In re Tamoxifen Citrate Antitrust Litigation

222 F.Supp.2d 326

In re TAMOXIFEN CITRATE ANTITRUST LITIGATION

No. MDL 1408(ILG).

United States District Court, E.D. New York.

August 26, 2002.

Joel M. Cohen, Davis Polk & Wardell, New York City, Bernard Persky, Barbara J. Hart, Hollis L. Salzman, Goodkind Labaton Rudoff & Sucharow LLP, New York City, for Tamoxifen Citrate Antitrust Litigation.

MEMORANDUM AND ORDER

GLASSER, District Judge.

SUMMARY

Plaintiffs Caroline Marks ("Marks"), Maxine Blonstein ("Blonstein"), and Lois Steward ("Steward"), on behalf of themselves and those similarly situated, represent classes of consumers and indirect purchasers of tamoxifen citrate ("tamoxifen") in California, Florida, and Kansas, respectively. Plaintiffs originally filed suits in state courts against defendants Zeneca, Inc., AstraZeneca Pharmaceuticals LP, AstraZeneca LP, AstraZeneca PLC (collectively "Zeneca") and Barr Laboratories, Inc. ("Barr"), alleging state antitrust and consumer protection claims. Defendants subsequently removed the cases to federal court based on federal question and/or diversity jurisdiction.

Now before the Court are plaintiffs' two motions to remand, including the Marks and Blonstein plaintiffs' joint motion, see Marks v. Barr Labs., Inc (transferred from the Northern District of California) and Blonstein v. Barr Labs., Inc. (transferred from the Southern District of Florida), and the Steward plaintiffs' motion, see Steward v. Barr Labs. (transferred from the District of Kansas). Because there is substantial overlap of the arguments raised in the parties' briefs, the Court will consider the motions together.

BACKGROUND¹

These actions involve the drug tamoxifen, a critical drug for the treatment of breast cancer. In 1993, Zeneca acquired United States Patent 4,536,516 (the "'516 Patent") for tamoxifen from its predecessor, Imperial Chemical Industries, PLC ("ICI"). The '516 Patent will expire on August 20, 2002. Until that time, Zeneca owns the exclusive right in the United States to manufacture, sell, and license tamoxifen. Zeneca markets tamoxifen under the trade name Nolvadex.®

In December 1985, Barr filed an Abbreviated New Drug Application ("ANDA") with the Food and Drug Administration ("FDA"), requesting approval to sell a generic bioequivalent version of the "pioneer" drug tamoxifen. An ANDA filing is governed by the Hatch-Waxman Act, 21 U.S.C. § 355, which provides an expedient method of obtaining FDA approval to bring generic bioequivalent drugs to the market. In addition to affirming that the generic drug contains the same active ingredient(s) as the patented drug already approved and listed by the FDA, an ANDA filer must certify, inter alia, that the patent of the pioneer drug is either invalid or would not be infringed by the generic bioequivalent version. See 21 U.S.C. § 355(j)(2)(A)(vii). Barr's ANDA application certified that the '516 Patent was invalid and unenforceable. Within forty-five days of receiving notice of Barr's ANDA application, ICI sued Barr for patent infringement in the Southern District of New York.² This lawsuit had the effect of staying FDA consideration and approval of Barr's ANDA application for thirty months or until the date of a final nonappealable determination as to the validity of the patent, whichever is earlier. See 21 U.S.C. § 355(j)(5)(B)(iii). The court, in its discretion, however, may extend the stay if the litigation is not resolved within the thirty month period. Id. One of the benefits of being the first ANDA filer to obtain FDA approval is an exclusive 180-day period in which to sell the generic drug free from other generic drug competition. See 21 U.S.C. § 355(j)(5)(B)(iv). The 180-day period of market exclusivity begins when the applicant first sells its product or when a final non-appealable judicial determination is entered as to the patent's invalidity, whichever is earlier.³ Id.

ICI's patent infringement suit against Barr was tried before the late Judge Vincent L. Broderick. On April 20, 1992, Judge Broderick held that the '516 Patent was invalid and unenforceable, because ICI wrongfully withheld relevant material from the United States Patent and Trade-mark Office. Imperial Chem. Indus., PLC v. Barr Labs., Inc., 795 F.Supp. 619 (S.D.N.Y.1992). ICI appealed that determination to the Federal Circuit. However, in 1993, while the appeal was pending, ICI/Zeneca and Barr entered into a settlement agreement (the "Settlement Agreement"), whereby Barr agreed to drop its challenge to the validity of the '516 Patent and to amend its ANDA application to certify that it would not seek to market its generic version of tamoxifen until the patent expired, Zeneca agreed to pay Barr $21 million and to give Barr a license to sell Zeneca's tamoxifen under a generic label.

The Settlement Agreement was to become effective only upon entry of an order by the Federal Circuit directing the district court to vacate its finding of patent invalidity. Barr and Zeneca filed a Joint Motion to Dismiss the Appeal as Moot and to Vacate the Judgment Below. On March 19, 1993, the Federal Circuit granted the motion to dismiss and vacated the judgment below, pursuant to its practice at the time to honor settlement agreements. See Imperial Chem. Indus., PLC v. Heumann Pharma GmbH & Co., 991 F.2d 811 (Fed. Cir. Mar.19, 1993) (unpublished).⁴ On March 23, 1993, Judge Broderick vacated the judgment and entered a Stipulation of Dismissal and Order. Consequently, the '516 Patent remains valid, and Zeneca's Nolvadex and Barr's generic are the only tamoxifen currently on the market.

The Settlement Agreement has spawned thirty lawsuits around the country, all of which have been transferred to this Court, pursuant to 28 U.S.C. § 1407, by the Judicial Panel on Multi-District Litigation, for coordination of pre-trial matters. The complaints allege that the Settlement Agreement has enabled Zeneca and Barr to (i) revive a patent that Barr had established was invalid and unenforceable; (ii) allocate the entire United States market for tamoxifen to one manufacturer: Zeneca; (iii) share the monopoly profits of Zeneca's tamoxifen; (iv) avoid price competition and maintain artificially inflated market prices for Nolvadex® and its Zeneca-manufactured generic; and (v) exclude competition from other generic manufacturers. (See Blonstein Compl. ¶ 57; Marks Compl. ¶ 79; Steward Compl. ¶ 57.) The complaints also allege that the FDA would have been permitted to grant final approval to Barr's generic version of tamoxifen if the appeal of the patent suit against Barr had run its course and had resulted in an affirmance of Judge Broderick's finding of invalidity. (See Blonstein Compl. ¶ 60; Marks Compl. ¶ 82; Steward Compl. ¶ 58.)

As noted above, these actions were filed in state courts, and were then removed by defendants to federal courts. Plaintiffs now seek to remand the actions, arguing that the federal courts lack subject matter jurisdiction. The Steward plaintiffs argue, in the alternative, that removal was improper based on a procedural defect in the notice of removal. In support of removal, defendants argue that federal question jurisdiction exists, pursuant to 28 U.S.C. § 1331, under (1) federal patent law; (2) the Noerr-Pennington Doctrine; and (3) the theory that plaintiffs are collaterally attacking federal court orders. With respect to the Marks class action only, defendants also argue that diversity jurisdiction exists under 28 U.S.C. § 1332.

DISCUSSION

In a multidistrict litigation, such as this one, the law of the circuit where the transferee court sits governs in deciding questions of federal law. See Menowitz v. Brown, 991 F.2d 36, 40 (2d Cir.1993). Thus, the Court will apply the law of this Circuit in deciding the motions.

I. Legal Standard for Remand

A state court action may be removed to federal court "if it qualifies as a `civil action ... of which the district courts of the United States have original jurisdiction ....'" Rivet v. Regions Bank of La., 522 U.S. 470, 474, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998) (quoting 28 U.S.C. § 1441(a)). However, the Court is required to remand "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c); Manway Constr. Co. v. Hous Auth. of Hartford, 711 F.2d 501, 503 (2d Cir.1983). "[F]ederal courts construe the removal statute narrowly, resolving any doubts against removability." Somlyo v. J. Lu-Rob Enters., Inc., 932 F.2d 1043, 1045-46 (2d Cir.1991) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 85 L.Ed. 1214 (1941)). Thus, the party requesting removal carries a heavy burden to demonstrate that the removal was proper. See United Food & Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994).

II. The Actions "Arise Under" Federal Patent Law

A federal court has original jurisdiction of all civil actions "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Under long-standing Supreme Court precedents, the analysis of whether a claim "arises under" federal law is determined by the "`well-pleaded complaint rule, which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.'" Rivet, 522 U.S. at 475, 118 S.Ct. 921 (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)). An "independent corollary" to the well-pleaded complaint rule, Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 22, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983), "is the further principle that `a plaintiff may not defeat removal by omitting to plead necessary federal questions.'" Rivet, 522 U.S. at 475, 118 S.Ct. 921 (quoting Franchise Tax Bd. of Cal., 463 U.S. at 22, 103 S.Ct. 2841). "If a court concludes that a plaintiff has `artfully pleaded' claims in...