In Re Flonase Antitrust Litigation

879 F.3d 61
CourtCourt of Appeals for the Third Circuit
DecidedDecember 22, 2017
Docket16-1124 & 16-3019
StatusPublished
Cited by8 cases

This text of 879 F.3d 61 (In Re Flonase Antitrust Litigation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Flonase Antitrust Litigation, 879 F.3d 61 (3d Cir. 2017).

Opinion

OPINION

GREENAWAY, JR., Circuit Judge.

In this case, SmithKline Beecham Corporation, doing business as GlaxoSmithK-line (“GSK”), seeks to enforce a court-approved settlement agreement and enjoin the State of Louisiana, through its Attorney General, from bringing allegedly released claims against GSK in the Louisiana state courts. Louisiana protests this enforcement action on the theory that the Eleventh Amendment to the Constitution of the United States bars its involuntary inclusion in the settlement agreement.

To resolve this dispute, we must answer two questions: First, does a motion for approval of a class action settlement qualify as a suit against a state for Eleventh Amendment purposes if the requested settlement agreement enjoins a state from suing in a state court? Second, if the Eleventh Amendment does cover this motion for settlement approval, may GSK avoid the Eleventh Amendment’s prohibition by showing that Louisiana waived its sovereign immunity? We find that the Eleventh Amendment covers this motion and that GSK may not avoid its bar.

In addition to this claim, GSK asserts that the District Court abused its discretion in denying Rule 60(b) relief from a final judgment. We find this, argument unavailing. On these two grounds, we will affirm.

I,

On July 14, 2008, private indirect purchasers of Flonase, a brand-name prescription drug, sued GSK in the United States District Court for the Eastern District of Pennsylvania. They alleged that: (a) GSK had filed sham citizen petitions with the Food and Drug Administration to delay the introduction of a generic version of Flonase, and (b) this delay forced the private indirect purchasers to pay more for Flonase than they would have if the generic version were available. The private indirect purchasers sued on behalf of themselves and a class of other indirect purchasers. For the purpose of the case at bar, two motions matter.

First, in the primary suit, the private indirect purchasers moved for final approval of settlement on April 1, 2013, after the District Court had certified the class, and had approved of the notice to settlement class members. The State of Louisiana, an indirect Flonase purchaser, qualified as a potential class member but' did not receive the approved notice. Instead, it only received a Class Action Fairness Act (“CAFA”) Notice. This notice, “serve[d] upon the appropriate State official of each State in which a class member resides,” included: (1) “a copy of the complaint,” (2) “notice of any scheduled judicial hearing in the class action,” (3) “any proposed or final notification to class members,” (4) “any proposed ... class action settlement,” and (5) an estimate of the number of class members in each state. 28 U.S.C. § 1715(b) (2012). The notice includes this information because Congress “designed [this notice requirement] to ensure that a responsible state and/or federal official receives information about proposed class action settlements and is in a position to react if the settlement appears unfair to some or all class members or inconsistent with applicable regulatory policies.” S. Rep. No. 109-14, at 31 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 32. It made clear, however, that state officials “will not be required” to “get involved.” Id. at 33.

The requested court order “permanently enjoined” all members of the settlement class, including Louisiana, from bringing released claims against GSK, even in Louisiana’s state court. Pis.’ Mot. Final Approval Settlement and Plan Allocation, Award Att’ys’ Fees, Reimbursement Expenses and Incentive Awards Named Pis. at 9-10, In re Flonase Antitrust Litig., No. CV 08-3301, 2015 WL 9273274 (E.D. Pa. Dec. 21, 2015), ECF No. 574 [hereinafter Motion for Final Approval of Settlement Plan]. The proposed settlement agreement, among other things, provided compensation to the plaintiffs and class members, released the plaintiffs’ and class members’ claims, “reserv[ed] exclusive and continuing jurisdiction over the Settlement and this Settlement Agreement” for the District Court, and gave GSK the power to enforce the settlement. App. 98-107. On June 19, 2013, the District Court approved the final settlement.

Second, in the ancillary suit, GSK filed a motion to enforce the settlement agreement against the Louisiana Attorney General because, according to GSK, Louisiana violated the settlement agreement. In its motion, GSK argued that “Louisiana did not opt-out of the Settlement Class, and thus is bound by the release and covenant not to sue provisions in the Settlement Agreement and Final Order and Judgment.” App. 314. As a result, GSK “respectfully submitted] that this Court should enjoin the Louisiana Attorney General from further pursuit of claims that were encompassed by the settlement in this litigation.” App. 315.

On December 21, 2015, the District Court for the Eastern District of Pennsylvania denied this request and dismissed the case. It held that the Eleventh Amendment covered this enforcement action because, pursuant to the Eleventh Amendment, “a State retains the autonomy to choose ‘not merely whether it may be sued, but where it may be sued.’ ” App. 12 (citing Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 99, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984)). See also App. 14 (“Even though some of Louisiana’s claims fall within the Settlement Agreement, I cannot enjoin Louisiana unless the State has waived its sovereign immunity and consented to this Court’s jurisdiction.”). It then held that “Louisiana’s receipt of the CAFA Notice is insufficient to unequivocally demonstrate that the State was aware that it was a class member and voluntarily chose to have its claims resolved by the Settlement Agreement.” App. 17.

Shortly before the District Court decided GSK’s motion to enjoin Louisiana’s state court action, GSK moved pursuant to Rule 60(b)(2) for Relief from a Judgment or Order because of newly discovered evidence that a third party had allegedly submitted a settlement claim on behalf of Louisiana. On May 31, 2016, the District Court denied this motion. GSK appealed the December 21 and May 31 orders.

II.

Because we review the District Court’s final decisions, we exercise jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. “Dismissal of an action based upon sovereign immunity is subject to plenary review by this Court.” Blanciak v. Allegheny Ludlum Corp., 77 F.3d 690, 694 (3d Cir. 1996). “We review the denial of Rule 60(b) relief for an abuse of discretion.” Coltec Indus., Inc. v. Hobgood, 280 F.3d 262, 269 (3d Cir. 2002).

III.

The District Court: (a) properly granted Louisiana’s Motion to Dismiss, (b) appropriately denied GSK’s Motion to Enforce Class Settlement, and (c) did not abuse its discretion in denying GSK’s Rule 60(b) motion. As a result, we will affirm.

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Cite This Page — Counsel Stack

Bluebook (online)
879 F.3d 61, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-flonase-antitrust-litigation-ca3-2017.