Gartin v. Par Pharmaceutical Co. , 289 F. App'x 688 ( 2008 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 24, 2008
No. 07-40451 Charles R. Fulbruge III
Clerk
SPENCER GARTIN, Individually and as Personal Representative of the
Estate of Sabrina Gartin, Deceased; DONNA GARTIN, Individually and as
Personal Representative of the Estate of Sabrina Gartin, Deceased
Plaintiffs – Appellants
v.
PAR PHARMACEUTICAL COMPANIES, INC., a Delaware Corporation, aka
and/or dba PAR Pharmaceutical Inc and/or as Pharmaceutical Resources Inc
Foreign Corporation
Defendant – Appellee
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 4:06-cv-00128
Before KING, HIGGINBOTHAM, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Spencer and Donna Gartin appeal the district court’s grant of Par
Pharmaceutical, Inc.’s motion to quash summons and return of service and the
dismissal of their claims against this defendant. We review the district court’s
dismissal for an abuse of discretion. Finding none, we affirm.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 07-40451
I. FACTS AND PROCEDURAL BACKGROUND
The backdrop for the procedural issues that now confront this court is the
tragic death of the Gartins’ fifteen year old daughter, Sabrina. In November
2004, Sabrina Gartin was prescribed fluoxetine, a generic form of the
antidepressant drug Prozac. Four months later, on March 28, 2004, Sabrina
Gartin committed suicide.
On March 27, 2006, one day before the relevant Texas statute of
limitations expired, the Gartins filed a wrongful death suit in the United States
District Court for the Eastern District of Texas and named the Defendant(s) this
way: “Par Pharmaceutical Companies, Inc., a Delaware corporation, a/k/a and/or
d/b/a Par Pharmaceutical, Inc., and/or as Pharmaceutical Resources, Inc., foreign
corporations, Black and White Corporations IV and Black and White
Corporations I-V, Defendants.” The Gartins alleged that Sabrina’s suicide was
caused by her use of fluoxetine, which they claimed was “manufactured and
marketed by the Defendants.” On April 18, 2006, the Gartins’ counsel, Andy
Vickery, mailed a Notice of Lawsuit and Request for Waiver of Service of
Summons to “Defendants, Par Pharmaceutical Companies, Inc., a Delaware
corporation, a/k/a and/or d/b/a Par Pharmaceutical, Inc., and/or as
Pharmaceutical Resources, Inc., foreign corporations, by and through their
attorney of record, Joseph P. Thomas, Esq.” On June 21, 2006, having received
no response from the entities listed in the notice and waiver, Vickery asked
counsel for Par (Joseph Thomas) whether the waiver would be returned. He was
informed that Par “declined to sign the notice.”
On June 28, 2006, the district court issued a “Notice of Impending
Dismissal,” informing the parties that, although ninety days had passed since
the filing of the Gartins’ complaint, none of the defendants had been served in
accordance with Federal Rule of Civil Procedure 4. The notice reiterated that
under Rule 4(m) service of process must be completed within 120 days of filing
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No. 07-40451
a complaint. The Notice also advised the Gartins that, if more than 120 days
would be needed to serve any of the defendants, their counsel must request an
extension from the court on or before July 25, 2006 (the expiration of the 120-day
service deadline). If dismissal of the case as to any unserved defendant was
agreeable, the Gartins were not required to act.1
On June 30, 2006, pursuant to the Gartins’ request, the clerk of the court
issued a summons to:
Par Pharmaceuticals Companies, Inc., a Delaware corporation, a/k/a
and/or d/b/a Par Pharmaceutical, Inc. and/or as Pharmaceutical
Resources, Inc., c/o its Registered Agent, Corporation Service
Company, 2711 Centerville Road, Suite 400, Wilmington, New
Castle County, Delaware, 19808.
The Gartins’ attorney sent the summons and a copy of the complaint via certified
mail in an envelope addressed to “Par Pharmaceutical Companies Inc.” in care
of its registered agent. The attorney later filed a return of service indicating
that Par Pharmaceutical Companies, Inc. had been served on July 10, 2006.
On July 31, 2006, Par Pharmaceutical Companies, Inc. filed a motion to
dismiss for lack of personal jurisdiction and insufficiency of service of process.
No other Par entity responded to the summons. Par Pharmaceutical Companies,
Inc. asserted that it neither marketed nor manufactured fluoxetine in Texas and
therefore was improperly served. The Gartins responded to the motion by
arguing that jurisdiction over Par Pharmaceutical Companies, Inc. was proper
because it was one and the same with Par Pharmaceutical, Inc., its wholly-
owned subsidiary. Alternatively, the Gartins argued that they had sued all Par
entities, but were willing to dismiss Par Pharmaceutical Companies, Inc. if Par
Pharmaceutical, Inc. remained in the suit and the court permitted the Gartins
to effectuate service on them.
1
On August 3, 2006, the district court dismissed Black and White Corporation IV and
Black and White Corporations I-V pursuant to Rule 4(m) because those companies had not
been served. The Gartins did not object to the dismissal of these defendants.
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No. 07-40451
A case management conference was held on October 20, 2006, during
which the parties discussed whether the Par entities were one and the same for
purposes of the Gartins’ suit and whether both entities had been sued. The
district court indicated that it would not issue a ruling on the motion to dismiss
until sometime in November. Shortly after the conference, on October 23, 2006,
the Gartins’ attorney procured a summons to “Par Pharmaceutical, Inc.” in care
of its registered agent, Corporation Service Company (the same agent appointed
by Par Pharmaceutical Companies, Inc.). Par Pharmaceutical, Inc. was served
on October 25, 2006, and subsequently filed a motion to quash summons and
return of service and to dismiss the complaint pursuant to Federal Rule of Civil
Procedure 12(b)(4), relating to insufficiency of process, and Rule 12(b)(5),
relating to insufficiency of service of process. The Gartins responded by filing
a motion to extend the time for service.
The district court first granted Par Pharmaceutical Companies, Inc.’s
motion to dismiss for lack of personal jurisdiction. The district court then
granted Par Pharmaceutical, Inc.’s motion, quashing the summons and return
of service and dismissing without prejudice all claims against it. In so doing, the
district court acknowledged that the two-year statute of limitations “may have
run,” thus barring a subsequent suit by the Gartins. See Tex. Civ. Prac. & Rem.
Code Ann. § 16.003 (Vernon 2005). The district court found that Plaintiffs failed
to name Par Pharmaceutical, Inc. as a defendant. Alternatively, the district
court found that even if Par Pharmaceutical, Inc. was a named defendant, the
court would not permit the Gartins an extension of time for service because they
could not demonstrate “good cause” for their failure to serve within 120 days.
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No. 07-40451
The Gartins appealed only the grant of Par Pharmaceutical, Inc.’s motion,
arguing that the district court erred in granting the motion to quash service and
return of service and dismissing their claims against Par Pharmaceutical, Inc.2
II. DISCUSSION
As noted above, Par Pharmaceutical, Inc. moved to dismiss the Gartins’
suit under both Rule 12(b)(4) and Rule 12(b)(5). The district court cited both
rules as authority for granting Par Pharmaceutical, Inc.’s motion to dismiss.3
We review an order quashing service and granting dismissal for failure to effect
timely service of process for an abuse of discretion. Lindsey v. United States R.R.
Ret. Bd., 101 F.3d 444, 445 (5th Cir. 1996). “A district court necessarily abuses
its discretion if its ruling is based on an erroneous view of the relevant legal
standards or on a clearly erroneous assessment of the evidence.” Ratliff v.
Stewart, 508 F.3d 225, 229 (5th Cir. 2007) (internal quotation marks omitted).
We can assume for purposes of this opinion that the Gartins’ complaint
sufficiently named Par Pharmaceutical, Inc. That is because, as we will discuss,
even if that entity was properly named, the Gartins’ efforts to serve it were
deficient. Accordingly, we cannot say that the district court abused its discretion
by refusing to extend the time for service in this case.
2
While the Gartins’ Notice of Appeal indicated that they were appealing the Final
Judgment and all orders of the district court, the Gartins have not argued that the dismissal
of Par Pharmaceutical Companies, Inc., for lack of personal jurisdiction was improper.
Therefore, even if they initially intended to appeal this dismissal order, they have waived any
argument that it was in error by failing to brief this issue on appeal. See Fed. R. App. P.
28(a)(9)(A); Procter & Gamble Co. v. Amway Corp., 376 F.3d 496, 500 n.1 (5th Cir. 2004).
3
Generally speaking, “[a]n objection under Rule 12(b)(4) concerns the form of the
process rather than the manner or method of its service,” while a “Rule 12(b)(5) motion
challenges the mode of delivery or the lack of delivery of the summons and complaint.” 5B
CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE: Civil 3d
§ 1353. In cases like this one, where the alleged defect is that the defendant is misnamed in
the summons, the form of process could be challenged under Rule 12(b)(4) on the theory that
the summons does not properly contain the names of the parties, or under Rule 12(b)(5) on the
ground that the wrong party – a party not named in the summons – has been served. Id.
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No. 07-40451
As noted above, the Gartins did not serve Par Pharmaceutical, Inc. with
a summons and copy of the complaint until October 2006, approximately seven
months after filing suit and 90 days after the time period permitted under Rule
4(m) had expired. The district court found that the Gartins failed to establish
“good cause” for the delayed service and, thus, refused to extend the time
permitted for completing service. The Gartins concede that their efforts to effect
service were not “optimal,” but argue that they demonstrated good cause for
failing to effectuate service on Par Pharmaceutical, Inc. within 120 days. In the
alternative, the Gartins argue that a showing of good cause was not necessary
for an extension in their case.
Rule 4(m) permits the dismissal of a suit if the plaintiff fails to serve a
defendant within 120 days of filing, but provides that “if the plaintiff shows good
cause for the failure, the court shall extend the time for service for an
appropriate period.” The analysis under Rule 4(m) proceeds as follows:
[W]hen a district court entertains a motion to extend time for
service, it must first determine whether good cause exists. If good
cause is present, the district court must extend time for service. If
good cause does not exist, the court may, in its discretion, decide
whether to dismiss the case without prejudice or extend time for
service.
Thompson v. Brown, 91 F.3d 20, 21 (5th Cir. 1996) (emphasis in original). This
“good cause” under Rule 4(m) requires “at least as much as would be required to
show excusable neglect, as to which simple inadvertence or mistake of counsel
or ignorance of the rules usually does not suffice.” Lambert v. United States, 44
F.3d 296, 299 (5th Cir. 1995). In addition, courts normally require “some
showing of good faith on the part of the party seeking an enlargement and some
reasonable basis for noncompliance within the time specified . . . .” Id.
1. Good Cause
We review the district court’s good cause determination for an abuse of
discretion. Resolution Trust Corp. v. Starkey, 41 F.3d 1018, 1022 (5th Cir. 1995).
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No. 07-40451
The district court identified three reasons for rejecting the Gartins’ argument
that they had “good cause” for failing to effect service on Par Pharmaceutical,
Inc. within 120 days: (1) the delay of seven months was excessive; (2) the
Gartins failed to seek an extension of time prior to the expiration of the original
120-day deadline; and (3) the Gartins were on notice from the inception of this
lawsuit that they were required to serve Par Pharmaceutical, Inc. individually,
but made no effort to do so.
The Gartins’ arguments that they had “good cause” for failing to effect
service within 120 days of filing suit are unpersuasive. Essentially, they argue
that the combination of confusing corporate nomenclature, uncooperative
defense counsel, and their proper service on Par Pharmaceutical Companies, Inc.
in the waning days of the Rule 4(m) period suffice to show good cause for failure
to serve Par Pharmaceutical, Inc. However, each named defendant must be
served – that is, must receive summons and a copy of the complaint – within the
120-day period. Fed. R. Civ. P. 4(m). The Gartins adamantly insist, and we
accept arguendo, that Par Pharmaceutical, Inc. was a named defendant, along
with two other Par entities. However, this only highlights their failure to serve
separately the very Par entities that they maintain were separately named
defendants. This is a classic case of “mistake of counsel” or “ignorance of the
rules,” which does not suffice to establish good cause under Rule 4(m).
2. Extension of time absent good cause
The Gartins next argue that, even absent a finding of good cause, the
district court abused its discretion by refusing to extend the time for service
because the statute of limitations will bar them from refiling their suit. They
point out that in some contexts of a dismissal without prejudice that occurs after
the limitations period has run, we apply the dismissal with prejudice standard
of review. See Berry v. CIGNA/RSI–CIGNA, 975 F.2d 1188, 1191 (5th Cir.
1992). “We will affirm dismissals with prejudice for failure to prosecute only
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No. 07-40451
when (1) there is a clear record of delay or contumacious conduct by the plaintiff,
and (2) the district court has expressly determined that lesser sanctions would
not prompt diligent prosecution, or the record shows that the district court
employed lesser sanctions that proved to be futile.” Id. Even when a dismissal
is with prejudice, we “view a delay between filing and service as being more
likely to result in prejudice than a delay occurring after service, for in the former
situation the defendant is not put on formal notice and allowed a full opportunity
to discover and preserve relevant evidence when the matter is still relatively
fresh and the evidence is intact and available.” Sealed Appellant v. Sealed
Appellee, 452 F.3d 415, 418 (5th Cir. 2006).
The Gartins want us to extend the Berry test beyond its usual application
to dismissals based on a failure to prosecute. There is some ambiguity in the
precedents,4 but we need not decide today if the Berry test applies. Even if it
does, we will explain why this dismissal still would be proper.
Applying Berry, we first perceive a “clear record of delay.” As the district
court noted, the Gartins were on notice from the inception of this suit that they
were required to serve Par Pharmaceutical, Inc. separately. It still took them
seven months to do so. Their service of Par Pharmaceutical Companies, Inc., is
4
Though the additional analysis is typically applied to dismissals for failure to
prosecute under Federal Rule of Civil Procedure 41(b), this court has used it to review
dismissals for insufficient process and insufficient service of process under Rule 4. See Cole v.
Barnhart, 193 F. App’x 279, 280-81 (5th Cir. 2006) (unpublished); Porter v. Beaumont
Enterprise and Journal, 743 F.2d 269, 271 (5th Cir. 1984); see also Sealed Appellant v. Sealed
Appellee, 452 F.3d 415, 418 (5th Cir. 2006) (dismissal under Rule 41(b), but underlying basis
was insufficient service); Veazey v. Young’s Yacht Sale & Serv., Inc., 644 F.2d 475, 476-77 (5th
Cir. 1981) (same). Further, this standard is to be applied to the “equivalent” of a Rule 41(b)
dismissal. Berry, 975 F.2d at 1190; see also, Fed. R. Civ. P. 4, cmt. to subdivision (m) (“Relief
may be justified, for example, if the applicable statute of limitations would bar the refiled
action, or if the defendant is evading service or conceals a defect in attempted service.”). A
recent but non-precedential opinion of this court found that the clear delay/lesser sanctions
analysis does not apply when a dismissal is “based solely on the provisions of Rule 4(m) and
not Rule 41(b).” Newby v. Enron, No. 06-20658, slip op. at 7-8 n.3, 2008 WL 2605118, *3 n.3
(5th Cir. July 2, 2008) (unpublished).
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No. 07-40451
irrelevant to our review of the record of delay. Each defendant must be served
separately. When considering whether dismissal for insufficient service of
process is appropriate, we must consider the Gartins’ delay in relation to the
specific defendant that has moved to quash service – Par Pharmaceutical, Inc.
Looking to that record, we find a seven-month period of what can only be
characterized as total inactivity. See Porter v. Beaumont Enter. and Journal,
743 F.2d 269, 271 (5th Cir. 1984).
Second, the district court’s failure to resort to lesser sanctions is not fatal
to the decision to dismiss the Gartins’ suit. We noted some time ago that a
“delay between filing and service ordinarily is to be viewed more seriously than
a delay of a like period of time occurring after service of process.” Veazey, 644
F.2d at 478. As such, a delay in service of process often gives rise to the type of
situation in which “a lesser sanction would not better serve the interests of
justice.” Id. This is particularly true where the plaintiff, as is the case here, has
engaged in a clear pattern of delay and neglect with respect to the defendant
seeking dismissal under Rule 4(m). See Porter, 743 F.2d at 269. The district
court’s “Notice of Impending Dismissal” warned the Gartins that the defendants
must be served or their suit would be dismissed. Further, the notice invited a
request for the extension of time to serve any or all of the defendants. Although
ample time was given, no request was made by the Gartins and Par
Pharmaceutical, Inc. was not served within the 120-day period. The Gartins
ignored the district court’s sua sponte warning. There is no reason to believe
that lesser sanctions would have been effective in this case.
Finally, we find the existence of at least one aggravating factor in this
case.5 Par asserts that it was prejudiced by the seven-month delay between
5
Even when the two requisite factors are met, there should usually be at least one
“aggravating factor” to warrant dismissal. Rogers v. Kroger Co., 669 F.2d 317, 320 (5th Cir.
1982); but see Sealed Appellant, 452 F.3d at 418 (noting that aggravating factors need not
“always” be present). Prior cases have identified three aggravating factors: (1) the delay was
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No. 07-40451
service and filing. The Gartins filed their complaint one day before the statute
of limitations expired (approximately two years after their cause of action
accrued). They then waited another seven months to serve Par Pharmaceutical,
Inc. Permitting an extension after such a delay is prejudicial by its very nature.
Id. As we recognized in Veazey:
To permit a delay in service when the complaint is served
immediately prior to the running of the statute of limitations
undercuts the purposes served by the statute. Once the statute has
run, a potential defendant who has not been served is entitled to
expect that he will no longer have to defend against the claim. If
service can be delayed indefinitely once the complaint is filed within
the statutory period, these expectations are defeated and the statute
of limitations no longer protects defendants from stale claims.
644 F.2d at 478. Rule 4(m) must have some teeth if it is to avoid becoming a
last-ditch, federal tolling mechanism for dilatory state tort claimants.
This is a close case on the district court’s exercise of discretion, but close
cases do not prevent discretionary dismissal. Even if the clear delay/lesser
sanctions analysis is utilized, the district court did not abuse its discretion by
refusing the Gartins’ late request for an extension of time under Rule 4(m).
The judgment of the district court is AFFIRMED.
caused by the plaintiff, as opposed to her attorney; (2) the defendant suffered actual prejudice;
or (3) the delay was caused by intentional conduct. Berry, 975 F.2d at 1191.
10