This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).







Judith Yarrington,





Solvay Pharmaceuticals, Inc., et al.,



Filed September 26, 2006

Affirmed in part, reversed in part, and remanded

Ross, Judge


Dakota County District Court

File No. C9-04-7261



Daniel E. Gustafson, Jason S. Kilene, Amanda M. Martin, Gustafson Gluek PLLC, 650 Northstar East, 608 Second Avenue South, Minneapolis, MN 55402-1937; and


Michael W. Sobol (pro hac vice), Leiff, Cabraser, Heimann & Bernstein, LLP, Embarcadero Center West, 275 Battery Street, 30th Floor, San Francisco, CA 94111-3339 (for appellant)


Michael A. Lindsay, Surya Saxena, Dorsey & Whitney LLP, 50 South Sixth Street, Suite 1500, Minneapolis, MN 55402-1498; and


Phillip A. Bradley (pro hac vice), McKenna Long & Aldridge LLP, 303 Peachtree Street N.E., Suite 5300, Atlanta, GA 30308-3265 (for respondents)



            Considered and decided by Ross, Presiding Judge; Shumaker, Judge; and Wright, Judge.

U N P U B L I S H E D   O P I N I O N


ROSS, Judge


This case concerns alleged misrepresentation in the sale of a pharmaceutical product.  Judith Yarrington appeals the dismissal of her action against respondent Solvay Pharmaceuticals, Inc., and respondent Solvay America, Inc.  Yarrington argues that the district court erred by dismissing her claims against Solvay America for lack of personal jurisdiction and by dismissing her claims against Solvay Pharmaceuticals for failure to state a claim on which relief can be granted.  We affirm in part, reverse in part, and remand.


Solvay Pharmaceuticals manufactures and markets prescription drugs, including Estratest and half-strength Estratest H.S. (collectively referred to as Estratest).  Estratest is a combination of estrogen and androgen prescribed to manage moderate to severe vasomotor symptoms associated with menopause.  Solvay Pharmaceuticals has manufactured and marketed Estratest since 1964.  The Food and Drug Administration has never approved Estratest as safe and effective, or suitable for marketing, distribution, or sale to the public. 

            Solvay Pharmaceuticals is incorporated in Georgia.  Its principal place of business is in Georgia, but it maintains an office in Baudette, Minnesota.  Solvay Pharmaceuticals is a wholly owned subsidiary of respondent Solvay America (collectively referred to as Solvay), which is incorporated in Delaware and has its principal place of business in Texas.

In March 2004, Judith Yarrington filed a class-action complaint in Dakota County district court against Solvay alleging negligent misrepresentation, fraud, breach of express and implied warranties, and violations of several of Minnesota’s consumer-fraud statutes.  Yarrington alleges that the FDA has not approved the prescription of Estratest.  She claims that a physician prescribed Estratest to her in January 2004 and that its ingestion caused her to suffer from several non-life-threatening health disorders.  On behalf of herself and others similarly situated, Yarrington sought an injunction directing Solvay to conduct a national media campaign to inform purported class members and physicians that Estratest is not FDA approved, to pay compensatory damages in excess of $50,000, and to pay disgorgement of Solvay’s profits from the sale of Estratest, with restitution.  Solvay removed the case to federal district court, which remanded the case to Minnesota district court for lack of federal subject-matter jurisdiction.

            Solvay America then moved for dismissal on the basis that the Minnesota district court lacked personal jurisdiction.  Solvay Pharmaceuticals also moved for dismissal, arguing that Yarrington failed to state a claim upon which relief can be granted and failed to plead her claims of fraud with sufficient particularity.  Yarrington argued that Minnesota has derivative jurisdiction over Solvay America and that Solvay Pharmaceuticals’ motion to dismiss is without merit.

            The district court found that “Solvay America and Solvay Pharmaceuticals are separate entities and are not so intertwined as to create sufficient contacts between Solvay America and Minnesota,” and it granted Solvay America’s motion to dismiss for lack of personal jurisdiction.  It dismissed six of Yarrington’s eight claims—the fraud-based claims—for failure to plead with sufficient particularity to satisfy the pleading requirements of the Minnesota Rules of Civil Procedure.  The district court noted that Yarrington’s complaint failed to identify any specific fraudulent statement or omission, failed to allege when or where either defendant made any fraudulent statement, and failed to allege that she or her physician ever saw or relied upon any alleged misrepresentation regarding FDA approval.  The district court dismissed Yarrington’s warranty claims because Yarrington did not provide notice to Solvay to satisfy a prerequisite for suit and because Yarrington failed to plead facts that establish the existence of a warranty.  Yarrington’s appeal from the dismissal of her claims follows.


Lack of Personal Jurisdiction

Yarrington first challenges the district court’s dismissal of her claims against Solvay America for lack of personal jurisdiction over Solvay AmericaWhether personal jurisdiction exists is a question of law, which we review de novo.  Juelich v. Yamazaki Mazak Optonics Corp., 682 N.W.2d 565, 569 (Minn. 2004).  To establish personal jurisdiction, a plaintiff has the burden to prove that a defendant has sufficient contacts with the forum state. 570.  When considering a pretrial jurisdiction challenge, the district court assumes that the plaintiff’s allegations and supporting evidence are true.  Id.  The plaintiff need only make a prima facie showing of jurisdiction to survive a motion to dismiss for lack of personal jurisdiction.  Hardrives, Inc. v. City of LaCrosse, 307 Minn. 290, 296, 240 N.W.2d 814, 818 (1976).

Yarrington’s complaint alleges that the “Defendants . . . purposefully availed themselves of the privilege of conducting activities within the State of Minnesota and, in fact, maintain regular and continuous business contacts within the State.”  Accepting these allegations as true, we conclude that Yarrington’s complaint presents a prima facie showing of jurisdiction sufficient to survive Solvay America’s motion to dismiss.

The district court did not limit its consideration to the facts alleged in the complaint.  Solvay America supported its motion to dismiss for lack of personal jurisdiction with an affidavit from its vice president and general counsel, Edwin Buckingham.  The Buckingham affidavit tends to demonstrate that Solvay America lacks sufficient contacts with Minnesota to establish personal jurisdiction and that Solvay Pharmaceuticals is not “an instrumentality or alter-ego” of Solvay America. See Zimmerman v. Am. Inter-Ins. Exch., 386 N.W.2d 825, 828 (Minn. App. 1986) (noting that a nonresident corporation may be subject to personal jurisdiction in Minnesota by virtue of the contacts of a subsidiary corporation if the two corporations are “organized and operated so that one corporation is an instrumentality or alter-ego of the other corporation”), review denied (Minn. July 31, 1986).

Yarrington attempted to counter the Buckingham affidavit by requesting that the district court allow jurisdictional discovery, contending that factual weaknesses in the affidavit could be exposed on cross examination and through unspecified other discovery.  The district court denied Yarrington’s request for jurisdictional discovery.  It nevertheless based its dismissal of Yarrington’s claims against Solvay America for lack of personal jurisdiction on factual findings that depend entirely on the assertions in the Buckingham affidavit.

We agree with Yarrington that the district court should have allowed her to conduct jurisdictional discovery of facts relevant to the court’s jurisdiction over Solvay America.  On a rule 12.02 motion to dismiss for lack of personal jurisdiction, the district court may look beyond the complaint and consider other facts in evidence.  See Hardrives, 307 Minn. at 293, 240 N.W.2d at 816 (noting that a plaintiff need only make a prima facie case through the complaint and other supporting evidence).  The decision to grant jurisdictional discovery is within the district court’s broad discretionBehm v. John Nuveen & Co., 555 N.W.2d 301, 305 (Minn. App. 1996).  As this court has expressed, however, “[j]urisdictional discovery generally is permitted before a court rules on a motion to dismiss for lack of personal jurisdiction.”  Id.

Solvay America criticizes Yarrington’s failure to carry her burden to prove sufficient contacts with the state to justify the court’s exercise of personal jurisdiction.  But Solvay America’s contention that the “evidence clearly establishes that Solvay America does not have sufficient minimum contacts with Minnesota” would be much more persuasive had Yarrington not been denied the opportunity to collect relevant jurisdictional evidence through discovery before dismissal.  Solvay America is generally correct that jurisdictional discovery is unnecessary if the discovery is unlikely to lead to evidence establishing personal jurisdiction.  See id. at 305.  But Solvay America’s reliance on Behm for the proposition that jurisdictional discovery is unnecessary here is not well founded.  In Behm, we saw no abuse of discretion in the district court’s tacit denial of a plaintiff’s request to supplement the record in support of personal jurisdiction.  Id.  But in that case, the district court and this court concluded that supplementing the record would have been materially unproductive only after each court reviewed the proposed supplemental information and determined that the information could not prove the requisite minimum contacts for personal jurisdiction.  Id. Here, Yarrington is not challenging the district court’s refusal to consider evidence; she challenges its refusal to allow the discovery of evidence.  Because the district court considered and relied exclusively on information that Solvay America supplied to rebut the jurisdictional allegations in the complaint, we conclude that it should have allowed Yarrington limited discovery to provide support for those allegations.  At the very least, Yarrington should have been allowed an opportunity to depose Buckingham to test the veracity of his affidavit.  Solvay America’s contention that there are insufficient facts to connect it to the state as it regards Yarrington’s cause of action may ultimately prove to be accurate.  The district court abused its discretion, however, by resolving this factual dispute against Yarrington’s jurisdictional allegations based on Solvay America’s factual representations while foreclosing jurisdictional discoveryWe therefore reverse the district court’s dismissal of Yarrington’s claims against Solvay America and remand for jurisdictional discovery as limited at the discretion of the district court.

Failure to State a Claim

Yarrington also argues that the district court erred by dismissing her lawsuit for failure to state a claim upon which relief can be granted.  We review the dismissal de novo to consider whether the complaint sets forth a legally sufficient claim for relief.  Barton v. Moore, 558 N.W.2d 746, 749 (Minn. 1997).  We must accept the allegations in the pleadings as true and draw all inferences in favor of Yarrington as the non-moving party.  Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d 550, 553 (Minn. 2003). 

Yarrington raised, and the district court dismissed, several claims arising out of Solvay’s alleged misrepresentations and fraud.  “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.”  Minn. R. Civ. P. 9.02.  Recitation of the elements of fraud without specific factual allegations is insufficient.  Stubblefield v. Gruenberg, 426 N.W.2d 912, 914 (Minn. App. 1988).  Failure to plead fraud with sufficient particularity justifies dismissal of the claim.  See Westgor v. Grimm, 318 N.W.2d 56, 58 (Minn. 1982).

The district court applied this heightened pleading requirement to Yarrington’s common-law fraud, negligent misrepresentation, and statutory consumer-fraud claims.  Yarrington’s complaint alleges several specific representations by Solvay about Estratest.  It alleges that Solvay made representations that Estratest is “indicated” for the management of vasomotor symptoms associated with menopause and that this information was included in the Physician’s Desk Reference (PDR) and on various websites, including Solvay’s.  The complaint specifically asserts that the information Solvay provided the PDR “deceives physicians and consumers into believing that Estratest is an FDA approved drug.”  Yarrington identifies only one, alleged actual misrepresentation by Solvay concerning Estratest’s FDA approval status.  She alleges that Solvay checked a box on a Department of Defense form indicating that Estratest is FDA approved.  Although her 104-paragraph complaint otherwise lacks allegations of fraudulent statements by Solvay, it does make these specific allegations of misrepresentation, and we conclude that Yarrington alleged the circumstances constituting fraud with sufficient particularity to satisfy the heightened pleading requirement in rule 9.02.

But it does not follow from the satisfaction of the heightened pleading requirement in rule 9.02 that Yarrington stated claims for which relief can be granted.  On careful review of her complaint, we conclude that four of Yarrington’s eight claims should have survived Solvay’s motion to dismiss.

We first consider Yarrington’s two common-law misrepresentation claims.  The elements of common-law fraud are (1) a false representation of a material fact; (2) knowledge by the person making the representation of its falsity; (3) an intention that another person act on the false representation or circumstances justifying reliance on the false representation; (4) reliance in fact on the false representation; and (5) damages attributable to the false representation.  In re Strid, 487 N.W.2d 891, 893–94 (Minn. 1992).  Negligent misrepresentation requires the same proof as fraud, minus scienter.  Florenzano v. Olson, 387 N.W.2d 168, 173 (Minn. 1986).  Both common-law fraud and negligent misrepresentation require that a plaintiff prove reliance on the allegedly false representation.  Strid, 487 N.W.2d at 894; Florenzano, 387 N.W.2d at 174 n.4.  Yarrington’s complaint does not allege that she or her doctor relied on any representation by Solvay.  Because Yarrington failed to allege reliance on Solvay’s allegedly false representations, we conclude that Yarrington failed to state a common-law fraud or negligent-misrepresentation claim upon which relief can be granted.  The district court did not err by dismissing these two claims.

We next turn to Yarrington’s statutory consumer-fraud claims.  Yarrington’s complaint alleges consumer fraud, in violation of Minn. Stat. § 325F.69 (2002); unlawful trade practices, in violation of Minn. Stat. § 325D.09 (2002); deceptive trade practices, in violation of Minn. Stat. § 325D.44 (2002); and false statement in advertising, in violation of Minn. Stat. § 325F.67 (2002).  These four claims require Yarrington to show that Solvay made a false representation, misled, or caused confusion in its marketing of Estratest.  See Minn. Stat. §§ 325D.09, .44, 325F.67, .69 (2002).

The Minnesota legislature passed the consumer-fraud statutes to “make it easier to sue for consumer fraud than it had been to sue for fraud at common law.”  State by Humphrey v. Alpine Air Prods., Inc., 500 N.W.2d 788, 790 (Minn. 1993).  It did so by eliminating the common-law requirement that a plaintiff show reliance on an alleged misrepresentation.  Id.  It is, therefore, not necessary to plead individual consumer reliance on an alleged misrepresentation in a complaint of violations of Minnesota’s consumer-fraud statutes.  See Group Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2, 12-13 (Minn. 2001).

Although a plaintiff need not plead reliance in a statutory consumer-fraud claim, “causation remains an element of such a claim.”  Id. at 13.  Yarrington’s allegation that “information provided by [Solvay] that is published in the PDR deceives physicians and consumers into believing that Estratest is an FDA approved drug,” coupled with the allegation that this deception causes the drug’s prescription, sufficiently alleges causation.  These allegations, along with other similar causal references throughout her complaint, satisfy the pleading requirement for her statutory consumer-fraud claims.  Our determination does not address the merit of these allegations; but because Yarrington did not fail to state consumer-fraud claims upon which relief can be granted, we conclude that the district court erred by dismissing these claims at this preliminary stage.

We next address the district court’s dismissal of Yarrington’s express- and implied-warranty claims.  The district court also dismissed these two claims for failure to state a claim upon which relief can be granted.  Yarrington’s complaint alleges that by falsely representing Estratest to be FDA approved, Solvay made warranties that Estratest is safe, effective, and suitable for sale.  The district court determined that Yarrington’s warranty claims fail because she did not give Solvay the required notice of the alleged warranty breaches, because Yarrington did not allege that Solvay made specific claims or promises about Estratest being FDA approved, and because Yarrington did not allege any facts establishing a link between the alleged nonconformity and her damages.  We agree with the district court’s decision to dismiss Yarrington’s warranty claims.

To succeed on a claim of breach of warranty, a plaintiff must prove (1) the existence of a warranty; (2) breach of the warranty; and (3) causation of damages.  Duxbury v. Spex Feeds, Inc., 681 N.W.2d 380, 393 (Minn. App. 2004) (citing Peterson v. Bendix Home Sys., Inc., 318 N.W.2d 50, 52–53 (Minn. 1982)), review denied (Minn. Aug. 25, 2004).  When a seller makes “[a]ny affirmation of fact or promise” about a product to a purchaser, an express warranty arises that the product will conform to that promise.  Minn. Stat. § 336.2‑313(1)(a) (2004).  An implied warranty of merchantability arises automatically when a seller is in the business of furnishing a product to the consumer; the implied warranty provides that the product is fit for its ordinary and intended use.  Id.,§ 336.2‑314(1), (2)(c) (2004).  But notice must generally precede a successful warranty-breach claim: Minnesota law requires that a buyer who discovers a breach of warranty “must within a reasonable time after the buyer discovers or should have discovered any breach notify the seller of [the] breach or be barred from any remedy.”  Id. § 336.2‑607(3)(a) (2004).

Yarrington does not allege that she ever gave notice to Solvay or to any direct seller of Estratest that Solvay was falsely representing Estratest as having FDA approval and was unsuitable for use.  She argues instead that notice is unnecessary because Solvay was aware that Estratest did not have FDA approval.  See Church of the Nativity v. Watpro, Inc., 491 N.W.2d 1, 5 (Minn. 1992), overruled on other grounds by Ly v. Nystrom, 615 N.W.2d 302, 314 n.25 (Minn. 2000).  But Yarrington’s warranty claims are not based on Estratest not being approved by the FDA but on Solvay’s alleged promise that Estratest is FDA approved and on Solvay’s marketing of Estratest as being fit for sale and for the indicated uses.  Solvay’s knowledge that Estratest lacked FDA approval has no bearing on whether Solvay promised that Estratest was FDA approved or whether Estratest is allegedly not fit for its indicated uses.  We are not persuaded by Yarrington’s contention that she need not provide notice of the alleged warranty breaches.

Yarrington’s complaint also fails to allege that Solvay made an affirmation of fact or a promise about Estratest’s FDA approval to her or her doctor.  She has therefore failed to allege facts establishing the existence of an express warranty.  See Minn. Stat. § 336.2‑313(1)(a).  Additionally, Yarrington’s complaint does not allege that Estratest is unfit for its indicated uses, except to claim that the lack of FDA approval establishes lack of fitness.  Because fitness for an intended use does not depend on FDA approval, Yarrington has failed to allege facts establishing the existence of an implied warranty.  See id. § 336.2‑314(1), (2)(c).  We conclude that the district court did not err by dismissing Yarrington’s claims for breach of express and implied warranty.

Affirmed in part, reversed in part, and remanded.