967 F.3d 264
3d Cir.2020Background
- Reckitt (now Indivior) manufactured Suboxone tablets and, as tablet exclusivity neared expiration, introduced a sublingual film with a separate exclusivity period. Generic tablets would not be AB-rated to the film, so substitution laws would not force pharmacists to use generic tablets in place of film.
- Direct purchasers allege Reckitt executed a multifaceted scheme to shift demand to film and suppress generic tablet entry: disparaging tablets, announcing withdrawal for safety reasons, ending tablet rebates in favor of film rebates, raising tablet prices, withdrawing tablets, manipulating the FDA REMS process, and filing a citizen petition.
- Purchasers sued under § 2 of the Sherman Act for unlawful maintenance of monopoly power and sought certification of a class of direct purchasers of branded Suboxone tablets; the District Court certified the class.
- Plaintiffs’ economist (Dr. Russell Lamb) offered an aggregate damages model estimating class-wide overcharges caused by Reckitt’s alleged suppression of generic competition and stated individualized allocations could be made from the same sales data.
- The District Court held common evidence supported proof of a single, multifaceted antitrust scheme and that aggregate damages modeling satisfied Rule 23(b)(3); it also found Burlington an adequate class representative. The Third Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether common questions predominate under Rule 23(b)(3) | Reckitt’s actions taken together suppressed generic competition and class-wide proof can show antitrust injury | Many acts are distinct; showing injury requires individualized proof | Predominance satisfied: court may examine conduct as a whole and common evidence can prove the single scheme and resulting injury |
| Whether plaintiffs’ damages model tracks a viable theory of liability (Comcast challenge) | Model measures aggregate overcharges from the single scheme that prevented generic entry | Model improperly measures harms from separate acts or pricing changes and thus fails Comcast | Comcast distinguishable; plaintiffs advance one cohesive theory (multifaceted scheme) and model measures the resulting class-wide injury |
| Whether an aggregate damages model is permissible despite need for individual allocation | Aggregate model estimates market-wide harm; individualized allocation can follow from common data | Aggregate model insufficient because it doesn't allocate harms to particular purchasers | Aggregate model permissible at certification stage; individualized allocation not fatal to predominance (Modafinil, Tyson cited) |
| Adequacy of class representative (Burlington) | Burlington is informed, produced documents, and monitors the case; will protect class interests | Burlington ceded control to counsel and potential (speculative) conflicts with counsel exist | Burlington adequate: speculative conflicts insufficient; no requirement that a representative "control" litigation |
Key Cases Cited
- FTC v. Actavis, 570 U.S. 136 (2013) (explains ANDA/brand-generic regulatory framework and antitrust implications)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (class certification improper when damages model does not measure damages from the certified theory of liability)
- In re Modafinil Antitrust Litig., 837 F.3d 238 (3d Cir. 2016) (aggregate damages model acceptable where individual allocations can follow and theory is market-wide)
- Marcus v. BMW of N. Am., 687 F.3d 583 (3d Cir. 2012) (framework for assessing predominance under Rule 23(b)(3))
- In re Warfarin Sodium Antitrust Litig., 391 F.3d 516 (3d Cir. 2004) (common evidence that class paid higher prices can satisfy predominance)
- Bonjorno v. Kaiser Aluminum & Chem. Corp., 752 F.2d 802 (3d Cir. 1984) (look to monopolist’s conduct as a whole when evaluating unlawful maintenance of monopoly)
- Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) (class action may be proper even when individualized damages issues remain)
- In re Suboxone (Class Certification), 421 F. Supp. 3d 12 (E.D. Pa. 2019) (district court opinion certifying the Suboxone direct-purchaser class)