Time Insurance v. Astrazeneca AB
2014 WL 4933025
E.D. Pa.2014Background
- Antitrust action under various state statutes; plaintiffs are health insurance companies paying for Nexium prescriptions.
- Defendants include AstraZeneca (brand Nexium) and three generic manufacturers seeking to produce generics.
- Hatch-Waxman framework incentivizes generic challenges; reverse payments claimed to delay generics.
- Plaintiffs allege reverse-payment settlements kept Nexium prices supra-competitive; compensation mechanisms alleged.
- Suits consolidated in MDL in District of Massachusetts; this action filed in Philadelphia state court and removed to federal court.
- Court grants remand to state court, finding CAFA mass-action and patent-issue questions do not confer federal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal jurisdiction exists over state-law claims | Plaintiffs rely on Actavis-type antitrust analysis without patent invalidation. | Defendants argue patent validity is essential to antitrust claims; removal proper. | Remand granted; no federal question. |
| Whether Actavis allows proving antitrust injury without litigating patent validity | Actavis permits proving anticompetitive conduct without patent litigation. | Damages causation requires patent invalidity or equivalent. | Partial acceptance; plaintiffs may rely on anticompetitive conduct without litigating patent validity. |
| Whether causation of damages can be shown without patent litigation | Antitrust injury can be proven by reduced competition regardless of patent status. | Damages depend on patent invalidity or non-enforceable rights. | Not resolved; court indicates patent issue not essential to all theories. |
| Whether plaintiffs collateral attack consent judgments | No intent to undermine consent orders; claims rely on anticompetitive conduct. | Actions amount to collateral attack on district court consent judgments. | Collateral-attack argument rejected; remand still appropriate. |
| Whether CAFA mass-action removal applies given 90 plaintiffs vs. 30 in related action | Not a mass action; separate actions cannot be joined by defendant motion. | Mass-action removed due to related case; split filings attempt to evade CAFA. | Remand granted; not a mass action under CAFA. |
Key Cases Cited
- Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) (well-pleaded complaint rule; federal question must be on face of complaint)
- Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149 (1908) (federal-question jurisdiction only where well-pleaded; defenses not included)
- Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1 (1983) (federal-question jurisdiction limited; defenses not control removal)
- Christianson v. Colt Industries Operating Corp., 486 U.S. 800 (1988) (patent-law issues must be essential to federal jurisdiction for §1338(a))
- In re Ciprofloxacin Hydrochloride Antitrust Litigation, 166 F. Supp. 2d 740 (E.D.N.Y. 2001) (remand possible where patent issue not essential to all theories)
- In re Tamoxifen Citrate Antitrust Litig., 222 F. Supp. 2d 326 (E.D.N.Y. 2002) (distinguishes cases where patent validity is essential to theory)
- Gunn v. Minton, 133 S. Ct. 1059 (2013) (federal-question jurisdiction must be substantial to matter; patent issue not always substantial)
- Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989) (federal courts have limited role in patent-law setting; respect federal-state balance)