Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 1 of 24 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF IOWA CENTRAL DIVISION

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1 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 1 of 24 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF IOWA CENTRAL DIVISION DEBRA PRESCOTT, in Her Own Right and as Executor of the Estate of RONALD STANLEY PRESCOTT, v. Plaintiff, LIVANOVA PLC, SORIN GROUP DEUTSCHLAND GMBH, and SORIN GROUP USA, INC., No: 4:16-cv JAJ-SBJ BRIEF IN SUPPORT OF LIVANOVA PLC S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION PURSUANT TO FED. R. CIV. P. 12(b)(6) Defendants.

2 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 2 of 24 TABLE OF CONTENTS I. INTRODUCTION...1 II. STATEMENT OF MATERIAL JURISDICTIONAL FACTS...4 A. Jurisdictional Allegations of the Complaint...4 B. LivaNova PLC...5 C. Sorin Group USA...6 D. Sorin Group Deutschland...7 III. LEGAL ARGUMENT...8 A. Legal Standard for Rule 12(b)(2) Motion to Dismiss...9 B. LivaNova PLC Is Not Subject to Personal Jurisdiction in Iowa LivaNova PLC is not subject to general jurisdiction in Iowa LivaNova PLC is not subject to specific personal jurisdiction in Iowa LivaNova PLC does not have the alter ego relationship with either Sorin Group USA or Sorin Group Deutschland necessary to impute their contacts to LivaNova PLC IV. CONCLUSION...20

3 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 3 of 24 I. INTRODUCTION LivaNova PLC, a foreign company headquartered in London, United Kingdom, is not subject to personal jurisdiction in this District. Plaintiff offers no evidence to the contrary, alleging only: Personal jurisdiction exists over [LivaNova PLC] in the U.S. due to the general and specific contacts [it] maintain[s] in the U.S. (Dkt. No. 1, Compl. 2.) Indeed, just last month, Judge Jones of the United States District Court for the Middle District of Pennsylvania rejected the exact same claim based on the identical bare allegation. (Exhibit A, Baker et al. v. LivaNova PLC, No. 1:16-cv No. 45, 5 (Sept. 29, 2016) (Slip opinion)). As set forth in that opinion, the court dismissed all claims against LivaNova PLC for lack of personal jurisdiction. The result here should be no different. As in this case, the Baker plaintiffs claims arose out of allegations that the 3T Heater-Cooler System ( 3T System ) caused the spread of nontuberculous mycobacterium (NTM) in operating rooms. Id. at *1.1 They alleged in identical terms as Plaintiff in this case that personal jurisdiction existed over LivaNova PLC due to its contacts with Pennsylvania and its status as alter ego of its subsidiary Sorin entities. LivaNova PLC filed a motion to dismiss the plaintiffs complaint for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2). In response, plaintiffs argued that (1) LivaNova PLC s contacts with Pennsylvania are sufficient to provide specific personal jurisdiction over it; (2) Sorin Group Deutschland s and Sorin Group USA s contacts with Pennsylvania are imputed to LivaNova PLC under an alter ego theory and those contacts provide a basis for personal jurisdiction; and (3) World-Wide Volkswagen Corp. v. Woodson provides a means for personal jurisdiction over LivaNova PLC. Id. at *8. 1 Although the Baker plaintiffs do not allege physical injury, and only assert claims for medical monitoring, that distinction does not affect the jurisdictional analysis in this case. 1

4 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 4 of 24 The Baker court granted LivaNova PLC s motion to dismiss, ruling that (1) the evidence submitted in an attempt to establish personal jurisdiction over LivaNova PLC based on its contacts with Pennsylvania fell extremely short of the minimum contacts required for due process (id. at *11); (2) it is clear that LivaNova PLC is not the alter-ego of Sorin [Group Deutschland] or Sorin [Group] USA (id. at *13); and (3) plaintiffs did not provide any evidence to illustrate that LivaNova PLC is akin to a distributor who has targeted the Pennsylvania market as required under World-Wide Volkswagen (id. at *15-16). In particular, the court rejected plaintiffs jurisdictional allegations wholesale, holding LivaNova PLC is simply a holding company for Sorin [Group Deutschland] and Sorin [Group] USA, and had no role in the marketing or sale of the 3T Systems and there is no alter ego relationship because LivaNova PLC does not control or otherwise contribute to the manufacturing, marketing, or selling functions of Sorin [Group Deutschland] or Sorin [Group] USA. Id. at *11, *15. Although it is the most recent opinion on this issue, the Baker order was not the first time a Federal Court has addressed and decided the issue of personal jurisdiction over the foreign parent company to Sorin Group USA in WARAD West, LLC v. Sorin CRM USA, Inc., the District of Colorado also dismissed all claims against Sorin S.p.A., the predecessor entity to LivaNova PLC, for lack of personal jurisdiction. 119 F. Supp. 3d 1294 (D. Colo. 2015). As in Baker, the court found that the holding company Sorin S.p.A. did not have either direct jurisdictional contacts with Colorado or the alter ego relationship with its Colorado-based subsidiaries (including Sorin Group USA, Inc.) necessary to impute their contacts to Sorin S.p.A. and subject Sorin S.p.A. to jurisdiction in Colorado. Id. These rulings conclusively demonstrate a lack of direct or imputed minimum contacts between LivaNova PLC and the United States, and the analysis here is no different. 2

5 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 5 of 24 In further support of its Motion, LivaNova PLC relies on the Declaration of Taylor Pollock ( Pollock Declaration ) (attached as Exhibit B), which should leave no question that the claims against LivaNova PLC should be dismissed for lack of personal jurisdiction. As the Pollock Declaration establishes, LivaNova PLC is an English company headquartered in the United Kingdom which does not purposefully avail itself of the laws of Iowa. The Complaint does not contain sufficient allegations to rebut this. In fact, Plaintiff does not properly allege a single actual contact that LivaNova PLC has ever had with the State of Iowa. Some contact with the forum state is an absolute requirement to exercise personal jurisdiction over a foreign entity in Iowa, and the absence of such contacts speaks volumes. In addition to lacking any basis for a jurisdictional theory related to LivaNova PLC s own activities, Plaintiff also cannot impute the jurisdictional contacts of Sorin Group Deutschland GMBH and Sorin Group USA, Inc. to LivaNova PLC under an alter ego theory. LivaNova PLC does not dispute that for purposes of this case, these wholly-owned subsidiaries (the registered manufacturer and the U.S. marketer and seller of the 3T System), are subject to personal jurisdiction in Iowa. However, [i]t is well-settled that a parent corporation is not doing business in a state merely by the presence of its wholly owned subsidiary. Schultz v. Portfolio Recovery Assocs., LLC, No. 12-CV-2022-LRR, 2012 WL , at *4 (N.D. Iowa Oct. 29, 2012) (quoting Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 648 (8th Cir. 2003)). Rather, in this District, to prove alter ego, a plaintiff must show the parent so controlled and dominated the affairs of the subsidiary that the latter's corporate existence was disregarded so as to cause the residential corporation to act as the nonresidential corporate defendant's alter ego. Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 596 (8th Cir. 2011) (emphasis added). Such proof must demonstrate that the parent dictates every facet of the 3

6 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 6 of 24 subsidiary s business from broad policy decisions to routine matters of day-to-day operation, rendering the subsidiary a mere instrumentality or adjunct of another corporation. Schultz, 2012 WL , at *4 (quoting Velez v. Portfolio Recovery Assocs., Inc., 881 F. Supp. 2d 1075, 1083 (E.D. Mo. 2012); Epps, 327 F.3d at 649). Plaintiff s Complaint provides no facts from which to infer the necessary dominance to demonstrate the alter ego relationship necessary to impute the Sorin companies jurisdictional contacts to LivaNova PLC. In direct contrast to Plaintiff s bare allegations, LivaNova PLC supports its argument with the Pollock Declaration, which clearly and conclusively demonstrates a lack of such level of control. Accordingly, Plaintiff s Complaint against LivaNova PLC must be dismissed for lack of personal jurisdiction. II. STATEMENT OF MATERIAL JURISDICTIONAL FACTS A. Jurisdictional Allegations of the Complaint In the Complaint, Plaintiff alleges that Ronald Prescott underwent heart valve replacement surgery on October 2, (See Compl. 39.) Plaintiff further alleges that Mr. Prescott sustained an infection of non-tuberculosis Mycobacterium ( NTM ), which was diagnosed in September (See Compl. 42.) Plaintiff asserts claims against LivaNova PLC that purportedly arise out of the manufacture, design, and warnings/instructions of the subject medical device. (See Compl ) In the Complaint, Plaintiff does not explicitly state a basis for an allegation that personal jurisdiction exists over LivaNova PLC. Plaintiff does, however, allege that LivaNova PLC LivaNova... advised purchasers in the United States it is the responsible party for the Sorin 3T Heater-Cooler System at issue herein and exclusively communicated with the Food and Drug Administration ( FDA ) and other interested parties with respect to safety concerns about the 3T System. (See Compl. 5.) In support of these allegations, Plaintiff attaches a December 29, 4

7 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 7 of letter from the FDA to André-Michel Ballester, CEO of LivaNova PLC ( Exhibit A ), a January 5, 2016 press release on the LivaNova website ( Exhibit B ) and a January 2016 customer letter from Sean McNerney, Vice President of U.S. Sales & Marketing for Sorin Group USA, Inc. ( Exhibit C ). These are the entirety of the jurisdictional allegations in the Complaint. B. LivaNova PLC LivaNova PLC is a public limited company incorporated under the laws of England and Wales and is headquartered in London, United Kingdom. 2 (Pollock Decl. 5.) LivaNova PLC was formed in February 2015, for the purpose of facilitating the business combination of Cyberonics, Inc., a Delaware corporation, and Sorin S.p.A., a joint stock company organized under the laws of Italy. (Id. 6.) In October 2015, LivaNova PLC became the holding company of the combined businesses of Cyberonics, Inc. and Sorin S.p.A. in the fields of Cardiac Surgery, Neuromodulation, and Cardiac Rhythm Management. (Id.) Until October 2015, Sorin S.p.A. was an Italian public limited company headquartered in Italy. (Id. 7.) Similar to LivaNova PLC, Sorin S.p.A. was a holding company in the field of medical technologies for the treatment of cardiovascular and other diseases. (Id.) Sorin S.p.A. had never been registered as a foreign entity to transact business in Iowa or anywhere else in the United States. (Id.) Sorin S.p.A. never maintained any offices, had any registered agents or employees, paid any taxes, or rented or owned any real or personal property in Iowa. (Id.) Sorin S.p.A. had never manufactured, promoted, marketed, advertised, developed, designed, or sold 2 As set forth in LivaNova PLC s Corporate Disclosure Statement, LivaNova PLC is publicly traded on the London and NASDAQ stock exchanges. (Id. 5.) 5

8 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 8 of 24 any products, including the 3T System at issue in this case, in Iowa or anywhere else in the United States. 3 (Id.) LivaNova PLC, like its predecessor Sorin S.p.A., is not now and has never been authorized to transact business in Iowa or anywhere else in the United States. (Id. 8.) LivaNova PLC is not registered as a foreign entity to transact business in Iowa or anywhere else in the United States. (Id.) LivaNova PLC does not maintain any offices, have any registered agents or employees, pay any taxes, or rent or own any real or personal property in Iowa. (Id.) LivaNova PLC has never manufactured, promoted, marketed, advertised, developed, designed, or sold any products, including the 3T System at issue in this case, in Iowa, or anywhere else in the United States. (Id.) C. Sorin Group USA Defendant Sorin Group USA, Inc. ( Sorin Group USA ) is a Delaware corporation with a principal place of business in Arvada, Colorado. (Pollock Decl. 1.) Sorin Group USA is a wholly-owned subsidiary of LivaNova PLC. (Id. 15.) Unlike LivaNova PLC, Sorin Group USA is engaged in the business of the marketing and sale of heart valves and cardiopulmonary products, including the 3T System, throughout the United States, including in Iowa. (Id. 10.) Sorin Group USA communicates directly with customers throughout the United States, including Iowa. (Id.) Sorin Group USA s management team, which is led by Sean McNerney, has responsibility for budgeting, sales forecasting, expense forecasting, and hiring and retaining sales 3 Sorin S.p.A., the predecessor entity to LivaNova PLC, was the party that the U.S. District Court for the District of Colorado found did not have either direct jurisdictional contacts with Colorado or the alter ego relationship with its Colorado-based subsidiaries necessary to impute their contacts to Sorin S.p.A. and subject Sorin S.p.A. to jurisdiction in Colorado. See WARAD West, LLC v. Sorin CRM USA, Inc., 119 F. Supp. 3d 1294 (D. Colo. 2015). Since that time, the Baker court made the same findings with respect to LivaNova PLC. 6

9 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 9 of 24 and management. (Id. 15.) At present, Sorin Group USA directly employs over 360 sales, service, management, manufacturing, and administrative employees throughout the United States. (Id. 16.) These employees are paid by Sorin Group USA and not by any other entity, and the management and sales employees devote their responsibilities solely to Sorin Group USA. (Id.) In managing the company s day-to-day business operations, the Sorin Group USA management team maintains control over which hospitals and physicians it sells to and conducts business with, subject to regulatory requirements. (Id. 18.) Sorin Group USA is solely responsible for all aspects of its sales operations, including setting prices, devising and executing promotional strategies, seeking credentialing from hospitals and other purchasing groups, and contracting with and invoicing customers. (Id.) The legal status of Sorin Group USA was unaffected by the October 2015 transaction wherein LivaNova PLC became the holding company of the combined business of Cyberonics, Inc. and Sorin, S.p.A. (Id. 11.) D. Sorin Group Deutschland Sorin Group Deutschland GmbH ( Sorin Group Deutschland ) is a German company headquartered in Munich and a wholly-owned subsidiary of LivaNova PLC. (Id. 8.) Sorin Group Deutschland manufactures heart-lung machines for extracorporeal circulation and autotransfusion systems. (Id.) It also distributes products in Germany and markets its own products to distributors in the Intercontinental area (which does not include Iowa or any other location within in the United States). (Id.) Sorin Group Deutschland is the 510(k) Applicant and registered manufacturer of the 3T System, which was sold by Sorin Group USA to hospitals in Iowa. (Id.) LivaNova PLC does not share officers, directors, managerial employees, or executives with Sorin Group Deutschland, and it does not participate in or instruct the day-to-day 7

10 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 10 of 24 marketing, sales, or business operations of Sorin Group Deutschland. (Id. 13.) It does not maintain business records, financial records, profits and losses statements, or tax returns for Sorin Group Deutschland. (Id. 14.) Nor does it direct, manage, or facilitate product sales, marketing, or distribution networks for Sorin Group Deutschland. (Id. 13.) As with Sorin Group USA, the legal status and business operations of Sorin Group Deutschland were unaffected by the October 2015 transaction wherein LivaNova became the holding company of the combined business of Cyberonics, Inc. and Sorin, S.p.A. (Id. 9.) III. LEGAL ARGUMENT Plaintiff s allegation that [p]ersonal jurisdiction exists over [LivaNova PLC] in the U.S. due to the general and specific contacts [it] maintain[s] in the U.S is contrary to the facts and legally insufficient for this Court to exercise either general or specific personal jurisdiction over LivaNova PLC. (See Compl. 2.) LivaNova PLC is admittedly an English company headquartered in the United Kingdom, but Plaintiff s Complaint does not contain sufficient allegations to demonstrate that LivaNova PLC actually has any direct or imputed contacts with Iowa. This is an absolute Constitutional requirement to exercise personal jurisdiction over a foreign entity in Iowa. As Judge Jones held just last month in a case involving the same named Defendants and the same lead counsel as this case, the bare evidence cited by Plaintiffs in that case fell extremely short of the minimum contacts required for due process. 4 (Exhibit A, Baker, No. 1:16-cv No. 45 at *11 (emphasis added).) Further, any assertion that alter-ego status applies to LivaNova PLC must fail as there is no evidence that LivaNova controls either Sorin Group Deutschland or Sorin Group USA to the 4 As here, the plaintiffs in Baker cited the December 29, 2015 letter from the FDA (Plaintiff s Exhibit A to the Complaint), as well as statements on the LivaNova website and other communications regarding issues with the 3T System appear on LivaNova letterhead, similar to Plaintiff s Exhibits B and C. Baker, No. 1:16-cv No. 45 at *4-5. 8

11 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 11 of 24 extent that they are a mere instrumentality or adjunct of another corporation as required to establish alter ego. Schultz, 2012 WL , at *4 (quoting Velez, 881 F. Supp. 2d at 1083; Epps, 327 F.3d at 649). To the contrary, the Pollock Declaration shows LivaNova PLC does not exercise actual control over [ the Sorin defendants ] beyond that which is characteristic of a usual parent-subsidiary relationship. Schultz, 2012 WL , at *4; Epps, 327 F.3d at 649. The only evidence Plaintiff may offer in support of an alter ego theory LivaNova PLC s ownership of its subsidiaries stock and the common use of the LivaNova brand is insufficient. In Baker, the court acknowledged that LivaNova PLC owns all the stock of Sorin [Group Deutschland] and Sorin [Group] USA, and that all three companies operate under the united image of LivaNova, but ultimately held this evidence alone is insufficient to establish alter-ego jurisdiction. Baker, No. 1:16-cv No. 45 at *11. This Court should dismiss Plaintiff s Complaint against LivaNova in this case for the same reasons. A. Legal Standard for Rule 12(b)(2) Motion to Dismiss To allege personal jurisdiction, a plaintiff must state sufficient facts in the complaint to support a reasonable inference that the defendant [ ] can be subjected to jurisdiction within the state. Wells Dairy, Inc. v. Food Movers Int'l, Inc., 607 F.3d 515, 518 (8th Cir. 2010) (quoting Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004)), cert. denied, 543 U.S (2010). If the defendant controverts or denies jurisdiction, the plaintiff bears the burden of proving facts supporting personal jurisdiction. Id. And although a plaintiff s showing must be tested, not by the pleadings alone, but by the Declarations and exhibits, id., the burden does not shift to the party challenging jurisdiction, Epps, 327 F.3d at 647 (quoting Gould v. P.T. Krakatau Steel, 957 F.2d 573, 575 (8th Cir. 1992)). Because LivaNova PLC s evidence has tested Plaintiff s bare allegations in support of its jurisdictional allegations, Plaintiff cannot establish a prima facie case of personal jurisdiction over LivaNova PLC. 9

12 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 12 of 24 B. LivaNova PLC Is Not Subject to Personal Jurisdiction in Iowa. In a diversity case such as this, the Court may assert jurisdiction over a nonresident defendant only to the extent allowed by the forum state's long-arm statute and the Due Process Clause of the United States Constitution. Bowman v. Dometic Corp., No. 415 CV SMRHCA, 2015 WL , at *4 (S.D. Iowa Dec. 22, 2015). Due process requires a defendant to have sufficient minimum contacts with the forum state, such that summoning the defendant to the forum state would not offend traditional notions of fair play and substantial justice. Id. (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). The determination of minimum contacts focuses on the quality and nature of a defendant s contacts with the forum state. Int l Shoe Co., 326 U.S. at 319. The Supreme Court has set forth two theories for evaluating minimum contacts, general jurisdiction and specific jurisdiction. Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004). As the analysis below demonstrates, neither method of establishing personal jurisdiction applies here. 1. LivaNova PLC is not subject to general jurisdiction in Iowa General personal jurisdiction is all-purpose jurisdiction and grants a court the power to hear any and all claims against a party regardless of where an event at issue took place. See Goodyear Dunlop Tires Ops., S. A. v. Brown, 131 S.Ct. 2846, 2851 (2011). In fact, general jurisdiction requires affiliations so continuous and systematic as to render [the foreign corporation] essentially at home in the forum state, i.e., comparable to a domestic enterprise in that state. Daimler AG v. Bauman, 187 L. Ed. 2d 624, 637 n.11 (2014) (emphasis added) (quoting Goodyear Dunlop Tires, 131 S. Ct. at 2851). At home general jurisdiction is, outside of exceptional circumstances, only available in the forum where the defendant corporation is incorporated and where it has its principal place of business the two paradigm bases for general jurisdiction. Daimler, 134 S. Ct. at 760; see also Goodyear, 131 S.Ct. at ,

13 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 13 of 24 ( A corporation s continuous activity of some sorts within a state... is not enough to support the demand that the corporation be amenable to suits unrelated to that activity. ). Plaintiff s allegations come nowhere close to demonstrating these more stringent contacts necessary for general personal jurisdiction. Instead, the evidence establishes that LivaNova PLC does not engage in any business of any kind in Iowa, let alone the kind of continuous and systematic business necessary for a finding of general jurisdiction. See Pollock Decl. 5-8; see also Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984). LivaNova PLC is not now and has never been registered as a foreign entity to transact business in Iowa or anywhere else in the United States and does not maintain any offices, have any registered agents or employees, pay any taxes, or rent or own any real or personal property in Iowa. (Pollock Decl. 8.) Because LivaNova PLC is a foreign entity headquartered in London, it is at home for purposes of general jurisdiction in the United Kingdom, and certainly not in Iowa. 2. LivaNova PLC is not subject to specific personal jurisdiction in Iowa For specific jurisdiction to attach, a defendant s contacts with the forum must be sufficient minimum contacts that must also give rise to the liabilities sued on. Daimler, 134 S.Ct. at 754 (quoting Int l Shoe Co., 326 U.S. at 317). In other words, the essential foundation of in personum jurisdiction is a relationship among the defendant, the forum, and the litigation, Helicopteros, 466 U.S. at 414, and for specific personal jurisdiction to exist, the contacts between the defendant and the forum state must be sufficient to establish that the defendant has purposefully availed himself of the benefits and protections of the forum state. Johnson v. Woodcock, 444 F.3d 953, 955 (8th Cir. 2006) (citing Porter v. Berall, 293 F.3d 1073, 1075 (8th Cir. 2002)). The purposeful availment requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts or of 11

14 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 14 of 24 the unilateral activity of another party of a third person. Stanton v. St. Jude Med., Inc., 340 F.3d 690, (8th Cir. 2003). In examining the sufficiency of contacts for specific jurisdiction, the Eighth Circuit has established a five-factor test the first three factors being the most important to determine the sufficiency of the defendant s contacts. Epps, 327 F.3d at 648. Those factors are: 1. the nature and quality of contacts with the forum state; 2. the quantity of such contacts; 3. the relation of the cause of action to the contacts; 4. the interest of the forum state in providing a forum for its residents; and 5. [the] convenience of the parties. Id. Here there is no evidence in this case that LivaNova PLC has any contacts with Iowa as contemplated by the first three factors, which are the factors of primary importance. Stanton, 340 F.3d at 694. LivaNova PLC is a holding company that does not conduct any business or maintain a presence in Iowa. (Pollock Decl. 8.) LivaNova PLC did not design, manufacture, or market the 3T Heater Cooler System that allegedly caused the Plaintiff s injuries in Iowa, or any products for that matter. (Id ) Instead, it is Sorin Group Deutschland that is the registered manufacturer of the 3T System and Sorin Group USA that markets and sells the 3T System throughout the United States, including in Iowa. (Id. 8, 10.) Sorin Group USA conducts these sales activities out of its principal place of business, which is located in Arvada, Colorado. (Id. 10.) Plaintiff does not allege otherwise. Instead, the Complaint alleges the following purported contacts between LivaNova PLC and Iowa: LivaNova PLC has general and specific contacts [it] maintain[s] in the U.S. (Compl. 2.) LivaNova... advised purchasers in the United States it is the responsible party for the Sorin 3T Heater-Cooler System at issue herein. (Compl. 5.) LivaNova has exclusively communicated with the Food and Drug Administration ( FDA ) and other interested parties with respect to safety concerns about the 3T System. (Citing Exhibits A, B, and C to the Complaint.) (Compl. 5.) 12

15 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 15 of 24 [t]he 3T Systems used at UIHC from January 1, 2012 to January 22, 2016 were designed, manufactured, marketed and/or sold by Defendants LivaNova, Sorin and Sorin USA. (Compl. 5.) These allegations do not represent sufficient minimum contacts with Iowa under Eighth Circuit law. First, Plaintiff s allegation in Paragraph 2 of the Complaint offers nothing more than the bare allegation that LivaNova PLC has contacts with Iowa, and is the type of speculative and conclusory assertion[] that courts in the Eighth Circuit regularly find inadequate to demonstrate a prima facie case of personal jurisdiction.... Wallach v. Whetstone Partners, LLC, No. 4:16 CV 450 CDP, 2016 WL , at *4 (E.D. Mo. July 26, 2016). Plaintiff s second and third alleged contacts fare no better. LivaNova PLC is not registered to do business in Iowa or the United States, and does not contact purchasers of the 3T System. (Pollock Decl. 8.) Sorin Group Deutschland (not LivaNova PLC) is the company responsible to the FDA as the 3T System s 510(k) Applicant and registered manufacturer. (Id. 19.) Further, the communications Plaintiff attaches as exhibits do not constitute purposefully availing contacts. To the extent Plaintiff relies on FDA communications which were sent to LivaNova PLC (Compl. Ex. A), receiving a communication from the FDA does not amount to a purposefully availing contact with Iowa sufficient to support a finding of specific jurisdiction. 5 Plaintiff also cites a press release on the investor-relations page of the LivaNova website, which addresses the FDA warning letter. (Compl. Ex. B.) But it is clear from the Exhibit that this was a press release on a passive website that was intended to inform investors generally. It 5 Indeed, the Baker court took squarely rejected the argument that this communication constituted a contact with Pennsylvania, because [t]he unilateral activity of those who claim some relationship with a nonresident defendant is not enough to show that the defendant purposefully availed itself of the privileges of the forum. Exhibit A, Baker, No. 1:16-cv No. 45 at *9 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). 13

16 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 16 of 24 was not directed to patients or health care facilities involved in the Iowa events, and [a] passive [website] that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction. Dryspace, Inc. v. Crawlspace Concepts, L.L.C., No. 10-CV-100-LRR, 2011 WL , at *5 (N.D. Iowa Mar. 24, 2011) (quoting Lakin v. Prudential Sec., Inc., 348 F.3d 704, 710 (8th Cir. 2003)). Plaintiff also cites a January 2016 letter sent to the FDA by Sean McNerney. (Compl. Ex. C.) But as is clear from the face of the document, Sean McNerney is an officer of Sorin Group USA, not LivaNova PLC. (See also, Pollock Decl. 15.) And while the letter uses the common brand LivaNova, McNerney does not represent the communication as originating from the holding company LivaNova PLC. Finally, LivaNova has never designed, manufactured, marketed and/or sold the 3T System in Iowa or anywhere else. (Id. 7, 8.) In sum, the facts in the Pollock Declaration, as well as on the face of the documents Plaintiff cites, show that LivaNova PLC never had contacts of any nature or quality with the state of Iowa. LivaNova PLC never purposefully availed itself of the privilege of conducting business in Iowa because it never contacted Iowa in the first place. As the Baker court found [t]he evidence submitted by Plaintiffs in an attempt to establish personal jurisdiction over LivaNova PLC based on its contacts with Pennsylvania falls extremely short of the minimum contacts required for due process. Exhibit A, Baker, No. 1:16- cv No. 45 at *11. Without a relationship connecting LivaNova PLC, the State of Iowa, and this litigation, it would be unfair to exercise personal jurisdiction over LivaNova PLC, who had no expectation of having to defend against this action in this forum, and it would therefore violate due process. See Helicopteros Nacionales, 466 U.S. at 414; Evergreen Media Holdings, LLC v. Safran Co., 68 F. Supp. 3d 664, 676 (S.D. Tex. 2014) ( If the plaintiff fails to establish the existence of 14

17 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 17 of 24 minimum contacts with the forum state, the court need not reach the question of whether personal jurisdiction would offend traditional notions of fair play and substantial justice. ). 3. LivaNova PLC does not have the alter ego relationship with either Sorin Group USA or Sorin Group Deutschland necessary to impute their contacts to LivaNova PLC. In addition to the wholesale lack of any direct contacts between LivaNova PLC and Iowa, Plaintiff cannot impute the contacts of either Sorin Group USA or Sorin Group Deutschland to LivaNova PLC under an alter ego theory. It is well-settled that a parent corporation is not doing business in a state merely by the presence of its wholly owned subsidiary. Schultz, 2012 WL , at *4 (quoting Epps, 327 F.3d at 648). Such jurisdiction can only be established where a parent so controlled and dominated the affairs of the subsidiary that the latter's corporate existence was disregarded so as to cause the residential corporation to act as the nonresidential corporate defendant's alter ego. Viasystems, 646 F.3d at 596 (quoting Epps, 327 F.3d at ). Plaintiff s burden is substantial. Showing that Sorin Group USA and Sorin Group Deutschland are subsidiaries of LivaNova PLC is not enough Plaintiff must also show that (1) Sorin Group USA or Sorin Group Deutschland have sufficient forum-related contacts even though they are not at home in Iowa, and (2) LivaNova PLC controls Sorin Group USA and/or Sorin Group Deutschland to the point that they are rendered a mere instrumentality or adjunct of another corporation. Schultz v. Ability Ins. Co., No. C , 2012 WL , at *8 (N.D. Iowa Oct. 9, 2012). Plaintiff cannot make such a showing. When one corporation is a subsidiary of the other, the level of control necessary to substantiate an alter ego relationship must exceed the usual ownership and corporate management that a parent exercises over a subsidiary. Team Central, Inc. v. Teamco, Inc., 271 N.W.2d 914, 923 (Iowa 1978). Under Eighth Circuit law, [e]stablishing personal jurisdiction 15

18 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 18 of 24 over a foreign corporation is interrelated to the doctrine of piercing the corporate veil. Schultz, 2012 WL , at *8 (quoting Lakota Girl Scout Council, Inc. v. Havey Fund Raising Mgmt., Inc., 519 F.2d 634, 637 (8th Cir. 1975)). When deciding alter ego for the purpose of personal jurisdiction including whether to pierce the corporate veil this Court applies state law. Schultz, 2012 WL , at *5 (citation omitted). Iowa courts have held that [a] court may disregard a corporate structure by piercing the corporate veil only under circumstances where the corporation is a mere shell, serving no legitimate business purpose, and used primarily as an intermediary to perpetuate fraud or promote injustice. Schultz, 2012 WL , at *5 (quoting In re Marriage of Ballstaedt, 606 N.W.2d 345, 349 (Iowa 2000)). In Iowa, the corporate veil can be pierced only if: (1) the corporation is undercapitalized, (2) without separate books, (3) its finances are not kept separate from individual finances, individual obligations are paid by the corporation, (4) the corporation is used to promote fraud or illegality, (5) corporate formalities are not followed or (6) the corporation is merely a sham. Schultz, 2012 WL , at *9 (quoting Lakota Girl Scout, 519 F.2d at 638); Cemen Tech, Inc. v. Three D Indus., LLC, 753 N.W.2d 1, 6 (Iowa 2008). As an initial matter, LivaNova PLC is a holding company that is publicly traded on the London Stock Exchange and NASDAQ stock exchange, (Pollock Decl. 5), comparable to companies that are often found not to qualify as alter egos. See, e.g., Epps, 327 F.3d at 645 n.1 ( SISCO is a holding company that owns stock in various companies... ). As the Baker court found, LivaNova PLC is a holding company for Sorin [Group Deutschland] and Sorin [Group] USA, that is analogous to the [international confectionary holding] companies that court previously found to lack alter ego status. Baker, No. 1:16-cv No. 45 at *3, 15 (citing In re 16

19 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 19 of 24 Chocolate Confectionary Antitrust Litig., 602 F. Supp. 2d 538, 570 (M.D. Pa. 2009)). In addition, neither Sorin Group USA nor Sorin Group Deutschland satisfy the Schultz factors identified above for piercing the corporate veil. Sorin Group USA and Sorin Group Deutschland are not undercapitalized. Plaintiff does not make any allegations that either of LivaNova PLC s wholly-owned subsidiaries are undercapitalized. In fact, Sorin Group USA had net revenues from sales of its products approaching $200 million in 2015 alone, and at present, Sorin Group USA directly employs over 360 sales, service, management, manufacturing and administrative employees throughout the United States. (Pollock Decl. 10, 16.) All of these employees are paid by Sorin Group USA and not by any other LivaNova entity. (Id. 16.) LivaNova PLC and its subsidiaries maintain separate books. LivaNova PLC does not manage or administer Sorin Group USA s or Sorin Group Deutschland s payroll system, payment of third party vendors, payment of suppliers or distributors, or payment of taxes. (Id. 14.) Instead, for the products sold in Iowa (and elsewhere in the United States), Sorin Group USA performs accounting and maintains records of its own distinct financials and maintains distinct business records for itself in its Arvada, Colorado place of business. (Id ) LivaNova PLC s subsidiaries maintain independent finances. Sorin Group USA performs accounting and maintains records of its own distinct financials, including its own revenues, costs, profits and losses. (Id. 24.) Sorin Group USA s management team has considerable independent control over spending and investment decisions as well as responsibility for Sorin Group USA s annual forecasting and budgeting process. Sorin Group USA s finance team creates annual sales forecasts and budgets for the sale of products in the United States. (Id ) 17

20 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 20 of 24 Neither Sorin Group USA nor Sorin Group Deutschland is not used to promote fraud or illegality. Plaintiff makes no allegation that the wholly-owned subsidiaries of LivaNova PLC exist to promote fraud or illegality, nor could Plaintiff make such an allegation there is no evidence of fraudulent purpose or action. LivaNova PLC follows corporate formalities. LivaNova PLC does not share officers, directors, or executives with Sorin Group USA or Sorin Group Deutschland. (Pollock Decl. 12.) LivaNova PLC does not occupy or operate any part of Sorin Group USA s facilities within the United States. (Id.) Nor does LivaNova PLC employ sales employees for the benefit of Sorin Group USA or Sorin Group Deutschland. (Id. 14.) Nor does it manage product sales, marketing, or distribution networks for Sorin Group USA or Sorin Group Deutschland. (Id. 13). LivaNova PLC does not participate in or supervise the day-to-day operations of Sorin Group USA or Sorin Group Deutschland. (Id.) Instead, the day-to-day decisions and operating plans of Sorin Group USA and Sorin Group Deutschland are conceived of and executed by the managerial teams of each individual entity, as are employment and contracting decisions. (Id ) And in particular, Sorin Group USA has independent control over the sale and distribution of its products in the United States (subject to all governmental and regulatory requirements), and makes its own operational decisions on how to accomplish physical distribution, how to structure and collect customer payments, and how to maintain adequate supply of products at customer locations. (Id. 18.) While it is true that LivaNova PLC and its subsidiaries may use the same branding, in the form of a shared logo and domain, that fact is not sufficient to subject LivaNova PLC to personal jurisdiction in Iowa. See Biofuels Automation, Inc. v. Kiewit Energy Co., No. CIV , 2010 WL (D. Minn. July 28, 2010) (finding use of brand name by parent and 18

21 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 21 of 24 subsidiary was not sufficient to pierce the corporate veil); Pearson v. Component Tech. Corp., 247 F.3d 471, 484 (3d Cir. 2001) ( Courts have refused to pierce the veil when subsidiary corporations use the trade name of the parent.... ); Jackson v. Tanfoglio Giuseppe, S.R.L., 615 F.3d 579, 587 (5th Cir. 2010) (finding no alter ego relationship even where two entities brands and products appear identical ). Indeed, a veil-piercing doctrine that found common branding to be sufficient evidence of corporate informality to confer alter ego status would subject all foreign parent companies to personal jurisdiction based on use of a common brand, contrary to the findings in numerous cases dealing with some of the most famous and valuable common brands in the world. See, e.g., In re Chocolate Confectionary Antitrust Litig., 674 F. Supp. 2d 580, 599 (M.D. Pa. 2009) (finding no alter ego relationship between Mars Global and Mars Canada, Inc. or between Nestle SA and Nestle USA, Inc., despite use of common brand); Ranza v. Nike, Inc., 793 F.3d 1059 (9th Cir. 2015) cert. denied, 136 S. Ct. 915 (2016) (finding no alter ego relationship between Nike, Inc. and Nike European Operations Netherlands B.V., despite use of common brand); Estate of Thomson ex rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 363 (6th Cir. 2008) (finding no alter ego relationship between Toyota Motor Corp. Worldwide and Toyota Motor Sales, U.S.A., despite use of common brand); Gardemal v. Westin Hotel Co., 186 F.3d 588, 591 (5th Cir. 1999) (finding no alter ego relationship between Westin Hotel Co. and Westin Mexico, S.A. de C.V., despite use of common brand); Abramson v. Walt Disney Co., 132 F. App x 273, 277 (11th Cir. 2005) (finding no alter ego relationship between Walt Disney Company and Walt Disney World, despite use of common brand). Given these facts showing that Sorin Group USA and Sorin Group Deutschland are separate companies, engaged in separate businesses whose daily operations are not dominated 19

22 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 22 of 24 by LivaNova PLC, Plaintiff cannot satisfy the burden to support its jurisdictional allegations by competent proof. As in Baker, LivaNova PLC has shown... that it does not control or otherwise contribute to the manufacturing, marketing, or selling functions of Sorin [Group Deutschland] or Sorin [Group] USA, there is no alter ego relationship and LivaNova PLC should be dismissed for lack of personal jurisdiction. Baker, No. 1:16-cv No. 45 at *15. IV. CONCLUSION For the foregoing reasons, defendant LivaNova PLC respectfully requests that this Court dismiss Plaintiff s Complaint with prejudice, and award such further relief as the Court deems just. Respectfully submitted, DATED: October 17, 2016 /s/ Ross Johnson Ross W. Johnson, #AT ross.johnson@faegrebd.com FAEGRE BAKER DANIELS LLP 801 Grand Avenue, 33 rd Floor Des Moines, IA T: (515) F: (515) Of Counsel Linda S. Svitak, MN ID No (admitted pro hac vice) linda.svitak@faegrebd.com FAEGRE BAKER DANIELS LLP 2200 Wells Fargo Center 90 South 7th Street Minneapolis, MN T: (612) F: (612) Christin E. Garcia, MN ID No (admitted pro hac vice) christin.garcia@faegrebd.com FAEGRE BAKER DANIELS LLP 2200 Wells Fargo Center 20

23 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 23 of South 7th Street Minneapolis, MN T: (612) F: (612) Jared B. Briant, CO ID No (admitted pro hac vice) FAEGRE BAKER DANIELS LLP 3200 Wells Fargo Center 1700 Lincoln Street Denver, CO T: (303) F: (303) Attorneys for Defendant LivaNova PLC 21

24 Case 4:16-cv JAJ-SBJ Document 16-1 Filed 10/17/16 Page 24 of 24 CERTIFICATE OF SERVICE I hereby certify that on October 17, 2016, a copy of the foregoing BRIEF IN SUPPORT OF LIVANOVA PLC S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION PURSUANT TO FED. R. CIV. P. 12(b)(6) was filed electronically. Service of this filing will be made on all ECF-registered counsel by operation of the Court s electronic filing system. Parties may access this filing through the Court s system. Sol H. Weiss sweiss@anapolweiss.com David S. Senoff dsenoff@anapolweiss.com Paola Pearson ppearson@anapolweiss.com Anapol Weiss One Logan Square 130 N. 18 th St., Suite 1600 Philadelphia, PA Bruce L. Braley bbraley@leventhal-law.com Leventhal & Puga 950 S. Cherry St., Suite 600 Denver, CO Attorneys for Plaintiff, Debra Prescott /s/ Ross W. Johnson 22