Endo Pharm. Inc. v. Fed. Trade Comm'n

345 F. Supp. 3d 554
CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 29, 2018
DocketCiv. No. 16-5599
StatusPublished
Cited by7 cases

This text of 345 F. Supp. 3d 554 (Endo Pharm. Inc. v. Fed. Trade Comm'n) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Endo Pharm. Inc. v. Fed. Trade Comm'n, 345 F. Supp. 3d 554 (E.D. Pa. 2018).

Opinion

Diamond, District Judge.

After the Federal Trade Commission voluntarily dismissed its enforcement action in this Court against Plaintiffs Watson Laboratories and Allergan Finance-and then refiled that same enforcement action in California-Plaintiffs brought this declaratory judgment suit, repeating the arguments made in their motions to dismiss in the original enforcement action. Although the FTC's apparent forum shopping may warrant sanctions, the law does not allow Plaintiffs to challenge the Commission's enforcement decisions by way of declaratory judgment when they can do so in defending against the California enforcement action itself. Accordingly, I will grant the FTC's Motion to Dismiss.

*557I. BACKGROUND

The Original Action

On March 30, 2016, proceeding under the FTC and Clayton Acts, the Commission initiated an enforcement action in this Court seeking injunctive and equitable relief against: Endo Pharmaceuticals Inc.; Endo International plc; Teikoku Pharma USA, Inc.; Teikoku Seiyaku Co., Ltd.; Watson Laboratories, Inc.; Allergan plc (the parent company of Watson); and Impax Laboratories, Inc. See F.T.C. v. Endo Pharms. Inc., No. 16-1440, Doc. Nos. 1 (under seal), 32 (redacted); 15 U.S.C. §§ 18, 45(a). The FTC alleged, inter alia , that: (1) in June 2010, Endo, which produced "Opana ER," impermissibly agreed to pay Impax to delay market introduction of its generic version of the drug; and (2) in May 2012, Endo and Teikoku, which produced and marketed "Lidoderm," agreed to pay Watson to delay market introduction of its generic, all in violation of Section 5(a) of the FTC Act. See Endo, No. 16-1440, Doc. No. 32 ¶¶ 179-182 (Opana counts), 183-190 (Lidoderm counts); 15 U.S.C. § 45(a). The Commission proceeded under Section 13(b) of the FTC Act, which authorizes the Commission to seek injunctive relief against an entity that is "violating, or is about to violate" any law enforced by the Commission. Endo, No. 16-1440, Doc. No. 32 ¶ 11; 15 U.S.C. § 53(b).

When Teikoku settled with the FTC, I approved a Stipulated Order for Permanent Injunction, dismissing the enforcement action as to Teikoku. Endo, No. 16-1440, Doc. No. 14. The remaining defendants-Endo, Impax, APLC, and Watson-moved to dismiss. Endo, No. 16-1440, Doc. Nos. 57, 58, 61, 69, 70; Fed. R. Civ. P. 12(b)(6), 21. They argued that the FTC could not proceed in federal court because the FTC Act does not authorize the Commission to challenge in court only past conduct. See, e.g., Endo, No. 16-1440, Doc. No. 69-2 at 18 ("[Congress] did not authorize the FTC to bring a federal lawsuit alleging only past violations.... Section 13(b), therefore, does not authorize this action and it should be dismissed in its entirety."). They urged that the Commission should instead have pursued its claims in an administrative proceeding pursuant to Section 5(b), which authorizes such proceedings when a party "has been or is using any unfair method of competition." See, e.g., id. at 10, 12; 15 U.S.C. § 45(b). I previously described these Motions to Dismiss "as anything but frivolous." See Endo, 16-1440, Doc. No. 119 at 7.

The defendant drug companies also asked me to sever the Opana and Lidoderm claims because the challenged agreements, underlying circumstances, generic manufacturers, and the drugs themselves had no factual or temporal nexus. Endo, No. 16-1440, Doc. Nos. 57, 58, 61. In opposing severance, the FTC asked, in the event I severed, to transfer the severed cases to the Northern District of California and the Northern District of Illinois, where related private MDL actions were pending. Endo, No. 16-1440, Doc. No. 73 at 18-20; 28 U.S.C. § 1404(a) ; In re Lidoderm Antitrust Litig., MDL No. 2521 (N.D. Cal.); In re Opana ER Antitrust Litig., MDL No. 2580 (N.D. Ill.). The Commission admonished that if I did not transfer the severed cases, it would "voluntarily dismiss both actions pursuant to Federal Rule of Civil Procedure 41(a)(1) and refile them separately in the respective district courts." Endo, No. 16-1440, Doc. No. 73 at 18.

On October 20, 2016, I severed the FTC's Opana and Lidoderm claims, but did not transfer the severed cases. Endo, No. 16-1440, Doc. Nos. 119, 120. I took a dim view of the Commission's threatened actions:

*558Having chosen to litigate in this District, it comes with ill grace for the FTC to pick up its marbles and play in venues more to its liking. I will not transfer the claims. Should the FTC voluntarily withdraw them, I will entertain Defendants' requests for fees and costs.

Endo, No. 16-1440, Doc. No. 119 at 1.

On October 25, the FTC voluntarily dismissed the action. Endo, No. 16-1440, Doc. No. 121; Fed. R. Civ. P. 41(a)(1)(A)(i). Plaintiffs charged that this was a "transparent effort to prevent this Court from deciding the dispositive issues raised in [the drug companies'] motion to dismiss." (Am. Compl. ¶ 6, Doc. No. 44.)

The Declaratory Judgment Suits and FTC's California Enforcement Action

On October 26, 2016, Endo, Watson, and Impax filed before me declaratory judgment suits against the FTC. (Compl., Doc. No. 1 (Endo and Watson Plaintiffs) ); Endo Pharms. Inc. v. F.T.C., No. 16-5600, Doc. No. 1 (Endo and Impax Plaintiffs). Advancing the same arguments made in their Motions to Dismiss the FTC's enforcement action, Plaintiffs sought a declaration "that Section 13(b) of the FTC Act does not authorize the FTC to file an action in federal court against [them]"-or in the alternative, that it does not "authorize the FTC to seek disgorgement or restitution"-involving claims based on the Lidoderm and Opana agreements. (Compl. at 18); Endo, No. 16-5600, Doc. No. 1 at 19.

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345 F. Supp. 3d 554, Counsel Stack Legal Research, https://law.counselstack.com/opinion/endo-pharm-inc-v-fed-trade-commn-paed-2018.