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Purdue Pharma L.P. v. State

Supreme Court of Mississippi

October 18, 2018

PURDUE PHARMA L.P., PURDUE PHARMA, INC., THE PURDUE FREDERICK COMPANY, INC., TEVA PHARMACEUTICALS, USA, INC., CEPHALON, INC., JOHNSON & JOHNSON, JANSSEN PHARMACEUTICALS, INC., ORTHO-McNEIL-JANSSEN PHARMACEUTICALS, INC. n/k/a JANSSEN PHARMACEUTICALS, INC., JANSSEN PHARMACEUTICA, INC., n/k/a JANSSEN PHARMACEUTICALS, INC., ENDO HEALTH SOLUTIONS INC., ENDO PHARMACEUTICALS, INC., WATSON LABORATORIES, INC. n/k/a ACTAVIS LABORATORIES UT, INC., ACTAVIS LLC AND ACTAVIS PHARMA, INC. f/k/a WATSON PHARMA, INC.
v.
STATE OF MISSISSIPPI

          DATE OF JUDGMENT: 02/13/2017

          HINDS COUNTY CHANCERY COURT HON. DENISE OWENS

          TRIAL COURT ATTORNEYS: GEORGE W. NEVILLE JACQUELINE H. RAY JENNIFER F. CONNOLLY JOE N. TATUM JOHN LEE DAVIDSON STEPHEN L. THOMAS CHRISTOPHER A. SHAPLEY JOSEPH ANTHONY SCLAFANI STEVEN A. REED CHAD ROBERTS HUTCHINSON DAVID F. MARON JAMES WILLIAM MATTHEWS STEPHANIE M. RIPPEE STEVE W. BERMAN R. DAVID KAUFMAN BRIAN M. ERCOLE J. GORDON COONEY, JR. TINOS DIAMANTATOS ALAN W. PERRY SIMON TURNER BAILEY CAROLYN J. KUBOTA CHAD ROBERTS HUTCHINSON CHARLES C. LIFLAND IVANA CINGEL J. CARTER THOMPSON, JR. JOSHUA M. DAVIS SAMUEL DEUCALION GREGORY JASON LIRAN DRORI KATY ELLEN KOSKI PAUL STEPHENSON PATRICK J. FITZGERALD

          ATTORNEYS FOR APPELLANTS: JOSEPH ANTHONY SCLAFANI R. DAVID KAUFMAN CHRISTOPHER A. SHAPLEY SHEILA BIRNBAUM MARK S. CHEFFO HAYDEN A. COLEMAN STEPHEN L. THOMAS ALAN W. PERRY SIMON TURNER BAILEY JOSHUA M. DAVIS BRIAN M. ERCOLE J. GORDON COONEY, JR. TINOS DIAMANTATOS STEVEN A. REED CHAD ROBERTS HUTCHINSON CHRISTY D. JONES ADAM JULIUS SPICER CHARLES C. LIFLAND IVANA CINGAL CAROLYN J. KUBOTA J. CARTER THOMPSON, JR. DAVID F. MARON SAMUEL DEUCALION GREGORY

          ATTORNEYS FOR APPELLEE: OFFICE OF THE ATTORNEY GENERAL GEORGE W. NEVILLE JACQUELINE H. RAY GORDON GARLAND LYELL, III GEOFFREY C. MORGAN SAMUEL MARTIN MILLETTE JOHN LEE DAVIDSON JOE N. TATUM STEVE W. BERMAN JENNIFER F. CONNOLLY JAMES L. WARD, JR. ROBERT S. WOOD

          BEFORE KITCHENS, P.J., KING AND BEAM, JJ.

          KING, JUSTICE.

         ¶1. In this interlocutory appeal, the Court must determine whether the location of a foreign corporation's registered agent is relevant when determining the appropriate venue for an action. We find that the adoption of the Registered Agents Act ("RAA") made the location of a corporation's registered agent irrelevant for purposes of venue.

         FACTS AND PROCEDURAL HISTORY

         ¶2. On December 15, 2015, the State of Mississippi filed a complaint in the Hinds County Chancery Court against fifteen pharmaceutical manufacturers and their affiliates ("Defendants"). According to the complaint, opioids originally were designed to treat "short- term post-surgical and trauma-related pain, and for palliative (end-of-life) care." However, in an effort to increase profits, the State alleged that Defendants employed a wide variety of deceptive and misleading practices designed to enter and conquer the chronic-pain market. The State alleged that Defendants, despite knowledge of the addictive nature of opioids, engaged in a marketing campaign "to create a profound transformation in medical and public perception that would permit the use of opioids not only for acute and palliative care, but also for long periods of time to treat more common aches and pains, like lower back pain, arthritis, and headaches."

         ¶3. As a result, opioids moved from a niche category of drugs to the most prescribed class of drugs in America. The State averred that, in an opioid study, two-thirds of patients who consumed opioids for more than ninety days still were taking opioids approximately five years later. [1] The State also alleged that in 2012, prescription opioid use contributed to 16, 007 deaths nationally. Specific to Mississippi, in 2012, ninety percent of drug-overdose deaths were caused by prescription drugs; most of the deaths were accidental. The complaint stated,

Defendants' deceptive marketing campaign deprived Mississippi patients and their doctors of the ability to make informed medical decisions and, instead, caused important, sometimes life-or-death decisions to be made based not on science, but on hype. Defendants deprived patients, their doctors, and health care payers of the chance to exercise informed judgment and subjected them to enormous costs and suffering.

         ¶4. The State alleged four common-law claims (fraud, negligent misrepresentation, unjust enrichment, and public nuisance), and a claim pursuant to the Mississippi Consumer Protection Act ("MCPA"), Mississippi Code Section 75-24-9. The complaint stated that the Hinds County Chancery Court "has subject matter jurisdiction over this action pursuant to MISS. CODE ANN. § 75-24-9, because the State brings this action, in part, to restrain by permanent injunction the use of a method, act, or practice prohibited by MISS. CODE ANN. § 75-24-5." In addition, the complaint stated that venue was proper pursuant to Mississippi Code Sections 11-11-3, 11-5-1, 75-24-9, and 9-5-81; and Article 6, Section 159, of the Mississippi Constitution. [2]

         ¶5. The parties do not dispute that each defendant's principal place of business was located outside the State of Mississippi. On March 3, 2016, Defendants filed a joint motion to transfer for improper venue and to dismiss the complaint for failure to state a claim. Defendants moved the trial court to transfer the action from the Hinds County Chancery Court to the Rankin County Chancery Court pursuant to Mississippi Rules of Civil Procedure 12(b)(3) and 82(d).[3] Attached to the motion was the affidavit of Stephanie M. Rippee, attorney of record for Defendants. Although each of Defendants' principal places of business were located outside the State of Mississippi, Rippee stated that, according to the Mississippi Secretary of State's website, Actavis Pharma had appointed as its registered agent in Mississippi CT Corporation System, which was located at 645 Lakeland East Drive, Suite 101, Flowood, Rankin County. In addition, Cephalon, Inc., had appointed as its registered agent Corporate Creations Network, Inc., located at 232 Market Street, Flowood, Rankin County. [4]

         ¶6. The State argued in opposition that the Mississippi Legislature passed the RAA to eliminate the relevance of registered agents to the question of venue. The trial court agreed, finding that the passage of the RAA made the location of a foreign corporation's registered agent irrelevant to venue analysis. Accordingly, the trial court held that, because Mississippi's general chancery-court venue statute, Mississippi Code Section 11-5-1, stated that all cases not specifically provided for may be brought in the county in which the defendant may reside or be found, and because no defendant resided or could be found in Mississippi, Section 11-5-1 also was inapplicable to the action.

         ¶7. The trial court continued that Mississippi's general venue statute, Mississippi Code Section 11-11-3, was the only state venue statute that identified criteria other than the location of a registered agent. Pursuant to Section 11-11-3, "a civil action against a nonresident may be commenced in the county where the plaintiff resides or is domiciled." Miss. Code Ann. § 11-11-3 (Rev. 2004). Because the State's Medicaid agency is located in Hinds County along with most state agencies, the trial court found venue to be proper in Hinds County.

         ¶8. Defendants now appeal and argue that the trial court erred in finding that Hinds County was the appropriate venue for this action.

         ANALYSIS

         ¶9. Defendants argue that the trial court erred in denying the motion to transfer venue from Hinds County. "The decision to grant or deny a motion for a change of venue lies within the discretion of the trial court and will not be disturbed unless the trial court abuses its discretion." Penn Nat'l Gaming, Inc. v. Ratliff, 954 So.2d 427, 433 (Miss. 2007). "Of right, the plaintiff selects among the permissible venues, and his choice must be sustained unless in the end there is no credible evidence supporting the factual basis for the claim of venue." Holmes v. McMillan, 21 So.3d 614, 616 (Miss. 2009) (quotations omitted). "[T]he plaintiff selects among the permissible venues, and his choice must be sustained unless in the end there is no credible evidence supporting the factual basis for the claim of venue." Wilkerson v. Goss, 113 So.3d 544, 548 (Miss. 2013) (quoting Hedgepeth v. Johnson, 975 So.2d 235, 238 (Miss. 2008).

         A. Mississippi Consumer Protection Act

         ¶10. Defendants first argue that venue is improper in Hinds County pursuant to the venue statute of the Mississippi Consumer Protection Act ("MCPA"). The MCPA mandates that actions "shall be brought in the chancery or county court of the county in which such person resides or has his principal place of business, or, with consent of the parties, may be brought in the chancery or county court of the county in which the State Capitol is located." Miss. Code Ann. § 75-24-9 (Rev. 2016). Defendants contend that because no defendant resides or has its principal place of business in Hinds County and because no defendant consented to venue in Hinds County, venue in Hinds County is not proper.

         ¶11. This Court previously has held that, in cases involving a foreign corporation with its principal place of business outside the state, "the only place where it can be said to reside in this state is where an agent for service of process may be found." Ratliff, 954 So.2d at 434. However, subsequent to the Ratliff decision, the Legislature passed the RAA. The RAA provides that

The appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state. The address of the agent does not determine venue in an action or proceeding involving the entity.

         Miss. Code Ann. § 79-35-15 (Rev. 2013).

         ¶12. Defendants argue that the statute's language does not wholly bar consideration of a registered agent's location for venue purposes. Instead, Defendants contend that the location of a registered agent does not, by itself, ultimately determine venue but is still relevant in the venue analysis. Therefore, because each Defendant's principal place of business is outside the state, the location of two Defendants' registered agents is the closest available proxy for residence. Because two Defendants maintain registered agents in Rankin County, Defendants argue that Rankin County is the proper location for the instant action. Defendants also argue that the trial court's interpretation of the RAA incorrectly overruled longstanding precedent holding that foreign corporations are subject to venue where their registered agents are located.

         ¶13. We find that the trial court correctly determined that the RAA effectively made the location of a corporation's registered agent irrelevant to the venue analysis. The plain language of the statute clearly states that "the address of the agent does not determine venue in an action or proceeding involving the entity." Miss. Code Ann. § 79-35-15. As the State argues, the only ground supporting the transfer to Rankin County is that two Defendants had registered agents located in Rankin County. We disagree with the dissent's contention that the language contained in Section 75-24-9 regarding the "consent of the parties" bars this action from being brought in Hinds County. It is clear that the consent language contained in the statute applies only to Mississippi defendants. Section 75-24-9 provides that "the action shall be brought in the chancery or county court of the county in which such person resides or has his principal place of business, or, with consent of the parties, may be brought in the chancery or county court of the county in which the State Capitol is located." Miss. Code Ann. § 75-24-9 (Rev. 2016) (emphasis added). Thus, because no person resides or has a principal place of business in Mississippi in this case, the consent language contained in the statute also does not apply and the statute as a whole fails to provide a venue option for foreign corporations.

         ¶14. Because the RAA excluded consideration of the location of a corporation's registered agent from the question of venue, the MCPA's venue statute provides no choice of venue for foreign corporations. Thus, this Court must look to the general venue statute for chancery court actions.

         B.Chancery-Court Venue ...


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