In re Nexium (Esomeprazole) Antitrust Litig.

968 F.Supp.2d 367

In re NEXIUM (ESOMEPRAZOLE) ANTITRUST LITIGATION.

Civil Action No. 12–md–02409–WGY.

United States District Court, D. Massachusetts.

Sept. 11, 2013.

Nicole M. Acchione, Trujillo Rodriguez & Richards, LLP, Haddonfield, NJ, Penelope Abdiel, Donald A. Broggi, Joseph P. Guglielmo, Scott & Scott LLP, New York, NY, Walter W. Noss, Scott+Scott LLP, San Diego, CA, Virginia E. Anello, Michael A. London, Douglas & London, P.C., New York, NY, Peter A. Barile, III, Linda P. Nussbaum, Grant & Eisenhofer, P.A., New York, NY, Natalie Finkelman Bennett, Shepherd, Finkelman, Miller & Shah, LLP, Media, PA, John P. Bjork, David P. Germaine, Vanek Vickers & Masini PC, Chicago, IL, James E. Cecchi, Carella Byrne Cecchi Olstein Brody & Agnello, P.C., Roseland, NJ, Russell A. Chorush, Heim Payne & Chorush LLP, Houston, TX, Caitlin G. Coslett, Daniel C. Simons, David F. Sorensen, Nicholas Urban, Berger & Montague PC, Philadelphia, PA, Joseph Opper, Garwin, Bronzaft, Gerstein & Fisher, New York, NY, Don Barrett, Barrett Law Office, Lexington, MS, Justin N. Boley, Dawn M. Goulet, Bethany R. Turke, Edward A. Wallace, Kenneth A. Wexler, Wexler Wallace LLP, Chicago, IL, Brian D. Brooks, Smith Segura & Raphael LLP, New York, NY, Christopher M. Burke, Scott & Scott LLP, San Diego, CA, Moira E. Cain–Mannix, Brian C. Hill, Bernard D. Marcus, Jonathan D. Marcus, Marcus & Shapira, Pittsburgh, PA, Elena Chan, Bruce E. Gerstein, Ephraim R. Gerstein, Garwin Gerstein & Fisher LLP, New York, NY, Eric L. Cramer, Berger & Montague PC, Philadelphia, PA, Glen DeValerio, Berman DeValerio, Boston, MA, Kimberly A. Dougherty, Janet Jenner & Suggs, LLC, Boston, MA, James R. Dugan, II, David B. Franco, Douglas R. Plymale, The Dugan Law Firm, New Orleans, LA, Donna M. Evans, David S. Nalven, Kristen Johnson Parker, Thomas M. Sobol, Andrew J. Vasicek, Hagens Berman Sobol Shapiro LLP, Cambridge, MA, George Farah, J. Douglas Richards, Sharon K. Robertson, Cohen Milstein, New York, NY, Anne K. Fornecker, Hilliard & Shadowen LLC, Austin, TX, Steve D. Shadowen, Hilliard & Shadowen LLC, Mechanicsburg, PA, Daniel C. Girard, Christina C. Sharp, Girard Gibbs & DeBartolomeo LLP, San Francisco, CA, Jayne A. Goldstein, Pomerantz Grossman Hufford Dahlstrom & Gross, LLP, Weston, FL, Peter Kohn, Joseph T. Lukens, Faruqi & Faruqi LLP, Jenkintown, PA, Christopher Lometti, Cohen Milstein Sellers & Toll PLLC, Washington, DC, Anna T. Neill, Douglas H. Patton, Scott E. Perwin, Kenny Nachwalter, P.A., Miami, FL, Peter S. Pearlman, Cohn, Lifland, Pearlman, Herrmann & Knopf, Saddle Brook, NJ, Brian D. Penny, Goldman Scarlato Karon & Penny PC, Wayne, PA, John D. Radice, Radice Law Firm, PC, Long Beach, NJ, Kevin P. Roddy, Wilentz, Goldman & Spitzer PA, Woodbridge, NJ, Lisa J. Rodriguez, Rodriguez & Richards, LLC, Haddonfield, NJ, Michael Aaron Rose, Frank R. Schirripa, Hach & Rose, New York, NY, Susan C. Segura, Smith Segura & Raphael, LLP, Alexandria, LA, Jonathan Shapiro, Stern, Shapiro, Weissberg & Garin, Boston, MA, Thomas G. Shapiro, Shapiro Haber & Urmy LLP, Boston, MA, Archana Tamoshunas, Taus, Cebulash & Landau, LLP, New York, NY, Lindsey H. Taylor, Carella, Byrne, Cecchi, Olstein, Brody & Agnello, Roseland, NJ, for Plaintiffs.

Christopher K. Albert, Brian T. Moriarty, Hamilton Brook Smith & Reynolds, P.C., Concord, MA, Nicholas W. Allen, William A. Zucker, McCarter & English, LLP, Boston, MA, Michael P. Kelly, McCarter & English LLP, Wilmington, DE, James Douglas Baldridge, Sarah Choi, Lisa Jose Fales, Danielle R. Foley, Venable LLP, Washington, DC, Ashley E. Bass, Jonathan Gimblett, Timothy C. Hester, Thomas A. Isaacson, Andrew D. Lazerow, Covington & Burling LLP, Washington, DC, Jonathan B. Berman, Kevin D. McDonald, Stephanie L. Resnik, Jones Day, Washington, DC, Dane H. Butswinkas, Paul B. Gaffney, John E. Schmidtlein, Adam R. Tarosky, James H. Weingarten, Williams & Connolly, Washington, DC, Thea Cohen, Katie Einspanier, Christopher M. Jackson, Rebecca A. Koch, Karen N. Walker, Kirkland & Ellis LLP, Washington, DC, Jay P. Lefkowitz, Kirkland & Ellis LLP, New York, NY, Aaron D. Kaufmann, Leonard Carder LLP, Oakland, CA, Ellen T. Lowenthal, Andrew J. Miller, Budd Larner PC, Short Hills, NJ, Laurence A. Schoen, Adam L. Sisitsky, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, Boston, MA, Leslie F. Su, Minerva Law, P.C., Andover, MA, for Defendants.

MEMORANDUM AND ORDER

YOUNG, District Judge.

I. INTRODUCTION

A group of wholesale drug distributors (the “Direct Purchasers”) and health and welfare benefit funds (the “End–Payors” ¹) (collectively, the “Plaintiffs”), on behalf of themselves and all others similarly situated, brings this multidistrict, putative class action 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, “Dr. Reddy's”) (collectively, with Ranbaxy and Teva, the “Generic Defendants”) (collectively, with AstraZeneca, the “Defendants”) for alleged violations of state and federal antitrust laws.² Specifically, the Plaintiffs contend that AstraZeneca and each of the three Generic Defendants entered into reverse payment agreements to keep generic versions of AstraZeneca's heartburn medication—sold under the brand name Nexium—out of the market, thereby facilitating the extraction of supracompetitive rents by virtue of AstraZeneca's artificially secured monopoly market position.

The Defendants filed five motions to dismiss the Plaintiffs' claims under Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”). The key issues in these motions can be subdivided into two groups: those relating to the Direct Purchasers and those relating to the End–Payors. With respect to the Direct Purchasers, the Defendants argue that (1) the exclusionary conduct at issue falls within the scope of AstraZeneca's Nexium-related patents, so no action for antitrust liability may lie; and (2) even if antitrust liability would otherwise attach to the Defendants' conduct, (a) the doctrine of Noerr–Pennington renders the challenged agreements immune from antitrust scrutiny and (b) the Direct Purchasers' challenge to the particular agreement between AstraZeneca and Ranbaxy is time-barred under the relevant federal statute of limitations. With respect to the End–Payors, the Defendants argue that (1) the applicable state-specific statutes of limitations bar the End–Payors' claims with respect to the agreement between AstraZeneca and Ranbaxy; (2) the End–Payors lack standing under both Article III and Federal Rule of Civil Procedure 23 (“Rule 23”) to bring their claims; and (3) the End–Payors' claims brought under the antitrust laws of eight states (Arizona, Illinois, Mississippi, New York, South Dakota, Tennessee, Utah, and West Virginia) and Puerto Rico and the consumer protection statutes of two states (Massachusetts and North Carolina) are deficient for various reasons.³

At a motion hearing held on April 18, 2013, the Court denied all of the Defendants' motions and asked for further briefing on the viability of the End–Payors' Rule 23 standing and claims under Illinois law. Upon reflection, however, the Court acknowledges that it may have acted hastily on some of the matters presented and, therefore, takes the time here to revisit some of its earlier conclusions. Moreover, at the time of the motion hearing, the parties—and, quite frankly, the Court—were waiting with bated breath for the Supreme Court's decision in Federal Trade Commission v. Actavis, –––U.S. ––––, 133 S.Ct. 2223, 186 L.Ed.2d 343 (2013), which was anticipated to have significant implications for the instant case by resolving fundamental questions concerning the lawfulness of reverse payment agreements. Therefore, although the Court has no reason to modify its judgment with respect to the Defendants' motion to dismiss the Direct Purchasers' claims, the recent arrival of Actavis compels the Court to adjust its rationale in light of that opinion. Finally, armed with additional briefing supplied by the parties, the Court is now prepared to rule on the Rule 23 standing and Illinois law issues left unaddressed at the motion hearing.

A. Procedural Posture

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, after the Court was called upon to intercede in a dispute over which of the parties' attorneys would serve as lead class counsel, see In re Nexium (Esomeprazole) Antitrust Litig., No. 12–md–02409–WGY, 2013 WL 326215 (D.Mass. Jan. 24, 2013). One month later, on March 1, 2013, the Defendants filed their motion to dismiss the End–Payors' consolidated complaint, Defs.' Mot. Dismiss Indirect Purchasers' Consol. Am. Compl., ECF No. 155, together with their supporting memorandum of law, Defs.' Mem. Supp. Their Mot. Dismiss Indirect Purchasers' Consol. Am. Compl. (Dkt. No. 114) Pursuant Fed. Rule Civil Procedure 12(b)(6) (“Defs.' Mot. Dismiss End–Payors”), ECF No. 156. The End–Payors filed their memorandum in opposition to the Defendants' motion to dismiss on March 22, 2013. End–Payor Class Pls' Mem. Opp'n Defs.' Mot. Dismiss (“End–Payor's Mem. Opp'n”), ECF No. 189. The Defendants filed their reply to the End–Payors' opposition in further support of their motion on April 5, 2013. Defs.' Reply Mem. Further Supp. Their Mot. Dismiss Indirect Purchasers' Consol. Am. Compl. (Dkt. No. 114) Pursuant Fed. Rule Civil Procedure 12(b)(6) (“Defs.' Reply End–Payors”), ECF No. 208.

The Direct Purchasers, for their part, filed a consolidated complaint with this Court on February 21, 2013. Consol. Am. Compl. & Demand Jury Trial (“Direct Purchasers' Compl.”), ECF No. 131. The following day,...