NEW YORK CITY (Legal Newsline) – Plaintiff Array BioPharma Inc. is asking that its complaint against defendant AstraZeneca PLC be remanded back to state court.
According to Array’s counsel Kurt Wm. Hemr, AstraZeneca’s recent removal of the case to federal court violates a forum selection clause indicates New York state courts have exclusive jurisdiction over any action relating to a collaboration and licensing agreement.
Hemr, attorney with Skadden, Arps, Slate, Meagher & Flom LLP, stated in a Jan. 16 remand request that in the agreement, “Array licensed to AstraZeneca intellectual property in a pharmaceutical compound known as ‘selumetinib,’ and also granted AstraZeneca a qualified sublicense right subject to a royalty of 12 percent of all sublicense proceeds,” according to the motion.
“Here, the forum selection clause was part of a freely negotiated, arms-length agreement between sophisticated corporate parties. There are no facts to which AstraZeneca can point that would demonstrate that the forum selection clause was 'unreasonable under the circumstances.'"
At issue in the complaint is a sublicense issued by AstraZeneca to Merck in which the two companies agreed to develop selumetinib, a cancer treatment. Array discovered selumetinib and had licensed it to AstraZeneca.
Merck will pay $8.5 billion for the sublicense, the complaint says, and Array feels it is owed 12 percent of the proceeds.
Array first filed its complaint in state court on Dec. 8, and AstraZeneca removed the case to federal court a month later.
Hemr cites Rochester City Sch. Dist. v. Aramark Educ. Servs. LLC from 2017 to prove his argument that the case should be heard in state court.
“The unambiguous language of the forum selection clause fixes the courts of New York state — not this federal court — as the sole forum for resolving any disputes that arise under the agreement, and thus bars removal of this action,” Hemr wrote.
Hemr noted Western District of New York Judge David Larimer’s recent consideration of a forum selection clause that mandated arguments heard "in the appropriate courts of the State of New York."
“He observed that ‘when a contract term refers to the courts of' a certain state or county, it is a marker of sovereignty rather than geography, and therefore only state courts are implicated,’" Hemr wrote, adding Larimer further rejected that an argument that courts in the plural form referenced New York federal and state courts.
Hemr said Larimer’s reasoning was “that the parties could readily have inserted the words 'state or federal' before 'courts' had they intended that litigation could be brought in either forum,” according to the motion.
“Here, the language of the forum selection clause is even more explicit than the language that the court held to bar removal in Rochester City,” Hemr wrote.
“This forum selection clause here refers simply to the ‘courts of the state of New York,’ rather than to the ‘appropriate courts of the state of New York.’ The forum selection clause here also contains an additional, distinctive marker of exclusivity not present in Rochester City — to wit, the word ‘exclusive.’”
Hemr concluded noting the court should not only remand the Supreme Court of the County of New York, but should also recall authority to determine Array's awards and attorneys suffered in seeking the remand.