the
parties settled the lawsuit. Under the settlement, ABL granted VI
a non-exclusive license to use patents 6,081,786 and 6,188,988,
in consideration for a one-time payment and royalties.
The crux of the instant litigation is Eurofins Group’s
allegation that it learned for the first time during the settlement
negotiations that ABL, in early 2005, had informed BioAlliance
Group that it (BioAlliance Group) required a license from ABL,
with respect to the phenotyping technology. ABL had been in
negotiations with BioAlliance Group to purchase Viralliance’s
assets prior to Eurofins Group’s involvement. ABL also
allegedly informed Eurofins Group that, in early 2005, ABL
engaged the services of La Societe Bionest Partners (“Bionest”)
to advise BioAlliance Group that it required a license from ABL
with respect to the phenotyping technology. Eurofins Group
alleges that Bionest has at least one piece of written
5
Eurofins Group did not attach as an exhibit to the complaint
the ABL Settlement License because the complaint is subject to
confidentiality restrictions that require ABL’s consent prior to
disclosure. Eurofins Group, however, has declared that it seeks
to submit a copy of the ABL Settlement License during this
litigation.
7
correspondence reflecting the infringement claim it articulated on
behalf of ABL to BioAlliance Group in late 2004 or early 2005.
Eurofins Group has, as yet, been unable to procure this document
due to confidentiality obligations asserted by BioAlliance
Group.6
At a July 22, 2008, meeting of the VI Board of Directors,
Avenard confirmed that BioAlliance knew about the ABL claim
in 2005, and that BioAlliance refused to consent to the release of
the Bionest correspondence. The minutes of that meeting
provide:
The fifth order of business was a discussion of
[BioAlliance’s] reasons for refusing to consent to
the disclosure by Bionest of its dossier relating to
efforts of Bionest (on behalf of [ABL]) to acquire
the Viralliance business from [BioAlliance] in
2005. . . . Mr. Avenard explained that
[BioAlliance’s] consent to Bionest’s disclosure
request was withheld because the Bionest dossier
contains confidential and sensitive strategic
information relating to [BioAlliance’s] efforts to
sell the Viralliance business and not relevant to
VI. Mr. Avenard went on to say that, as a
6
ABL has agreed to produce the document to Eurofins
Group, provided that BioAlliance Group consents to the
disclosure. Thus far, BioAlliance Group has refused to give its
consent.
8
negotiating tactic in 2005, Mr. Sayada 7 alleged
that the Viralliance business infringed on ABL
patents (in order to justify making a lower offer
for the Viralliance assets) and that, at the time,
BioAlliance had obtained legal opinions (which
BioAlliance had but would not make available)
that there was no infringement.
(App. at 131.)8
7
Sayada was an ABL executive in 2005, at the time that it
was negotiating with BioAlliance.
8
Avenard refused to sign the minutes for that meeting.
Instead, he circulated a revised version of the minutes, which
provided:
Mr. Avenard explained that [BioAlliance’s]
consent to Bionest’s disclosure request was
withheld because the Bionest dossier contains
confidential and sensitive elements of business
negotiation[s] relating to [BioAlliance’s] effort to
sell the Viralliance business and not relevant to
VI, which was acknowledged by Jonathan Lapin.
Mr. Avenard went on to say that things were very
clear with ABL patents and that they had nothing
to do with Viralliance system. It appeared that, in
2005, as a negotiating tactic, Mr. Sayada proposed
a license on a complementary technology in order
to enlarge the business perspectives, in the unique
objective to justify making a lower offer for the
9
In connection with the Transfer Agreement, Eurofins Group and
BioAlliance Group also entered into a Technical Assistance and
Research Agreement (“TARA”). Pursuant to the TARA, BioAlliance
Group was given a license to the IP in order to develop it for VI’s
benefit. VI would own any of the technology that was developed in
accordance with the TARA and was obligated to reimburse BioAlliance
Group for research-related expenses. The instant litigation also
concerns a dispute over certain technology developed by BioAlliance
Group that VI claims ownership over, pursuant to the TARA.
D. The Litigation
On September 23, 2008, Eurofins Group sued BioAlliance
Group and Avenard in the United States District Court for the
District of Delaware.9 On October 28, 2008, BioAlliance Group
and Avenard moved to dismiss the complaint. On January 29,
2009, BioAlliance filed suit against Eurofins Group and ABL in
Viralliance assets.
(App. at 144.)
9
The complaint stated eight causes of action: (1) fraudulent
inducement against BioAlliance Group, seeking rescission; (2)
fraudulent inducement against BioAlliance Group, seeking
damages; (3) equitable fraud against BioAlliance Group; (4)
breach of contract against BioAlliance Group; (5) breach of
fiduciary duties against Avenard; (6) declaratory judgment
against BioAlliance Group; (7) infringement against
BioAlliance Group; and (8) conversion against BioAlliance
Group.
10
the Commercial Court in Paris, France. On March 11, 2009,
BioAlliance Group and Avenard filed a motion to stay discovery
in the Delaware action pending the outcome of their motion to
dismiss.
On July 6, 2009, the District Court held a teleconference,
pursuant to Federal Rule of Civil Procedure 16, to discuss the
motions to dismiss and stay discovery. During the
teleconference, the Court issued an oral order staying discovery
in the case pending its ruling on the motion to dismiss: “in a de
facto sort of way, I am going to [] grant[] the motion for [a] stay,
though not formally.” (App. at 426.)
On September 18, 2009, the District Court granted
BioAlliance Group’s and Avenard’s motion to dismiss. Eurofins
Pharma U.S. Holdings, Inc. v. Bioalliance Pharma SA, No. 08-
613, 2009 WL 2992552 (D. Del. Sept. 18, 2009). Specifically,
the Court held that the claims against BioAlliance Group and
Avenard should be dismissed for lack of personal jurisdiction,
and that the action should be dismissed under the doctrine of
forum non conveniens. Id. at *3. Additionally, the Court denied
Eurofins Group’s request to take jurisdictional discovery. Id. at
*3 n.4.
On February 17, 2010, Eurofins Group filed the instant
appeal challenging each of the District Court’s holdings.
II. JURISDICTION
The District Court’s jurisdiction was premised on 28
U.S.C. § 1332(a)(3). We have jurisdiction to hear this appeal
under 28 U.S.C. § 1291.
III. ANALYSIS
11
For the reasons addressed below, we will affirm the
District Court’s dismissal of the claims against BioAlliance
Group for lack of personal jurisdiction and the District Court’s
denial of Eurofins Group’s motion for jurisdictional discovery
related to BioAlliance Group; we will vacate the District Court’s
dismissal of the claims against Avenard for lack of personal
jurisdiction; and we will affirm the District Court’s dismissal of
the complaint on the ground of forum non conveniens.
A. Personal Jurisdiction Over BioAlliance Group
We review de novo the District Court’s decision that it
lacks personal jurisdiction. Telcordia Tech Inc. v. Telkom SA
Ltd., 458 F.3d 172, 176 (3d Cir. 2006).
Under Federal Rule of Civil Procedure 4(e), a federal
district court may assert personal jurisdiction over a nonresident
of the state in which the court sits to the extent authorized by the
law of that state. Whether a district court has personal
jurisdiction over a nonresident defendant is a two-part inquiry.
First, there must be a statutory basis for exercising jurisdiction
over the nonresident defendant in accordance with the law of the
forum state. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324,
330 (3d Cir. 2009). Second, the nonresident must have minimum
contacts with the forum state sufficient to satisfy constitutional
due process. Id. Where the district court does not hold an
evidentiary hearing, the plaintiff need only establish a prima facie
case of personal jurisdiction. Id. (citing O’Connor v. Sandy Lane
Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007)). Further, “[i]t is
well established that in deciding a motion to dismiss for lack of
[personal] jurisdiction, a court is required to accept the plaintiff’s
allegations as true, and is to construe disputed facts in favor of
12
the plaintiff.” Id. (citing Toys “R” Us, Inc. v. Step Two, S.A.,
318 F.3d 446, 457 (3d Cir. 2003)).
In pertinent part, the Delaware long-arm statute provides
a statutory basis for the exercise of personal jurisdiction over any
nonresident who transacts business or performs work in
Delaware, contracts to supply services or things in Delaware, or
causes tortious injury in Delaware by an act or omission in
Delaware. Del. Code Ann. tit. 10, § 3104(c) (2010).10 Section
3104(c) “is to be broadly construed to confer jurisdiction to the
maximum extent possible under the Due Process Clause.”
Hercules Inc. v. Leu Trust & Banking (Bahamas) Ltd., 611 A.2d
476, 480-81 (Del. 1992).
Eurofins Group alleges that BioAlliance Group transacted
10
Specifically, the relevant text of § 3104 provides:
(c) As to a cause of action brought by any person
arising from any of the acts enumerated in this
section, a court may exercise personal jurisdiction
over any nonresident, or a personal representative,
who in person or through an agent:
(1) Transacts any business or performs any
character of work or service in the State;
(2) Contracts to supply services or things
in this State;
(3) Causes tortious injury in the State by
an act or omission of this State[.]
Del. Code Ann. tit. 10, § 3104.
13
business in Delaware, contracted to provide services in Delaware,
and caused tortious injury in Delaware. Specifically, Eurofins
Group asserts that the Transfer Agreement is based on a joint
venture in which BioAlliance Group retains and asserts active
control over VI. Further, Eurofins Group argues that the
Transfer Agreement is premised on the incorporation of VI as a
Delaware corporation. These arguments are not persuasive.
The terms of the Transfer Agreement do not indicate that
VI is a joint venture or that BioAlliance Group retains any
control over VI. To the contrary, the penultimate paragraph of
the Transfer Agreement states:
Notwithstanding anything to the contrary
contained in this General Agreement or in any of
the other Transaction Documents, no partnership,
joint venture or other similar arrangement or
relationship is being created or shall exist between
BioAlliance Group, on the one hand, and []VI or
Eurofins, on the other hand, under or with respect
to the Transaction Documents.
(App. at 68.) The Transfer Agreement also states explicitly that
“Eurofins wholly[] owns []VI.” (App. at 58.)
In addition, the record lacks evidence that BioAlliance
Group played any part in the decision to incorporate VI in
Delaware. While the purpose of the Transfer Agreement was the
commercialization of the IP in the United States, (App. at 59),
there is no evidence in the record that BioAlliance Group had any
intent that VI be incorporated in Delaware. The record is also
bereft of evidence that BioAlliance Group engages in the
management of VI.
14
Here, it is crucial to distinguish between Avenard, as an
individual, and BioAlliance Group, as corporate entities. While
Avenard, as a member of VI’s board, does participate in the
management of VI, he does so in his capacity as an individual.
It makes no difference that he was nominated by BioAlliance (in
France), nor that Eurofins was bound by the Transfer Agreement
to appoint him. In other words, the relationship between
Eurofins Group and BioAlliance Group is wholly contractual. As
the District Court explained, being the foreign parent of a
Delaware subsidiary, without more, is insufficient to confer
personal jurisdiction over a nonresident defendant under the
Delaware long-arm statute. Eurofins Pharma, 2009 WL
2992552, at * 4 (citing Monsanto Co. v. Syngenta Seeds, Inc.,
443 F. Supp. 2d 636, 645 (D. Del. 2006)). It follows that
BioAlliance Group’s contractual right to select a board
member—a lesser indicia of control than being the corporate
parent of a Delaware subsidiary—is also insufficient, without
more, to confer personal jurisdiction over BioAlliance Group.
Eurofins Group also avers that the parties intended that
disputes concerning the Transfer Agreement be litigated in
Delaware. To support its contention, Eurofins Group points to an
ancillary contract, Schedule 9 to the Transfer Agreement, which
contains a Delaware forum selection clause. (App. at 123-28.)
This argument, too, is unavailing.
BioAlliance Group is not a party to Schedule 9. (App. at
128.) Additionally, Eurofins Group admits that the parties fought
over a forum selection clause in the Transfer Agreement, but in
the end they agreed to omit such a clause from the contract. As
such, Schedule 9 does not represent the parties’ intent to contest
the issue of the proper forum in which to resolve disputes at a
15
later time.
Thus, even accepting Eurofins Group’s allegations in the
complaint as true, they fail to establish a prima facie case of
personal jurisdiction. Metcalfe, 566 F.3d at 330. There is no
indication that BioAlliance Group committed any act or omission
in Delaware, either in connection with the Transfer Agreement
or the TARA so as to permit jurisdiction to be asserted under
subsections (c)(1) or (c)(3) of the Delaware long-arm statute.
Del. Code. Ann. tit. 10, § 3104 (c)(1) (allowing for personal
jurisdiction over a nonresident who “transacts any business or
performs any character of work in [Delaware]”); id. at (c)(3)
(allowing for personal jurisdiction over a nonresident who
“[c]auses tortious injury in the State by an act or omission in
[Delaware]”); see also TriStrata Tech., Inc. v. Neoteric
Cosmetics, Inc., 961 F. Supp. 686 (D. Del. 1997) (“In order for
a court to exercise jurisdiction under subsections (c)(1) and
(c)(3), some act must actually occur in Delaware.”).
Furthermore, even if Eurofins Group had not waived its argument
based upon subsection (c)(2) by failing to raise it before the
District Court, which it has, Eurofins Group cannot establish that
BioAlliance Group contracted to provide services in Delaware,
since any services BioAlliance Group performed under the
TARA were carried out in France. See Del. Code Ann. tit. 10, §
3104(c)(2) (allowing for personal jurisdiction over a nonresident
who “[c]ontracts to supply services or things in [Delaware].”).
Eurofins Group also appeals the denial of its request for
jurisdictional discovery. We review the District Court’s decision
to deny jurisdictional discovery for abuse of discretion. Toys
“R” Us, 318 F.3d at 455. “If the plaintiff presents factual
16
allegations that suggest ‘with reasonable particularity’ the
possible existence of the requisite ‘contacts between [the party]
and the forum state,’ the plaintiff’s right to conduct jurisdictional
discovery should be sustained.” Id. (modification in original)
(quoting Mellon Bank (E.) PSFS, Nat’l Ass’n v. Farino, 960 F.2d
1217, 1223 (3d Cir. 1992)). A plaintiff may not, however,
undertake a fishing expedition based only upon bare allegations,
under the guise of jurisdictional discovery. Belden Techs., Inc.
v. LS Corp., 626 F. Supp. 2d 448, 459 (D. Del. 2009).
Eurofins Group falls woefully short of making factual
allegations suggesting with “reasonable particularity” the
possible existence of contacts between BioAlliance Group and
Delaware. Eurofins Group argued that the “heavily lawyered”
nature of the Transfer Agreement leads it to conclude that it is
unlikely, if not impossible, that BioAlliance Group did not
participate in the decision to incorporate VI in Delaware. That
reasoning, however, militates against Eurofins Group’s position
because evidence of any such participation would be in Eurofins
Group’s possession and is not dispositive of the issue of whether
jurisdictional discovery is required.
Thus, we affirm the District Court’s denial of Eurofins
Group’s motion for jurisdictional discovery and the District
Court’s dismissal of the complaint against BioAlliance Group for
lack of personal jurisdiction.
B. Personal Jurisdiction Over Avenard
Eurofins Group also appeals the District Court’s dismissal
of its complaint against Avenard for lack of personal jurisdiction.
Specifically, Eurofins Group argues that the District Court erred
in holding that it lacked personal jurisdiction over Avenard under
17
Del. Code Ann. tit. 10, § 3114(b) (2010). We agree.
Section 3114(b) states that any nonresident of Delaware
who accepts election as an officer of a Delaware corporation is
deemed to have consented to service of process in any action in
which that officer is a necessary or proper party, or in any action
against that officer for any violation of his duties as an officer.
“[I]t is the rights, duties, and obligations which have to do with
service as a director of a Delaware corporation which make a
director subject to personal service under the terms of” section
3114(b). Hana Ranch, Inc. v. Lent, 424 A.2d 28, 30 (Del. Ch.
1980); see also Armstrong v. Pomerance, 423 A.2d 174, 176 n.5
(Del. 1980) (Section 3114(b) authorizes the exercise of
jurisdiction “only in actions where directors . . . of a Delaware
corporation are necessary or proper parties or where the cause of
action is grounded on such individuals’ breach of the fiduciary
duties owed to a corporation and its owners.”). Thus, though
Avenard moved to dismiss for lack of personal jurisdiction,
whether the District Court has personal jurisdiction over Avenard
is, pursuant to § 3114(b), actually a question of whether Eurofins
Group has stated a claim against Avenard in his role as a director
of VI upon which relief may be granted.
We review de novo a district court’s decision to dismiss
the complaint for failure to state a claim upon which relief may
be granted. Dique v. New Jersey State Police, 603 F.3d 181, 188
(3d Cir. 2010). “In deciding a motion to dismiss, all well-
pleaded allegations of the complaint must be taken as true and
interpreted in the light most favorable to the plaintiffs, and all
inferences must be drawn in favor of them.” McTernan v. City
of York, 577 F.3d 521, 526 (3d Cir. 2009). To withstand a Rule
12(b)(6) motion to dismiss, “a complaint must contain sufficient
18
factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, --- U.S. ----, 129 S. Ct.
1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)). Eurofins Group alleges that Avenard,
in his role as director of VI, breached his fiduciary duties by
failing to notify VI of ABL’s patent claim. According to
Eurofins Group’s complaint, “Mr. Avenard had knowledge of the
ABL claim at all relevant times, including prior to execution of
the Transfer Agreement.” (App. at 49.) “Moreover, Mr.
Avenard knew that under the Transfer Agreement, Eurofins
Group assumed BioAlliance Group’s obligation to indemnify,
among others, Specialty Labs for any claims of infringement
arising out of the IP.” (App. at 50.) Avenard’s silence therefore
“protected BioAlliance Group’s interest in avoiding its indemnity
obligations to Specialty Labs, knowing all the while that ABL
had asserted such a claim that BioAlliance Group otherwise
would have been required to defend and suffer the disastrous
financial consequences of that obligation.” (App. at 50-51.)
The District Court concluded that the complaint failed to
state a valid claim for breach of fiduciary duty against Avenard.
Eurofins Pharma, 2009 WL 2992552, at *6. Specifically, the
Court found that Eurofins Group failed to allege that Avenard
personally engaged in any transactions that were either harmful
to VI, or beneficial to him. Id. We disagree.
Under Delaware law, a director’s fiduciary duty of loyalty
includes a duty to disclose. Big Lots Stores, Inc. v. Bain Capital
Fund VII, LLC, 922 A.2d 1169, 1184 (Del. Ch. 2006). The duty
to disclose “is not a general duty to disclose everything the
director knows about transactions in which the corporation is
involved.” Id. Rather, it is “[t]he intentional failure or refusal of
19
a director to disclose to the board a defalcation or scheme to
defraud the corporation of which he has learned, [which] itself
constitutes a wrong.” Hoover Indus., Inc. v. Chase, 1988 WL
73758, at *338 (Del. Ch. July 13, 1988) (quoted in Big Lots, 922
A.2d at 1184).
Big Lots cites several examples of cases in which courts
held that a director violated his duty to disclose under Delaware
law. Primary among those cases is Hollinger International v.
Black, 844 A.2d 1022 (Del. Ch. 2004), the “paradigmatic
example” of a director disclosure case, in which the controlling
shareholder and director failed to disclose that he was “shopping”
the company in violation of a signed contract that forbade such
action. Big Lots, 922 A.2d at 1184 (citing Hollinger, 844 A.2d
at 1061). Avenard attempts to distinguish the allegations in
Eurofins Group’s complaint from Hollinger and the other
examples of director disclosure cases cited in Big Lots. Avenard
is correct in distinguishing those cases, as the allegations in those
cases do not mirror those made here. The dissimilarity does not,
however, mandate that the complaint against Avenard be
dismissed.
Instead, we read Big Lots more broadly than does
Avenard. Whereas he argues that Big Lots provides the sum total
of the types of director disclosure claims that will survive a
motion to dismiss, we do not think the Big Lots court intended
the examples of director disclosure claims it provides to be
exhaustive. The complaint alleges that, pursuant to the Transfer
Agreement, Eurofins Group assumed the indemnity obligations
to Specialty Labs formerly assumed by BioAlliance Group.
Additionally, the complaint alleges that at the time the Transfer
Agreement was executed and the transaction closed, Avenard
20
knew that ABL had asserted a claim against the IP licensed by
Eurofins Group to Specialty Labs. Yet, according to the
complaint, Avenard never came forward with that material
information and allowed VI to assume BioAlliance Group’s
obligations and expenses in connection with the IP. “In short,”
as the complaint alleges, “Mr. Avenard favored the interests of
BioAlliance Group and himself over those of VI.” (App. at 51.)
Thus, the complaint states a claim that Avenard breached his duty
of loyalty to VI by failing to inform VI, at the time he became a
director of VI, of ABL’s claim against the IP.
The failure to inform VI was potentially harmful to
Eurofins Group. VI was assured by contract that there were no
known claims that could impact its indemnification
responsibilities, but that was not true. Further, it is conceivable
that Avenard benefitted from his failure to disclose ABL’s claim.
As the complaint alleges, Avenard’s silence could have been
intended to—and, in fact, did—serve BioAlliance Group’s
interest in avoiding its indemnity obligations to Specialty Labs,
because BioAlliance Group knew that ABL had told it
(BioAlliance Group) that Specialty Labs’ use of the IP violated
ABL’s patents. It follows that Avenard, the co-founder and chief
operating officer of BioAlliance, could have derived personal
benefit from shifting the indemnification responsibility from
BioAlliance Group to Eurofins Group. These allegations are
sufficient to survive a motion to dismiss.11
11
Avenard also argues that the complaint against him should
be dismissed under Iqbal because it is implausible. Specifically,
at oral argument, counsel argued that the economics of the deal
make the allegations implausible. What kind of fraud is it,
21
Thus, we vacate the District Court’s dismissal of the
breach of loyalty claim against Avenard on the ground that it
lacked personal jurisdiction over him.
C. Forum Non Conveniens
Finally, Eurofins Group appeals the District Court’s
decision to dismiss the complaint against all parties under the
doctrine of forum non conveniens. We review for abuse of
discretion the District Court’s dismissal of the complaint under
forum non conveniens. Windt v. Qwest Comms. Int’l, Inc., 529
F.3d 183, 189 (3d Cir. 2008). For the reasons set forth below, we
will affirm the District Court’s decision.
Under the doctrine of forum non conveniens, a district
court may, in the exercise of its sound discretion, dismiss the case
where: (1) an alternative forum has jurisdiction to hear the case;
and (2) when trial in the plaintiff’s chosen forum would establish
oppressiveness and vexation to a defendant out of all proportion
to the plaintiff’s convenience, or when the chosen forum is
inappropriate due to the court’s own administrative and legal
problems. Windt, 529 F.3d at 189 (citing Koster v. (Am.)
counsel asked the Court, where you get merely ten dollars up
front and agree to provide technical support at cost for three-
and-a-half years? Counsel’s statement of the contract terms,
however, ignored the indemnification provision. It is hardly
implausible that an individual may seek to benefit his company,
and himself, by offloading the responsibility to indemnify that
company’s licensees onto another company in which he has a
lesser stake.
22
Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947)).
“[W]hen considering a motion to dismiss on forum non
conveniens grounds, a district court must first determine whether
an adequate alternate forum can entertain the case.” Id. at 189-
90. If an adequate alternative forum exists, the district court
must determine next the appropriate amount of deference to be
given the plaintiff’s choice of forum. Id. at 190. After the
district court has determined the amount of deference due to the
plaintiff’s choice of forum, the district court must balance the
relevant public and private interest factors. Id. “If the balance
of these factors indicates that trial in the chosen forum would
result in oppression or vexation to the defendant out of all
proportion to the plaintiff’s convenience, the district court may,
in its discretion, dismiss the case on forum non conveniens
grounds.” Id.
Here, the District Court determined that France provides
an adequate alternate forum for this litigation. It found that each
of the defendants is amenable to service of process in France and
that, in any event, none of the defendants will contest personal
jurisdiction there. Eurofins, 2009 WL 2992552, at *7. Eurofins
Group does not challenge these conclusions. It contends,
however, that France constitutes an inadequate forum on several
grounds. It argues that French practice neither provides for
depositions as a discovery device nor provides a method for
obtaining documents from an objecting adversary or non-party.
Additionally, Eurofins Group argues that, under French law, it
23
could not compel ABL to appear at trial.12
None of these arguments is compelling. Regarding the
availability of discovery, there are adequate discovery methods
available to litigants under French Law. See, e.g., Ernst v. Ernst,
722 F. Supp. 61, 67-68 (S.D.N.Y. 1989) (France is an adequate
forum because “there are several perfectly adequate discovery
methods available under French law, albeit not as extensive as
those available in our courts.”). Concerning the availability of
methods to compel ABL to appear at trial, Eurofins Group
conceded at oral argument that ABL is already a party to ongoing
litigation between these parties in France. (See also Appellees’
Br. 40 (“ABL is a party to the French Action now pending in the
Commercial Court in Paris, and it has not challenged the
jurisdiction of that Court.”).) Therefore, even if Eurofins Group
correctly states the “virtual impossibility” of attaining evidence
from non-parties, this “critical” fact is moot because ABL is a
12
Eurofins Group also argues that France is an inappropriate
forum because BioAlliance Group tried, and failed, to negotiate
for a French forum selection clause in the Transfer Agreement,
and thus could not have reasonably expected to litigate in
France. The failure of the parties to agree on a forum to
entertain disputes, however, simply means that, in the event of
litigation, they would do battle on the issue in court, as the
parties in this case are doing now. To say that an agreement to
leave an issue for another day creates a roadblock to taking up
that issue again is illogical and unfair. The parties’ failure to
select a forum is not an appropriate basis upon which to
conclude that France is an inadequate forum.
24
party to the French litigation.13 The Supreme Court has
counseled that “in rare circumstances, . . . where the remedy
offered by the other forum is clearly unsatisfactory, the other
forum may not be an adequate alternative.” Piper Aircraft Co. v.
Reyno, 454 U.S. 235, 255 n.22 (1981) (emphasis added). Here,
because France is not a “clearly unsatisfactory forum,” it
provides an adequate alternative forum for this litigation.14
After concluding that France was an adequate forum for
the parties’ dispute, the District Court next concluded that the
deference owed to Eurofins Group’s choice of forum was
13
Eurofins Group also argues that France is an inadequate
forum because of French courts’ lack of familiarity with
Delaware law. This is not a ground for finding France an
inadequate forum; rather, it is one of the public interest factors
that we consider below. Cf. Piper Aircraft Co. v. Reyno, 454
U.S. 235, 255, 260 (1981) (discussing familiarity of foreign law
in the context of public interest factors).
14
Where a plaintiff cannot access evidence essential to prove
a claim in an alternative forum, that forum is inadequate. Lacey
v. Cessna Aircraft Co., 932 F.2d 170, 191 (3d Cir. 1991). Thus,
if the communications between ABL and BioAlliance Group
were essential to Eurofins Group’s claims, and if evidence of
those communications was, as Eurofins Group argues,
inaccessible to Eurofins Group in France, then France would be
an inadequate forum for this case. ABL, however, is already a
party to the litigation in France; thus, whether or how evidence
may be procured from non-parties under French procedure is
moot.
25
outweighed by the relevant private and public interest factors.15
The private interest factors that the District Court must consider
include
the relative ease of access to sources of proof; availability
of compulsory process for attendance of unwilling, and
the cost of obtaining attendance of willing, witnesses;
possibility of view of premises, if view would be
appropriate to the action; and all other practical problems
that make trial of a case easy, expeditious and
inexpensive.
Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). The public
interest factors include
15
In its reply brief, Eurofins Group accuses the District Court
of failing to accord any deference to its (Eurofins Group’s)
choice of forum. Since that argument was not raised in Eurofins
Group’s opening brief, it is waived. See Laborers’ Int’l Union
of N. Am., AFL-CIO v. Foster Wheeler Corp., 26 F.3d 375, 398
(3d Cir. 1994) (“An issue is waived unless a party raises it in its
opening brief, and for those purposes a passing reference to an
issue . . . will not suffice to bring that issue before this court.”).
Regardless, we do not agree that the District Court failed to give
Eurofins Group’s choice of forum its due deference. In finding
that “the plaintiffs’ choice of a Delaware forum is far
outweighed by the burdens that a Delaware forum would impose
on these defendants,” Eurofins, 2009 WL 2992552, at *7, the
District Court balanced the relevant factors against the deference
it had accorded Eurofins Group’s chosen forum. Those factors
are discussed below.
26
the administrative difficulties flowing from court
congestion; the “local interest in having localized
controversies decided at home”; the interest in
having the trial of a diversity case in a forum that
is at home with the law that must govern the
action; the avoidance of unnecessary problems in
conflict of laws, or in the application of foreign
law; and the unfairness of burdening citizens in an
unrelated forum with jury duty.
Piper Aircraft, 454 U.S. at 241 n.6 (quoting Gulf Oil, 330 U.S. at
509).
The District Court cited the following facts as tipping the
balance in favor of litigation in France: “(1) the initial offer for
the sale of the IP at issue in this litigation was extended in France
by a French entity; (2) the contract at issue in this action was
finalized and executed in France; (3) all of the sources of proof
are located in France, including documents written in French and
key witnesses; and (4) the third-party at the center of this contract
dispute conducts business in France.” Eurofins, 2009 WL
2992552, at *7.
Regarding the private factors, Eurofins Group argues that,
under French practice, it would have no ability to obtain key
evidence from non-parties to a suit, such as ABL. This argument
repeats one of Eurofins Group’s asserted grounds for finding
France an inadequate forum, and we reject it on the same grounds
as we did in that context. Eurofins Group also points out that not
all witnesses are located in France, since ABL is located in
Luxembourg, one of Eurofins Group’s negotiators is based in
New York, and a former, now defunct, sublicensing agent of
27
ABL used to be based in Massachusetts. The record, however,
reveals that the majority of key witnesses and sources of proof
are, in fact, located in France or the European Union. As such,
even if the District Court statement that “all of the sources of
proof are located in France” overstated the matter, the Court did
not abuse its discretion in deciding that the location of the great
majority of proof and witnesses in France favors dismissal.
Our conclusion that personal jurisdiction exists as to
Avenard but is lacking over BioAlliance Group bolsters the
Court’s conclusion that the private interest factors weigh in favor
of dismissal because, if the claim against Avenard were to be
heard in Delaware, the parties would face the substantial
inconvenience of litigating two actions, which involve a common
nucleus of operative facts, in two fora. Thus, allowing the action
against Avenard to proceed in Delaware would not make trial of
this case “easy, expeditious and inexpensive,” Gulf Oil, 330 U.S.
at 508.
As to the public factors, Eurofins Group contends that the
District Court should have given more weight to the fact that the
contracts underlying the current dispute are governed by
Delaware law. Although the Court should have considered that
fact in its analysis, we see no abuse of discretion in what we take
to be the thrust of the Court’s analysis—that dismissal on forum
non conveniens grounds is appropriate because the litigation is
focused on French defendants’ alleged breaches of contract and
fiduciary duties, which took place in France, and, therefore
France has a more significant interest in resolving the dispute
than Delaware. See Lacey v. Cessna Aircraft Co., 862 F.2d 38,
48 (3d Cir. 1988) (“In evaluating the public interest factors the
district court must ‘consider the locus of the alleged culpable
28
conduct, often a disputed issue, and the connection of that
conduct to plaintiff’s chosen forum.’” (quoting Van
Cauwenberghe v. Biard, 486 U.S. 517, 528 (1988)).
The mere fact that certain documents are written in
English is insufficient to change that conclusion. Further, though
Delaware has “a significant interest in actively overseeing the
conduct of those owing fiduciary duties to the shareholders of
Delaware corporations,” Armstrong v. Pomerance, 423 A.2d 174,
177 (Del. 1980), that interest is also insufficient to outweigh the
locus of the alleged culpable conduct in this case. Additionally,
litigation in France will avoid the possibility of incongruous
results stemming from parallel actions involving Eurofins
Group’s claims. The Commercial Court is already endeavoring
to resolve this dispute, and will continue its efforts independent
of our decision.16
16
At oral argument, Eurofins Group argued that the District
Court abused its discretion by dismissing the action on the
ground of forum non conveniens because litigation in France
will require a judge schooled in civil law to adjudicate a dispute
governed by common law. As this Court observed, that
argument would militate against considering France as an
appropriate forum in cases originating from our common law
system.
While the public interest factors include “the avoidance
of unnecessary problems . . . in the application of foreign law,”
Windt, 529 F.3d at 189, there is no support for the proposition
that this factor is so overwhelming that it tips the scales in favor
of hearing the case against Avenard in Delaware. Eurofins
Group’s argument “ignores the Supreme Court’s demonstrated
29
Both the private and public interest factors weigh in favor
of litigating this dispute in France. Therefore, the District Court
did not abuse its discretion by granting BioAlliance Group’s
motion to dismiss on forum non conveniens grounds.
IV. CONCLUSION
For the reasons explained above, we affirm the District
Court’s decision that it does not have personal jurisdiction over
BioAlliance Group, we affirm the District Court’s denial of
Eurofins Group’s motion for jurisdictional discovery, we vacate
the District Court’s decision that it does not have personal
jurisdiction over Avenard, and we affirm the District Court’s
dismissal of the complaint on the ground of forum non
conveniens.
willingness to dismiss a case on forum non conveniens grounds
even where the alternative forum will be faced with questions of
American law.” ACLI Int’l Commodity Servs., Inc. v. Banque
Populaire Suisse, 652 F. Supp. 1289, 1296 (S.D.N.Y. 1987)
(citing Piper Aircraft, 454 U.S. at 260).
30