Fed. Trade Comm'n v. Shire Viropharma, Inc.
917 F.3d 147
| 3rd Cir. | 2019Background
- Shire ViroPharma (successor to ViroPharma) marketed Vancocin capsules, a high‑revenue branded drug vulnerable to generics because it lacked patent/regulatory exclusivity.
- FDA historically required in vivo clinical endpoint studies for bioequivalence of such locally‑acting GI drugs, but later indicated in vitro dissolution testing could suffice; generic ANDAs followed beginning in 2007.
- From 2006–2012 Shire filed 43 submissions (citizen petition amendments, public comments, and litigation) challenging FDA bioequivalence guidance; FDA rejected Shire’s petition and approved three ANDAs on April 9, 2012.
- FTC waited until February 7, 2017 to sue under Section 13(b) of the FTC Act seeking injunctive and equitable monetary relief, alleging Shire’s serial meritless filings unlawfully delayed generic entry (sham petitioning) and harmed competition.
- District Court dismissed the complaint for failure to plead that Shire “is violating” or “is about to violate” the law as required by Section 13(b); FTC appealed.
- Third Circuit affirmed, holding Section 13(b) permits federal‑court injunctive suits only for ongoing or imminent violations, not purely long‑past misconduct absent plausible allegations of imminent recurrence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §13(b) allows suit based on past misconduct plus likelihood of recurrence | §13(b)’s phrase “is violating, or is about to violate” should be satisfied by a past violation plus reasonable likelihood of recurrence; courts apply a "likelihood of recurrence" standard for injunctions | §13(b) requires alleged current or imminent unlawful conduct; it does not authorize suits for long‑past conduct | §13(b) is unambiguous: authorizes suits only for ongoing or impending violations; past misconduct alone is insufficient |
| Whether §13(b)’s “is/about to violate” limitation is jurisdictional | FTC: not jurisdictional; it merely sets substantively low threshold for relief | Shire: argued it was jurisdictional; dismissal relied on that phrasing | Court: requirement is nonjurisdictional (goes to merits), but FTC still must plead the factual predicate at the outset |
| Whether the complaint plausibly alleged Shire was “about to violate” the law | FTC alleged Shire had motive, opportunity, and was marketing other drugs (e.g., Cinryze), creating risk of similar conduct | Shire noted its allegedly illegal petitioning ended in 2012 and Shire divested Vancocin in 2014; complaint lacked specific allegations of imminent misconduct | Complaint failed to plausibly allege Shire was currently violating or about to violate the law; dismissal affirmed |
| Whether FTC could seek equitable monetary relief under §13(b) without meeting the “is/about to” requirement | FTC claimed disgorgement/restitution available under §13(b) as equitable relief | Shire argued any equitable relief under §13(b) still requires meeting the statutory threshold | Court rejected FTC’s standalone monetary‑relief theory on pleading shown—such relief would still require satisfying §13(b) |
Key Cases Cited
- United States v. W.T. Grant Co., 345 U.S. 629 (1953) (likelihood of recurrent violation required for injunction based on past misconduct)
- Fed. Trade Comm’n v. Actavis, Inc., 570 U.S. 136 (2013) (describing Hatch‑Waxman ANDA process and bioequivalence framework)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (statutory limitations are nonjurisdictional unless Congress clearly states otherwise)
- Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635 (2002) (courts should not presume statutes withdraw federal jurisdiction absent clear intent)
- Fed. Trade Comm’n v. Evans Prods. Co., 775 F.2d 1084 (9th Cir. 1985) (injunction under §13(b) denied where illegal conduct ceased and was unlikely to recur)
- Fed. Trade Comm’n v. Accusearch, Inc., 570 F.3d 1187 (10th Cir. 2009) (upheld §13(b) injunction where defendant had capacity and motivation to repeat misconduct)
- E. R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127 (1961) (petitioning protected by First Amendment except sham petitions)
- United Mine Workers v. Pennington, 381 U.S. 657 (1965) (Noerr‑Pennington doctrine scope)
- Touche Ross & Co. v. Redington, 442 U.S. 560 (1979) (remedial purpose does not justify reading statute beyond its clear language)
- Mariotti v. Mariotti Bldg. Prods., Inc., 714 F.3d 761 (3d Cir. 2013) (standard of review on motion to dismiss for failure to state a claim)