Genus Lifesciences, Inc. v. Azar

GENUS LIFESCIENCES, INC., Plaintiff, v. ALEX M. AZAR II, et al., Defendants,LANNETT CO., INC., Intervenor-Defendant.

Case No. 1:20-cv-00211 (TNM)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

January 27, 2021

MEMORANDUM ORDER

The Court granted partial summary judgment to Plaintiff Genus Lifesciences, Inc. ("Genus") on Count III of its Complaint and deferred ruling on Counts I and II. See Order, ECF No. 64. At a telephonic status conference, the Court ordered the parties to brief the appropriate remedy for Count III and scheduled briefing on motions for reconsideration proposed by the Federal Defendants ("FDA") and Intervenor-Defendant Lannett Company, Inc. ("Lannett"). See Docket Entry dated October 7, 2020. Now ripe are Motions for Reconsideration filed by FDA and Lannett (collectively, the "Defendants"), Genus's Motion to Vacate FDA's approval of Lannett's drug product Numbrino, and Genus's Motion to Supplement the Record.

I.

First up is Genus's Motion to Complete the Administrative Record. Genus seeks to add documents obtained in a related FOIA action. See Latham & Watkins LLP v. FDA, No. 1:20-cv-0509-TNM (D.D.C.). Specifically, Genus requests that the Court order FDA to add to the administrative record 33 pages of email communications that Genus claims are relevant to FDA's approval of Numbrino and should have appeared in the record that FDA compiled. See Pl. Genus Lifesciences, Inc.'s Mot. to Compete the Admin. R. ("Genus Record Br.") at 8, ECF No. 54.¹ Genus also asks the Court to review in camera unredacted versions of the documents to determine whether the redactions were proper. Id. at 28. FDA counters that Genus has failed to rebut the strong presumption that the record was complete, and it contends that the documents contain information that is immaterial or cumulative of material that appears elsewhere in the record. See Federal Defs.' Resp. in Opp'n to Pl. Genus Lifesciences, Inc.'s Mot. to Complete the Admin. R. ("FDA Record Br.") at 12-22, ECF No. 58. FDA also maintains that in camera review would be unnecessary and inappropriate. Id. at 22-25.

To be sure, the record produced by an agency in an APA challenge "is entitled to a strong presumption of regularity." Univ. of Colorado Health at Mem'l Hosp. v. Burwell, 151 F. Supp. 3d 1, 13 (D.D.C. 2015). So "a plaintiff must do more than simply assert that [missing] materials were relevant or were before an agency when it made its decision," as it "must identify reasonable, non-speculative grounds for its belief that the [missing] documents were considered by the agency." Id. (cleaned up). What the agency "considered" extends to "all information it considered either directly or indirectly." Stand Up for California! v. U.S. Dep't of Interior, 315 F. Supp. 3d 289, 293 (D.D.C. 2018). "The goal, ultimately, is for the Court to have before it a record that delineates the path by which the agency reached its decision." Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, No. CV 16-1534 (JEB), 2019 WL 2028709, at *2 (D.D.C. May 8, 2019) (cleaned up). So the complete record should cover "any document that might have influenced the agency's decision and not merely those documents the agency expressly relied on in reaching its final determination." Id. (cleaned up).

Genus has met its burden. It does not rely on pure conjecture, as it seeks to add 33 specific pages out of the thousands of pages obtained in the FOIA action. See Genus Record Br. at 8; cf. Stand Up for California!, 315 F. Supp. 3d at 295 (rejecting motion to supplement the record that relied on "speculation that other documents may exist"). Genus also distinguishes three categories of documents, sufficiently explaining the import of each and how the communications played a role in FDA's decision. See id. at 15-28. In so finding, the Court does not necessarily adopt Genus's interpretation of every communication in every document; FDA is free to contest and contextualize the contents in future briefing. But Genus has made a reasonable, non-speculative showing that the documents were considered by FDA yet not included in the record. See id.

The documents mainly contain communications among relevant FDA personnel. While internal email communications about FDA application timelines would typically fall outside an administrative record, the relative timelines of these drug applications had outsized implications and are critical to resolving the unique claims in this case. More, when the documents include "deliberative" communications unsuitable for an administrative record, FDA has already had a chance to redact those portions. See Stand Up for California!, 315 F. Supp. 3d at 293 (noting that intra-agency deliberative documents are usually privileged). The unredacted portions at the very least clarify when FDA officials were confronting decisions about Lannett's application that Genus now challenges. And they help "delineate[] the path by which the agency reached its decision." Standing Rock Sioux Tribe, 2019 WL 2028709, at *2. FDA should supplement the record with the 33 pages that Genus attached to its motion. See Genus Record Br. at Exs. A, B, and C, ECF Nos. 54-2, 54-3, 54-4.

As for in camera review, the Court does not find it necessary now to review any of the redacted material. See DeFraia v. CIA, 311 F. Supp. 3d 42, 50 (D.D.C. 2018) ("the mere possibility of" erroneous redaction "does not warrant in camera review").

II.

Next up are the Motions for Reconsideration. FDA and Lannett both seek reconsideration of the Court's decision under Federal Rule of Civil Procedure 54(b). See Intervenor-Def. Lannett Co., Inc.'s Mot. for Recons. and Opp'n to Mot. for Vacatur ("Lannett Mot.") at 6, ECF No. 67; Federal Defs.' Mem in Support of their Mot. for Recons. and in Opp'n to Pl.'s Mot. to Vacate ("FDA (Mot.") at 7, ECF No. 70-1. Courts may grant reconsideration "as justice requires," considering "whether the court 'patently' misunderstood a party, made a decision beyond the adversarial issues presented to the court, made an error in failing to consider controlling decisions or data, or whether a controlling or significant change in the law or facts has occurred since the submission of the issue to the Court." Youssef v. Holder, 62 F. Supp. 3d 96, 98 (D.D.C. 2014) (citation omitted). This is a discretionary matter. The Court may reverse course even if the appropriate legal standard is unmet but "there are other good reasons for doing so." Id. at 99.

The Defendants suggest that the Court's ruling went beyond the adversarial issues presented when it concluded that FDA erred by not requiring Lannett to submit a patent certification with its drug application and not considering the associated timelines for approval. See Lannett Mot. at 6; FDA Mot. at 7; see also Genus Lifesciences, Inc. v. Azar, No. 1:20-CV-00211 (TNM), 2020 WL 5530218, at *10-13 (D.D.C. Sept. 15, 2020). Even if this were true, the Court had requested supplemental briefing on this point. It ordered the parties to address "whether Romanette ii requires the FDA to approve Lannett's application within the timeframesprescribed in 21 U.S.C. § 355(c)(3)." Order at 5-6, ECF No. 53. That obligation stems from the timelines applicable to Section 505(b) applications with patent certifications. So that inquiry included the question of if Lannett's application did have or should have had a patent certification. Lannett recognized as much, explaining in its supplemental brief why it believed that Lannett did not have to submit a patent certification. See Intervenor-Def. Lannett Company, Inc.'s Supplemental Br. in Support of Cross-Motion for Summary Judgment at 4, ECF No. 55. FDA's brief focused instead on the ramifications of Lannett's application not containing a certification. See Federal Defs.' Supplemental Br. at 5, ECF No. 56. The Defendants may now wish that they had made more "fulsome" arguments on whether a patent certification was required, see Lannett Mot. at 6, but this was not for lack of opportunity.²

In any event, the Defendants' latest motions do not sway the Court. The plain text of the statute states that every Section 505(b)(2) application "shall also include" a patent certification. 21 U.S.C. § 355(b)(2)(A). FDA's regulations emanating from this statute confirm that the certification is mandatory. See 21 C.F.R. § 314.50(i)(1) ("A 505(b)(2) application is required to contain the following: . . . "). An applicant who believes that there are no relevant patents must submit a certification with specific language to that effect. See § 314.50(i)(1)(ii). FDA's novel arguments to the contrary require the Court to interpret the word "drug" as meaning a "drug product" and not also a "drug substance," and that the statute meant to refer only to a "listed drug"—that is, a drug product already approved by FDA and appearing in its "Orange Book."FDA Mot. at 8-14; Lannett Mot. at 6-7. Of course, Congress did not use those words. See 21 U.S.C. § 355(b)(2).

More, this interpretation is still at odds with the most relevant portions of FDA's own regulations. Section 314.50(i) directs applicants to submit certifications for "the drug substance or drug product" that were the subject of investigations relied on by the applicant. And it states without qualification that when the applicant believes that "there are no patents described in paragraph (i)(1)," an application must contain a "no relevant patents" certification.³ 21 C.F.R. § 314.50(i)(1)(ii). The Court does not regret its conclusion that "FDA takes a position so clearly in opposition to its regulations," and that FDA erred. Genus Lifesciences, 2020 WL 5530218, at *11.

The Defendants also assert that the Court should reconsider its ruling on Count III because any error by FDA was harmless. Lannett Mot. at 5; FDA Mot. at 9-10. The Administrative Procedure Act directs reviewing courts to take "due account . . . of the rule of prejudicial error." 5 U.S.C. § 706; see PDK Labs. Inc. v. DEA, ...