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Hound Partners Offshore Fund LP v. Valeant Pharmaceuticals International, Inc.

United States District Court, D. New Jersey

April 24, 2018

HOUND PARTNERS OFFSHORE FUND, LP, HOUND PARTNERS LONG MASTER LP, and HOUND PARTNERS CONCENTRATED MASTER LP, Plaintiffs,
v.
VALEANT PHARMACEUTICALS INTERNATIONAL, INC., J. MICHAEL PEARSON, HOWARD B. SCHILLER, ROBERT S. ROSIELLO, DEBORAH JORN, ARI S. KELLEN, TANYA CARRO, ROBERT A. INGRAM, RONALD H. FARMER, COLLEEN GOGGINS, THEO MELAS-KYRIAZA, ANDERS LÖNNER, ROBERT N. POWER, NORMA PROVENCIO, KATHERINE B. STEVENSON, PRICEWATERHOUSECOOPERS LLP, DEUTSCHE BANK SECURITIES INC., HSBC SECURITIES USA INC., MUFG SECURITIES AMERICAS INC. f/k/a MITSUBISHI UFJ SECURITIES USA INC., DNB MARKETS INC., BARCLAYS CAPITAL, INC., MORGAN STANLEY & CO. LLC, RBC CAPITAL MARKETS, LLC, and SUNTRUST ROBINSON HUMPHREY, INC., Defendants.

          For the plaintiffs: Chad Johnson Jennifer Barrett Steig D. Olson Rollo C. Baker Kathryn Bonacorsi Jesse Bernstein Quinn Emanuel Urquhart & Sullivan, LLP

          For defendants Valeant Pharmaceuticals International, Inc., Robert L. Rosiello, Ari S. Kellen, Ronald H. Farmer, Colleen Goggins, Robert A. Ingram, Anders Lönner, Theo Melas-Kyriaza, Robert N. Power, Norma Provencio, and Katharine B. Stevenson:

          Paul C. Curnin Jonathan K. Youngwood Craig S. Waldman Daniel J. Stujenske Dean McGee Simpson Thacher & Bartlett LLP

          For defendants Deutsche Bank Securities, Inc., HSBC Securities (USA) Inc., MUFG Securities Americas Inc., DNB Markets Inc., Barclays Capital Inc. Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, and Suntrust Robinson Humphrey, Inc.: Richard A. Rosen Paul, Weiss, Rifkind, Wharton & Garrison LLP

          For defendant Tanya Carro: William J. Schwartz Laura G. Birger Cooley LLP

          For defendant Deborah Jorn: Cara David Barry A. Bohrer Michael L. Yaeger Schulte Roth & Zabel LLP

          For defendant J. Michael Pearson: Holly S. Wintermute Debevoise & Plimpton LLP

          Jonathan R. Tuttle Ada F. Johnson Debevoise & Plimpton LLP

          For defendant PricewaterhouseCoopers LLP: James J. Capra King & Spalding LLP

          Kenneth Y. Turnbull King & Spalding LLP

          For defendant Howard B. Schiller: Robert Y. Sperling Joseph L. Motto Winston & Strawn LLP

          OPINION AND ORDER

          DENISE COTE, District Judge

         After Valeant Pharmaceuticals International, Inc.'s (“Valeant”) stock price declined by nearly 90% between August 2015 to June 2016, numerous lawsuits were brought against it and related parties for, inter alia, securities fraud. The United States District Court for the District of New Jersey has before it twenty-seven such actions, consisting of a class action and twenty-six associated “opt-out” actions. This lawsuit is the twenty-eighth filed against Valeant. Defendants have moved to transfer this action to the District of New Jersey under 28 U.S.C. § 1404 (“Section 1404”).

         In seeking to avoid transfer, plaintiffs Hound Partners Offshore Fund LP, Hound Partners Long Master LP, and Hound Partners Concentrated Master LP (collectively, “Hound Partners”) primarily argue that the Securities Litigation Uniform Standards Act (“SLUSA”) precludes, or at the very least counsels against, transfer. They contend that because they have brought state law claims in addition to their federal claims, and because SLUSA will likely preclude consideration of these state law claims in the District of New Jersey, that the District of New Jersey is not a place where this action “might have been brought, ” as is required to transfer an action under Section 1404. In the alternative, they contend that the efficiencies the defendants seek to obtain from transfer are illusory, because this action either will not be able to be coordinated with the other actions pending against Valeant, or the state law claims will need to be re-filed in state court.

         For the following reasons, the District of New Jersey is a court where this action “might have been brought, ” within the meaning of Section 1404. After balancing the discretionary considerations applicable on a motion to transfer, the advantages of transfer to the District of New Jersey clearly outweigh any benefits of the case remaining in this district. Therefore, defendants' February 2, 2018 motion to transfer the case to the District of New Jersey is granted.

         BACKGROUND

         The following facts are either undisputed, or drawn from the complaint. Hound Partners consists of three limited partnerships incorporated in the Cayman Islands, with a principal place of business in New York. Each of the Hound Partners entities is managed and completely controlled by Hound Partners LLC, from its New York office. Defendant Valeant is a Canadian corporation. Valeant's U.S. headquarters is located in Bridgewater, New Jersey. ...


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