OPINION
Plaintiff-appellant Mylan Laboratories, Inc. (“Mylan”) has appealed the dismissal of its Third Amended Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). The district court dismissed all of Mylan’s claims with prejudice.
On appeal, Mylan has maintained that its Third Amended Complaint was sufficient to survive the Rule 12(b)(6) stage. Specifically, Mylan has asserted that it properly alleged numerous violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., several claims for damages for false advertising un
Mylan is a corporation engaged in developing, manufacturing, and distributing prescription and generic drugs. In 1989, it filed suit against several manufacturers involved either directly or through a subsidiary in the generic drug industry, various officers of those corporations, and several employees of the Food and Drug Administration (“FDA”). Mylan originally filed its suit in the United States District Court for the District of Columbia; however, in March 1990, Judge Thomas F. Hogan, finding venue to be improper, transferred the case to the District of Maryland. Shortly thereafter, Mylan completed its first round of amendments to its complaint. The First Amended Complaint charged the defendants with numerous antitrust violations, violations of RICO, and violations of state law for unfair business competition and tortious interference with prospective business relations. Mylan essentially claimed that between 1984 and 1989, the defendants conspired to facilitate and did facilitate fraudulent FDA approval of their abbreviated new drug applications (“AN-DAs”) for generic drugs.
Upon review of a motion to dismiss the First Amended Complaint, Judge Norman P. Ramsey of the United States District Court for the District of Maryland dismissed against all of the defendants Mylan’s antitrust claims and Count 3, a RICO claim premised on a theory of a single conspiracy or joint action among all of the defendants in violation of 18 U.S.C. § 1962(d). In ruling on the legal sufficiency of the remaining RICO counts, Judge Ramsey considered Mylan’s pleadings of predicate acts, which included allegations of bribery, obstruction of justice, and mail and wire fraud. He concluded that one of Mylan’s theories of mail and wire fraud was legally insufficient and that the other was not pleaded with enough particularity under Federal Rule of Civil Procedure 9(b). Judge Ramsey then dismissed Count 1, arising under RICO, 18 U.S.C. § 1962(c), against only American Home Products Corp. (“AHP”), Quantum Pharmics, Ltd. (“Quantum”), and Jin-Shung Chang on the grounds that Mylan had failed to show a pattern of racketeering activity. He also dismissed Count 2, arising under RICO, 18 U.S.C. § 1962(a), against individual defendants Raj Matkari, Ashok Patel, Dilip Shah, Raju Vegesna, as well as against Jin-Shung Chang and corporate defendants AHP and Quantum. Judge Ramsey completed his review by sustaining, as against all of the defendants, Mylan’s state-law claims. See Mylan Lab., Inc. v. Alezo, N.V.,
Mylan then moved to file a Second Amended Complaint. The new complaint contained substantial alterations, including additions of new claims and new allegations, as well as numerous deletions. Judge Ramsey, however, denied without prejudice Mylan’s motion to amend on the grounds that Mylan had failed to comply with Local Rule 103.6.C which requires highlighting of all amendments. The record, the Judge noted in his ruling, had become “confused virtually beyond analysis by the proposed second amended complaint.” In short, the highlighting of all changes to the complaint was essential for the case to proceed properly. Mylan promptly submitted a corrected complaint and a revised Motion to Amend.
Shortly thereafter, Judge Ramsey left the bench, and the case was transferred to Judge Frederic N. Smalkin of the United States District Court for the District of Maryland. Before granting Mylan’s revised motion to
The most recent and substantially downsized complaint contains four counts.' The complaint lists as defendants seven corporations: Pharmaceutical Basics, Inc. (“PBI”), Par Pharmaceutical, Inc. (“PAR”), a Par subsidiary, Quad Pharmaceuticals, Inc. (“Quad”), American Therapeutics, Inc. (“ATI”), Vita-rine Pharmaceuticals, Inc. (“Vitarine”), Quantum, and Quantum’s parent, AHP. In addition, the complaint lists various individual defendants, including persons who are or were at all relevant times officers of the defendant corporations or FDA employees. Counts 1 and 2 assert violations of RICO essentially consonant with those Judge Ramsey had ruled in favor of allowing to proceed. Specifically, Count 1 alleges a violation by all defendants of 18 U.S.C. § 1962(c).
With respect to Counts 1 and 2 (the RICO counts) and Count 4 (the state law claim), it is true that Mylan has kept in its Third Amended Complaint general language that suggests some claim of a joint or “global” conspiracy among all of the defendants to commit a single pattern of racketeering activity. Judge Ramsey already had ruled, and Judge Smalkin agreed, that a claim of a global action among all of the defendants was not supported by Mylan’s allegations. Perhaps the global conspiracy language which remains in the third version of the complaint was the result of less-than-careful draftsmanship. The language also could be read as a highly simplistic and inartful attempt to provide the court, in so many words, with a general overview to a complex set of circumstances involving numerous defendants. Nevertheless, the complaint also contains numerous factual allegations of separate patterns of racketeering activity committed by various groups of defendants. Although agreeing that the global conspiracy, standing alone, would be insufficient, we are reluctant, at the relatively early Rule 12(b)(6) stage, to affirm the entire dismissal of Mylan’s RICO and common law claims for failure to state a claim on the basis of the misleading additional language concerning joint activity. Accordingly, we reverse the decision to dismiss Counts 1, 2, and 4. We caution, however, that a claim held not dismissible at the Rule 12(b)(6) level must eventually still be proven.
We review a district court’s dismissal under Rule 12(b)(6) de novo. See, e.g., Schatz v. Rosenberg,
II. RICO Claims (Counts 1 and 2) and State-Law Claims of Unfair Competition and Tortious Interference with Business Relations (Count I)
The primary problem identified by Judge Smalkin with Mylan’s two RICO counts and its state-law claims essentially boils down to the following allegation appearing in the beginning of Count 1:
The racketeering acts committed by each of the defendants identified below were related to one another and formed a pattern of racketeering activity in that they were in furtherance of the common goals of profiting illegally at Mylan’s expense and were focused upon undermining the integrity of the FDA approval process in order to improperly obtain economic advantage.
Third Am.Compl. ¶ 114. That statement, or more accurately, that “theme,” was either repeated or incorporated by reference into Counts 2 and 4. The district court and the defendants have convincingly demonstrated that not one of the extensive allegations described in Mylan’s complaint supports any claim that all of the defendants acted together, in a single, global pattern of racketeering activity, driven by the united goal of profiting illegally at Mylan’s expense.
In his opinion dismissing substantial portions of Mylan’s First Amended Complaint, Judge Ramsey specifically rejected Mylan’s theory of a “global conspiracy” among the various defendants. Mylan, he concluded, had failed to present any sufficient allegations to support such a claim. Mylan,
Judge Smalkin quite plainly agreed with Judge Ramsey’s conclusion that Mylan had not adequately pleaded a global conspiracy. He concluded, moreover, that Mylan, in its Third Amended Complaint, had continued to assert the same unsupported claim:
Although Mylan does not use the expression “global conspiracy” in its complaint, it clearly asserts that the racketeering acts of the defendants were related, and that*1135 they formed a pattern of racketeering activity. This is, in effect, an assertion that some form of global pattern of action existed, in which all of the defendants participated, Mylan’s protestations [in its supporting memoranda] to the contrary notwithstanding.
Mylan Lab., Inc. v. Pharmaceutical Basics, Inc.,
However, several separate patterns of racketeering activity or, in the words of the Third Amended Complaint, “series of schemes” can be gleaned from the allegations of Counts 1, 2, and 4. In dismissing with prejudice the RICO counts and the state-law claims, Judge Smalkin overlooked the viability of the three counts independent of any global action pleading. In short, although the complaint does not support a claim of a global pattern among all of the defendants, it nevertheless, when read in a light most favorable to the plaintiff, sets forth separate patterns of racketeering acts committed by various groups of defendants. What these separate patterns have in common, it appears from the complaint, is the similar objective of expediting the ANDA approval process for self gain.
It must be remembered that Judge Ramsey, when reviewing the First Amended Complaint, dismissed only one RICO count in its entirety. He did not dismiss either the state law claims or, as against some of the defendants, the two counts alleging violations of RICO, 18 U.S.C. §§ 1962(a) and (c). Although we can appreciate Judge Smalkin’s position that an extremely complex case with a great divide between pleading and proof has lived long enough, we find that Judge Ramsey’s analysis at the Rule 12(b)(6) stage, dealing essentially with pleading, not proof, accorded best with the authorities.
As Judge Ramsey properly noted, to state a claim under RICO, Mylan was required to allege a “pattern of racketeering.” The statute requires “at least two instances” of racketeering activity. 18 U.S.C. § 1961(5). “Racketeering activity” is defined in 18 U.S.C. § 1961(1) and includes, inter alia, bribery, mail and wire fraud, and obstruction of justice. Further, a “pattern” requires a showing of a relationship between the predicate acts and a threat of continuing activity. H.J. Inc. v. Northwestern Bell Tel. Co.,
Mylan had alleged in the First Amended Complaint and continues to do so in the third version thereof as predicate acts for the RICO counts bribery, mail and wire fraud, and obstruction of justice. Judge Ramsey first concluded, and we do not disagree, that for the purposes of Rule 12(b)(6) Mylan had sufficiently alleged the predicate acts of bribery and obstruction of justice.
Finally, Judge Ramsey also concluded that Mylan had sufficiently alleged the elements of the state law torts of unfair competition and malicious interference with business relations. Once again, although the incorporation by reference into Count 4 of the theme of global action is in error, it is not fatal to Mylan’s state law claims. We agree with Judge Ramsey’s conclusions and sustain Count 4 of Mylan’s Third Amended Complaint.
We recognize, as did Judge Smalkin, the error of retaining the language of a “joint conspiracy” or “global pattern” of racketeering. Despite the faulty draftsmanship, however, Mylan has again essentially set forth in Counts 1, 2, and 4, a “series of schemes” or separate patterns of racketeering involving generally a corporate defendant, its employees, and FDA defendants. See, e.g., Mylan,
III. Mail and wire fraud claims as predicate acts for the RICO counts
In its First and Third Amended Complaints, Mylan has alleged as predicate acts for the RICO counts mail and wire fraud claims. On appeal Mylan raises again the question of the sufficiency of those allegations for the purposes of Rule 12(b)(6). In its First Amended Complaint, Mylan set forth at least two theories of mail and wire fraud. First, Mylan primarily contended that the predicate acts of mail and wire fraud were committed when a defendant mailed to
Judge Ramsey dismissed that theory of mail and wire fraud on the grounds that it was legally insufficient. Specifically, he first concluded that ANDAs in the hands of the government and awaiting approval were not “property” within the meaning of the mail fraud statute: “[T]he FDA cannot have been defrauded of its ANDA approvals within the meaning of the federal mail and wire fraud statutes. Accordingly, to the extent that Mylan’s allegations of mail and wire fraud rely on this theory they must be dismissed.” Mylan,
However, in the First Amended Complaint Mylan also alleged as further support for the predicate acts of mail and wire fraud that, in conjunction with improperly approving the corporate defendants’ ANDAs, the FDA defendants also mailed deficiency letters to My-lan requesting unwarranted and unjustifiable data in order to delay approval of Mylan’s ANDAs and also mailed to the corporate defendants confidential information submitted by Mylan in order further to facilitate the approval of their ANDAs. See First Am. Compl. ¶ 103(D) and (E). Judge Ramsey, however, also dismissed those allegations. In short, he found the allegations of fraud to be overbroad and conclusory and struck the applicable portions of the complaint pursuant to Federal Rule of Civil Procedure 9(b), which requires that circumstances constituting fraud shall be stated with particularity.
Given the facts as alleged in the instant ease, we affirm a ruling that precludes Mylan from relying on, as its sole basis for the predicate acts in its RICO counts, the theory that the FDA was defrauded out of its ANDA approvals within the meaning of the mail and wire fraud statutes. However, My-lan, in its Third Amended Complaint has altered its allegations of mail and wire fraud. Specifically, the Third Amended Complaint contains new allegations of the fraudulent use of the mails against Mylan by defendants AHP, Quantum, Vitarine, and their employees. The changes were made, Mylan has contended, to comply with all of Judge Ramsey’s rulings with respect to the mail and wire fraud claims and to clarify that it was both deceived and injured by the defendants acts. Thus, Mylan asserts, the Third Amended Complaint no longer seeks to rely solely on the fraudulent submission of AN-DAs to the FDA and states with more particularity the remaining allegations of mail and wire fraud. Because Judge Smalkin dismissed the RICO counts for their continued use of the global conspiracy language, he did not consider the sufficiency of the “new” predicate acts alleged in support of the RICO claims. In light of our decision in Part II to sustain the RICO counts, we decline to address the mail and wire fraud allegations and remit the issue to the district court and also grant to the parties an opportunity to consider further and, perhaps, to flesh out the new allegations on remand.
IV. Count 3 — Lanham Act Claim
Count 3 of Mylan’s Third Amended Complaint introduces a new claim, namely that defendants AHP, Quantum, PBI, and Par each violated § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), by making false and misleading advertisements and representations about their generic drug products. Mylan maintains that its complaint properly alleges that each of the defendants’ package inserts, brochures, and other advertisements violated § 43(a) of the Lanham Act because they falsely represented or implied (1) that the defendants’ drugs had been properly approved by the FDA and (2) that the defen
In order to constitute a violation of § 43(a) of the Lanham Act, the contested statement or representation must be either false on its face or, although literally true, likely to mislead and to confuse consumers given the merchandising context. See, e.g., Castrol Inc. v. Pennzoil Co.,
Judge Smalkin dismissed Mylan’s Lanham Act claims on the grounds that the complaint failed to allege specifically that the defendants’ drugs were not in fact bioequiva-lent. The failure to allege non-bioequiva-lence, he concluded, was fatal to Mylan’s claim. Judge Smalkin correctly noted that, in order ultimately to succeed on its Lanham Act count, Mylan will have to show more evidence than mere proof that the defendants’ claims were supported by unpersuasive test results. “Rather the plaintiff must demonstrate that such tests are ‘not sufficiently reliable to• permit one to conclude with reasonable certainty that they established’ the claim made.” McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co.,
Mylan, in short, is not empowered to enforce independently the FDCA. Cf Sandoz,
V. Dismissal with Prejudice
In light of our rulings with respect to the four counts of Mylan’s Third Amended Complaint, we need not address whether Judge Smalkin abused his discretion in dismissing with prejudice Mylan’s complaint and in refusing to permit further amendments. We agree with Judge Smalkin, however, that the case has remained extremely long in the pleading stage, and we expect the case to proceed -with no further motions to amend (other than one designed to comply with a suggestion herein). See, e.g., Foman v. Davis,
VI. Defendants Raju Vegesna and Jim-Shung Chang
Mylan also has requested that the indefinite suspension of litigation against defendant Raju Vegesna, a former ATI executive, be lifted and that the service of process on defendant Jin-Shung Chang, former executive at Quantum, be deemed effective. Ap-pellees AHP and Quantum have taken no position on the two issues.
Defendant Vegesna has disappeared and is no longer' represented by counsel. He apparently pleaded guilty to two counts of interstate travel in aid of racketeering based on the conduct alleged in the instant case, had been served, and had retained counsel. In May 1992, Judge Ramsey declined to lift
Mylan has requested that the panel lift the indefinite suspension of proceedings so that it can continue to prosecute its claims against Vegesna. According to Mylan, Vegesna should suffer a default judgment as a result of his disappearance. Because we have reversed the dismissal with prejudice and because it has been roughly a year or more since the district court last ruled on the issue, the district court should be approached by Mylan and requested to reconsider the facts and the propriety of the suspension of proceedings as to defendant Vegesna.
Defendant Chang also was indicted for illegal conduct, but he, too, left the jurisdiction. According to Mylan, it repeatedly attempted to serve Chang at his last known address and also at a closing of his New York residence. At the closing, Mylan attempted to serve the papers on Mrs. Chang, but Mrs. Chang refused to take them. Judge Ramsey did not accept Mylan’s acts as proper service. At the time of Judge Ramsey’s ruling, it was believed that Chang was in Taiwan. The question of Chang’s current whereabouts, if known, and the propriety of service of process in light of any developing circumstances add up to questions of fact which should be taken up by the parties with the district court.
The judgment is
REVERSED.
Notes
. No generic drug may be marketed without FDA approval of an ANDA. The approval process for ANDAs is designed to occur on a "first-in, first-out basis, ‘i.e., the first ANDA submitted to the FDA which satisfactorily passed the labeling, bio-equivalency, and chemistry reviews would receive the first approval for a particular generic drug.’ ” Mylan Lab., Inc. v. Alezo, N.V.,
. Section 1962(c) states:
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.
. Section 1962(a) states in pertinent part:
It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal within the meaning of section 2, title 18, United States Code, to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce....
. In light of the standard of review, we traditionally have viewed even poorly drafted complaints in a light most favorable to the plaintiff:
[The] complaint, to say the least, was inartfully drafted.... In our view, however, a rule 12(b)(6) motion should be granted only in very limited circumstances. The Supreme Court has explained that "[t]he Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits.” ... We have long held "that a motion to dismiss for failure to state a claim for relief should not be granted unless it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of his claim.”
Rogers v. Jefferson-Pilot Life Ins. Co.,
. Accordingly, Judge Ramsey dismissed the antitrust counts (Counts 440) and Count 3, Mylan's claim under RICO, 18 U.S.C. § 1962(d), of the First Amended Complaint. Those counts had been predicated upon the theory of a global conspiracy among the defendants.
. He ruled, however, that Mylan's claims of mail and wire fraud were insufficient. See infra Part III.
. Indeed, as Judge Smalkin noted in his ruling, such attribution clearly would have been improper in light of Judge Ramsey’s ruling that there had been insufficient allegations to support a global conspiracy theory. Judge Ramsey instead "attributed the acts of the various agents to their corporate manufacturer employers” for the purposes of examining Mylan’s showing of a "pattern.” Id. at 1077.
. Appellees AHP and Quantum correctly observe that Judge Ramsey did not sustain against them any RICO claims set forth in the First Amended Complaint. Count 3, of course, was premised on the global conspiracy theory and thus was dismissed against all of the defendants. As to Counts 1 and 2, however, Judge Ramsey found that Mylan had failed to show a pattern of racketeering by AHP and Quantum:
Quantum's employee J. Chang is alleged to have made a single $300 payment to Brancato. No other predicate acts are alleged.... [T]his Court holds that the single payment alleged cannot as a matter of law constitute a RICO pattern no matter how many statutes it violated. Accordingly, Mylan's RICO claims against AHP, Quantum and J. Chang must be dismissed for lack of a pattern of racketeering activity.
Mylan,
In its Third Amended Complaint, however, My-lan has added to its allegations of bribery with respect to defendants AHP, Quantum, and J. Chang. See Third Am.Compl. ¶ 114(A)(11). The allegations include the single $300 cash payment and five meals between 1986 and 1988. The meals, according to the complaint, largely were concentrated over a period of six months at the end of 1987, through the beginning of 1988. In support of the sufficiency of its new allegations, Mylan points out that, with respect to defendants Akzo, PBI, and Matkari, Judge Ramsey found a sufficient "pattern” of racketeering activity based on similar allegations. The allegations found sufficient consisted of a single monetary payment to an FDA employee and several paid meals. Thus, Mylan concludes, the RICO counts should be sustained against AHP, Quantum, and J. Chang because the new allegations of bribery sufficiently show a "pattern” of racketeering activity that is consistent with Judge Ramsey's rulings.
In light of the additions to the allegations, and in keeping with the overall tenor of Judge Ramsey’s rulings with respect to the rest of the defendants, we find that the new allegations of bribery are sufficient for now to demonstrate a "pattern of racketeering activity.” Thus, the RICO counts of the Third Amended Complaint must, at the Rule 12(b)(6) level, be sustained as against defendants AHP, Quantum, and Jin-Shung Chang.
. Mylan also has contended on appeal that its complaint further states that the defendants' advertising was false and misleading because the defendants "omitted to state the obviously material fact that the FDA's approval for [the] defendants’ generic drugs was obtained by fraud.” Mylan’s contention is unpersuasive, however, because there simply are no allegations of "material omissions” in the complaint. Accordingly, even if these "omissions” created a cause of action under the Lanham Act—a matter hotly disputed by the appellees—it has no bearing in the instant case in light of the failure to plead such a claim.
. According to the complaint, an "AB” rating indicates that the drug is considered to be "therapeutically equivalent” to the innovator drug. See, e.g., Third Am.Complt. ¶ 138.
. In 1988, Congress amended § 43(a) of the Lanham Act. Trademark Law Revision Act of 1988, Pub.L. No. 100-667, tit. I, § 132, 102 Stat. 3946 (codified at 15 U.S.C. § 1125(a)). Our analysis of whether Mylan properly stated a claim for relief under § 43(a) is the same under both the former and the amended version of the section. Nothing in the amended § 43(a), which became effective in November 1989, alters the requirement that the plaintiff ultimately must prove that the contested statements or representations were false or misleading. In fact, according to the legislative history, the amendments largely codified the interpretation of § 43(a) that had been given by numerous courts. See S.Rep. No. 515, 100th Cong., 2d Sess. 40, reprinted in 1988 U.S.C.C.A.N. 5577, 5603.
In its opinion, the district court determined that the amended version of § 43(a) should apply