Allergan USA, Inc. v. Prescribers Choice, Inc.
364 F. Supp. 3d 1089
C.D. Cal.2019Background
- Plaintiff Allergan USA sued Prescriber's Choice and Sincerus (related entities) claiming false advertising, UCL/Sherman Law violations, California FAL, and Florida FDUTPA; defendants counterclaimed under Lanham Act and UCL.
- Sincerus is a registered FDA "503B" outsourcing facility that compounded and distributed dozens of formulations using bulk drug substances; many of those bulk substances were not on FDA’s Category 1 list until July 2018 and were not on the FDA drug-shortage or clinical-need lists.
- Defendants’ sales force marketed Sincerus products to dermatologists, representing (among other things) that Sincerus was a registered/inspected FDA facility, that products were "FDA approved," and that legal opinions (including a Ropes & Gray memorandum) supported compliance.
- Allergan alleges these representations were literally false and materially deceptive, causing lost sales; defendants argue they followed FDA interim guidance (Category 1 interim policy), used FDA‑registered ingredient sources, and marketed to sophisticated physician customers.
- Procedurally: cross-motions for summary judgment; Court considered judicial notice requests and the FDA Interim Policy; oral argument held January 10, 2019.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for injunctive/declaratory relief | Allergan retains economic interest (distribution agreements, supply/earnout arrangements) and thus faces future injury | Defendants: Allergan sold rights to key products and lacks imminent injury; earnouts too speculative | Court: Denied defendants' partial SJ—Allergan has standing via supply agreement and contingent earnouts; may seek prospective relief |
| Sherman Law / UCL (unlawful prong) — use of bulk APIs | Defendants compounded and sold unapproved new drugs not authorized by §503B (not on shortage or clinical-need lists), so conduct violated Sherman Law and UCL | Defendants relied on FDA Interim Policy (Category 1 transitional guidance) and inspections; argued compliance or good-faith reliance | Court: Granted in part for period before July 2018 — Sincerus violated Sherman Law/UCL before Category 1 status; factual dispute remains whether violations continued after July 2018 |
| Lanham Act / FAL — false advertising claims | Representations that products/operations were "FDA approved," "FDA facility," or fully compliant were literally false and materially deceptive; made in commercial promotions to influence prescribing | Defendants: statements were not literally false, were puffery, targeted to sophisticated physicians familiar with FDA, and based on FDA-registered inputs and legal review | Court: Granted in part — court found no material dispute that certain statements (e.g., claiming FDA approval/compliance) were literally false and material; claims about product superiority are more equivocal (possible puffery) |
| Defendants' counterclaims (Allergan liability) | Allergan denied false campaign; argues Defendants violated 503B so communications about legality were nonfalse | Defendants: evidence of coordinated campaign by Allergan and competitors to "plant seeds of doubt," plus defamatory statements | Held: Court denied Allergan’s SJ on counterclaims — factual disputes (scope and character of Allergan conduct) for jury to decide |
Key Cases Cited
- Castillo-Villagra v. I.N.S., 972 F.2d 1017 (9th Cir.) (judicial notice basics)
- United States v. Ritchie, 342 F.3d 903 (9th Cir.) (judicial notice of administrative records)
- Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir.) (limits on taking notice of disputed facts within judicially noticed documents)
- Harris v. County of Orange, 682 F.3d 1126 (9th Cir.) (judicial notice of public records)
- Lyons v. City of Los Angeles, 461 U.S. 95 (U.S.) (standing and irreparable injury requirement for injunctions)
- Anderson v. Liberty Lobby, 477 U.S. 242 (U.S.) (summary judgment standard and burden)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S.) (summary judgment allocation of proof)
- Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134 (9th Cir.) (Lanham Act falsity and deception standards)
- Newcal Indus., Inc. v. Ikon Office Solutions, 513 F.3d 1038 (9th Cir.) (distinguishing puffery from actionable statements)
- Chabner v. United Omaha Life Ins. Co., 225 F.3d 1042 (9th Cir.) (UCL incorporates other laws)
- Farm Raised Salmon Cases, 42 Cal.4th 1077 (Cal.) (Sherman Law violations as basis for UCL claims)