355 F. Supp. 3d 145
E.D.N.Y.2018Background
- End-Payor Plaintiffs (EPPs) allege Allergan used sham citizen petitions, fraudulent USPTO statements, baseless patent litigation, and an immunity transfer to the Saint Regis Mohawk Tribe to delay generic entry for Restasis®, maintaining monopoly pricing and causing EPPs to overpay.
- EPPs seek injunctive and declaratory federal relief under the Sherman and Clayton Acts, and state-law monetary damages and consumer-protection relief under various states' laws.
- Allergan moved under Fed. R. Civ. P. 12(b)(6) to dismiss selected state-law antitrust and consumer-protection claims for lack of notice, standing, or failure to plead required elements (e.g., reliance, in-state impact).
- The court evaluates whether broad consumer-protection statutes can encompass monopolization/antitrust theories, whether state procedural prerequisites (e.g., Hawaii AG notice) apply in federal court, and whether indirect purchasers (health/welfare funds) have standing under certain state statutes.
- The court grants some targeted dismissals (Missouri antitrust; Pennsylvania and Vermont consumer-protection claims; ADTPA and VCFA claims limited for post-August 1, 2017 purchases where reliance is required) and otherwise denies Allergan’s motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether broad state consumer-protection statutes give fair notice to plead monopolization-based antitrust claims (Ark., Fla., Haw., Minn., Mo.) | EPPs: single monopolization theory adequately pleads claims under listed statutes; brief clarifies no alternative theories. | Allergan: statutes are broad; complaint fails Rule 8 notice about which subsection/theory is pursued. | Court: Rule 8 satisfied; plaintiffs bound to monopolization theory; claims survive except where addressed on other grounds. |
| Whether Arkansas ADTPA claims require reliance for all purchases (effect of Aug. 1, 2017 amendment) | EPPs: claims based on monopolization establish causation; prior statute required causation but not reliance; amendment not retroactive. | Allergan: amended ADTPA requires individualized reliance for damages after Aug. 1, 2017. | Court: post-August 1, 2017 purchases require reliance → dismissed; pre-amendment claims survive; amendment not retroactive. |
| Whether Hawaii AG notice statute blocks class action in federal court | EPPs: notice requirement applies in state court only; Rule 23 governs federal class actions. | Allergan: failure to notify AG requires dismissal under state law. | Court: Hawaii notice conflicts with Fed. R. Civ. P. 23; under Shady Grove (Stevens concurrence) the provision is procedural and does not apply in federal court → claim survives. |
| Whether certain state consumer-protection statutes require justifiable reliance or consumer standing (PA UTPCPL; VT VCFA; MO MMPA) | EPPs: causal link from monopolization sufficient; EPPs (health/welfare funds) can sue for overcharges. | Allergan: UTPCPL/VCFA require justifiable reliance and consumer status respectively; MMPA limited to purchases for personal, family, household use. | Court: UTPCPL dismissed for failure to plead justifiable reliance; VCFA dismissed for lack of consumer standing; MMPA claim dismissed for lack of standing (funds not purchasers for their own personal/household use). |
Key Cases Cited
- Illinois Brick Co. v. Illinois, 431 U.S. 720 (U.S. 1977) (federal antitrust law bars indirect-purchaser damages claims)
- California v. ARC Am. Corp., 490 U.S. 93 (U.S. 1989) (state antitrust laws permitting indirect-purchaser suits are not preempted by federal law)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard under Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (application of Twombly plausibility standard to complaint facts)
- Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., 559 U.S. 393 (U.S. 2010) (Rule 23 vs. state law limits on class actions; plurality and controlling concurrence analyzed)
- Marks v. United States, 430 U.S. 188 (U.S. 1977) (narrowest-concurrence rule for fragmented Supreme Court decisions)
- Apex Oil Co. v. Jones Stephens Corp., 881 F.3d 658 (8th Cir. 2018) (interpreting causation/reliance under Arkansas ADTPA in deceptive-advertising context)
- Sheet Metal Workers Local 441 Health & Welfare Plan v. GlaxoSmithKline, PLC, 737 F. Supp. 2d 380 (E.D. Pa. 2010) (holding sham litigation/anticompetitive scheme can fall within consumer-protection statutes)
- Hunt v. U.S. Tobacco Co., 538 F.3d 217 (3d Cir. 2008) (Pennsylvania UTPCPL requires justifiable reliance for private standing)