In re Nexium (Esomeprazole) Antitrust Litig.

42 F.Supp.3d 231

In re NEXIUM (ESOMEPRAZOLE) ANTITRUST LITIGATION.

Civil Action No. 12–md–02409–WGY.

United States District Court, D. Massachusetts.

Signed Sept. 4, 2014.

Nicole M. Acchione, Lisa J. Rodriguez, Trujillo Rodriguez & Richards, LLP, Haddonfield, NJ, Peter A. Barile, III, Bradley J. Demuth, Linda P. Nussbaum, Grant & Eisenhofer, P.A., Donald A. Broggi, Joseph P. Guglielmo, Scott & Scott LLP, George Farah, J. Douglas Richards, Sharon K. Robertson, Cohen Milstein Sellers & Toll PLLC, New York, NY, Natalie Finkelman Bennett, Shepherd, Finkelman, Miller & Shah, LLP, Media, PA, John P. Bjork, David P. Germaine, Vanek Vickers & Masini PC, Justin N. Boley, Bethany R. Turke, Edward A. Wallace, Kenneth A. Wexler, Wexler Wallace LLP, Chicago, IL, Christopher M. Burke, Walter W. Noss, Scott & Scott LLP, San Diego, CA, James E. Cecchi, Lindsey H. Taylor, Carella Byrne Cecchi Olstein Brody & Agnello, P.C., Roseland, NJ, Kimberly A. Dougherty, Janet Jenner & Suggs, LLC, Jonathan Shapiro, Stern, Shapiro, Weissberg & Garin, Boston, MA, Anne K. Fornecker, Hilliard & Shadowen LLC, Austin, TX, Daniel C. Girard, Christina C. Sharp, Girard Gibbs & DeBartolomeo LLP, San Francisco, CA, Jayne A. Goldstein, Pomerantz LLP, Weston, FL, Aaron D. Kaufmann, Leonard Carder LLP, Oakland, CA, Christopher Lometti, Cohen Milstein Sellers & Toll PLLC, Washington, DC, Brian D. Penny, Goldman Scarlato Karon & Penny PC, Wayne, PA, Kevin P. Roddy, Wilentz, Goldman & Spitzer PA, Woodbridge, NJ, Steve D. Shadowen, Hilliard & Shadowen LLC, Mechanicsburg, PA, for Plaintiffs.

Erin Gibson Allen, Moira E. Cain–Mannix, Brian C. Hill, Scott D. Livingston, Bernard D. Marcus, Jonathan D. Marcus, James F. Rosenberg, Marcus & Shapira LLP, Pittsburgh, PA, Virginia E. Anello, Michael A. London, Douglas & London, P.C., Brian D. Brooks, Smith Segura & Raphael LLP, Ephraim R. Gerstein, Garwin Gerstein & Fisher LLP, Michael Aaron Rose, Frank R. Schirripa, Hach Rose Schirripa & Cheverie, LLP, Archana Tamoshunas, Taus, Cebulash & Landau, LLP, New York, NY, Don Barrett, Barrett Law Office, Lexington, MS, Eric L. Bloom, Monica L. Rebuck, Hangley Aronchick Segal Pudlin & Schiller, Harrisburg, PA, Russell A. Chorush, Heim Payne & Chorush LLP, Houston, TX, Eric L. Cramer, Daniel C. Simons, Yechiel Michael Twersky, Nicholas Urban, Berger & Montague PC, Barry L. Refsin, Hangley, Aronghick, Segal, Pudlin & Schiller, Philadelphia, PA, James R. Dugan, II, David B. Franco, Douglas R. Plymale, The Dugan Law Firm, New Orleans, LA, Peter Kohn, Joseph T. Lukens, Faruqi & Faruqi LLP, Jenkintown, PA, David S. Nalven, Kristen Johnson Parker, Andrew J. Vasicek, Hagens Berman Sobol Shapiro LLP, Cambridge, MA, Anna T. Neill, Douglas H. Patton, Scott E. Perwin, Lauren C. Ravkind, Kenny Nachwalter, P.A., Miami, FL, Peter S. Pearlman, Cohn, Lifland, Pearlman, Herrmann & Knopf, Saddle Brook, NJ, John D. Radice, Radice Law Firm, PC, Long Beach, NJ, Susan C. Segura, Smith Segura & Raphael, LLP, Alexandria, LA, Thomas G. Shapiro, Shapiro Haber & Urmy LLP, Boston, MA, for Consolidated Plaintiffs.

Caitlin G. Coslett, David F. Sorensen, Berger & Montague PC, Philadelphia, PA, Glen DeValerio, Nathaniel L. Orenstein, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, Donna M. Evans, Thomas M. Sobol, Hagens Berman Sobol Shapiro LLP, Cambridge, MA, for Consolidated Plaintiffs and Plaintiffs.

Bruce E. Gerstein, Joseph Opper, Elena Chan, Garwin, Bronzaft, Gerstein & Fisher, New York, NY, for Consolidated Plaintiffs, Interested Parties and Plaintiffs.

Nicholas W. Allen, William A. Zucker, McCarter & English, LLP, Michael Thomas Marcucci, Jones Day, Laurence A. Schoen, Adam L. Sisitsky, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, Boston, MA, Sarah Choi, Lisa Jose Fales, Danielle R. Foley, James Douglas Baldridge, Venable LLP, Thea Cohen, Katie Einspanier, Christopher M. Jackson, Rebecca A. Koch, Karen N. Walker, Kirkland & Ellis LLP, Stanley E. Fisher, Paul B. Gaffney, Benjamin M. Greenblum, Heidi K. Hubbard, John E. Joiner, Dane H. Butswinkas, Jonathan B. Pitt, John E. Schmidtlein, Kannon K. Shanmugam, James H. Weingarten, Marcie R. Ziegler, Williams & Connolly LLP, Courtney R. Forrest, Jonathan Gimblett, Timothy C. Hester, Thomas A. Isaacson, Andrew D. Lazerow, Enrique D. Longton, Ashley E. Bass, Evie Spanos, Einar Stole, Covington & Burling LLP, John M. Gore, Kevin D. McDonald, Jonathan B. Berman, Stephanie L. Resnik, Jones Day, Washington, DC, Ajay Kayal, Ellen T. Lowenthal, Andrew J. Miller, Budd Larner PC, Short Hills, NJ, Michael P. Kelly, McCarter & English LLP, Wilmington, DE, Jay P. Lefkowitz, Kirkland & Ellis LLP, Alan H. Pollack, Hopgood, Calimafde, Kalil, Blaustein & Judlowe, New York, NY, Leslie F. Su, Minerva Law, P.C., Andover, MA, for Defendants.

Donald W. Myers, Buchanan Ingersoll & Rooney PC, Philadelphia, PA, for Intervenor Plaintiff.

Nicholas S. Napolitan, Morrison & Foerster LLP, San Francisco, CA, for Interested Party.

Michael J. Rossi, Conn, Kavanaugh, Rosenthal, Peisch & Ford, LLP, Boston, MA, Robert J. Tucker, BakerHostetler, Columbus, OH, for Intervenors.

MEMORANDUM AND ORDER

YOUNG, District Judge.

I. INTRODUCTION

This case, arising under the federal antitrust laws and state analogues, presents a challenge to the use of reverse payment settlements in patent litigation. Reverse payment settlements are agreements to settle patent infringement litigation under which the patent holder pays the claimed infringer handsomely to refrain from competing with the patent holder until the patent or patents in suit expire. The arrangement preserves the patent holder's monopoly and the full term of its patents, while compensating the claimed infringer with at least some of the money it would have earned had it successfully challenged the patents. In a key ruling last year, the Supreme Court held that these kinds of “pay for delay” agreements can, under certain circumstances, violate the federal antitrust laws. Federal Trade Comm'n v. Actavis, Inc., ––– U.S. ––––, 133 S.Ct. 2223, 2227, 186 L.Ed.2d 343 (2013). The case at bar, now a multidistrict class action, asks this Court to put the Supreme Court's holding into practice.

This action is brought by a class of wholesale drug distributors (the “Direct Purchasers”), a class of individual consumers, third-party payors, union plan sponsors, and certain insurance companies (the “End–Payors”) (collectively, with the Direct Purchasers, the “Class Plaintiffs”), and a number of pharmaceutical retail outlets: Eckerd Corporation, Giant Eagle, Inc., HEB Grocery Company L.P., JCG (PJC) USA, LLC, The Kroger Co., Maxi Drug, Inc. d/b/a Brooks Pharmacy, Rite Aid Corporation, Rite Aid Headquarters Corp., Safeway Inc., Supervalu, Inc., and Walgreen Co. (collectively, the “Retailer Plaintiffs”) (collectively, with the Direct Purchasers and the End–Payors, the “Plaintiffs”). The Plaintiffs have brought claims for alleged violations of federal and state antitrust laws involving the heartburn medication, Nexium, referred to in its generic form as esomeprazole magnesium, against AstraZeneca AB, Aktiebolaget Hassle, and AstraZeneca LP (collectively, “AstraZeneca”), Ranbaxy Pharmaceuticals, Inc., Ranbaxy Inc., and Ranbaxy Laboratories, Ltd. (collectively, “Ranbaxy”), Teva Pharmaceutical Industries, Ltd. and Teva Pharmaceuticals USA, Inc. (collectively, “Teva”), and Dr. Reddy's Laboratories Ltd. and Dr. Reddy's Laboratories, Inc. (collectively, “DRL”) (collectively, with Ranbaxy and Teva, the “Generic Defendants”) (collectively, with AstraZeneca, the “Defendants”).

Beginning in December 2013, the Defendants filed a plethora of motions for summary judgment which the Court decided in January and February of this year. As promised in those summary orders—and as urged by Fed.R.Civ.P. 56(a), see Securities Exch. Comm'n v. EagleEye Asset Mgmt., LLC, 975 F.Supp.2d 151 (D.Mass.2013) —the Court now sets out in full the reasoning for its rulings.

A. Procedural Posture

This case has had an extensive and tortuous procedural history. Out of necessity, the developments and filings in this case will be reviewed here with a primary focus on the motions for summary judgment being addressed in this opinion.

1. Initial Proceedings and Class Certification

On December 7, 2012, six actions pending in the District of Massachusetts, the District of New Jersey, and the Eastern District of Pennsylvania were consolidated into the present multidistrict litigation and assigned to this Court, pursuant to 28 U.S.C. § 1407. See Elec. Notice, Dec. 7, 2012, ECF No. 1; Transfer Order, MDL No. 2409, ECF No. 2. Representatives for the End–Payors filed a consolidated complaint on February 1, 2013, Corrected Consol. Am. Class Action Compl. & Demand Jury Trial (“End–Payors' Compl.”), ECF No. 114, and representatives for the Direct Purchasers filed their consolidated complaint on February 21, 2013, Consol. Am. Compl. & Demand Jury Trial (“Direct Purchasers' Compl.”), ECF No. 131. The Defendants filed a number of motions to dismiss these complaints, and the Court denied all of them at a motion hearing held on April 18, 2013. See Elec. Clerk's Notes, Apr. 18, 2013, ECF No. 218; see also In re Nexium (Esomeprazole) Antitrust Litig., 968 F.Supp.2d 367 (D.Mass.2013).

Several months later, the Court granted two motions certifying an End–Payor damages class,¹ Mem. & Order, Nov. 14, 2013, ECF No. 519, and a Direct Purchaser class, Mem. & Order, Dec. 11, 2013, ECF No. 660. During this time, the Retailer Plaintiffs individually entered this litigation when they collectively filed three amended complaints against the Defendants on November 14, 2013. See Am. Compl. & Demand Jury Trial (“Walgreen Compl.”), ECF No. 515; Am. Compl. & Demand Jury Trial (“Rite Aid Compl.”), ECF No. 516; Am. Compl. & Demand Jury Trial (“Giant Eagle Compl.”), ECF No. 517.

2. Motions for Summary Judgment

On December 10, 2013, the Defendants collectively filed eleven motions for summary judgment. See DRL's Mot. Summ. J. All Claims, ECF No. 594;...