In re Relafen Antitrust Litigation

218 F.R.D. 337, 2003 U.S. Dist. LEXIS 20306, 2003 WL 22680883
District Court, D. Massachusetts·Decided November 10, 2003·No. No. 01-12239-WGY·Published·Cited by 52 cases

Opinion

MEMORANDUM

YOUNG, Chief Judge.

I. INTRODUCTION

On October 29, 2003, this Court issued an order allowing the Direct Purchaser Plaintiffs’ Motion for Class Certification [Doc. No. 119]. 10/29/03 Order, In re Relafen Antitrust Litig., Master File No. 01-12239-WGY [Doe. No. 151]. This memorandum explains the reasoning behind the Court’s decision.

II. BACKGROUND

This case presents a consolidated action against SmithKline Beecham Corporation and GlaxoSmithKline PLC (collectively “SmithKline”) for violations of the antitrust laws related to its patent for the chemical compound nabumetone, which it sells commercially as “Relafen.” Parties who purchased Relafen directly from SmithKline during the complaint period (“direct purchasers” or the “direct purchaser plaintiffs”) moved for class certification under Federal Rule of Civil Procedure 23(b)(3).1

A. Factual Background2

On December 13, 1983, SmithKline received U.S. Patent No. 4,420,639 (the “’639 patent”) for the compound nabumetone, a non-steroidal anti-inflammatory drug. SmithKline commenced commercial sales of nabumetone under the brand name Relafen in February, 1992. In August, and December, 1997, Copley Pharmaceutical, Inc. (“Copley”), Teva Pharmaceutical Industries, Ltd. and Teva Pharmaceuticals USA (“Teva”), and Eon Laboratories, Inc. (“Eon”) sought approval from the Food and Drug Administration (the “FDA”) to market generic nabumetone products. Upon commencement of [341] SmithKline’s lawsuits to enforce its ’639 patent, however, the FDA stayed approval of the generic drugs for thirty months. Id. at 4. On August 8, and December 24, 1998, the FDA issued tentative approval to Teva’s and Eon’s generic nabumetone products, but withheld final approval until the conclusion of the thirty-month stay period. That stay period terminated in May, 2000.

SmithKline filed the patent suits in question on October 27, 1997 (against Copley), November 13, 1997 (against Teva), and February 17, 1998 (against Eon). After a bench trial, Judge Lindsay of this district issued a sixty-seven-page opinion, which found, inter alia, that (1) claims 2 and 4 of the ’639 patent were invalid as anticipated by prior art; and (2) the ’639 patent was unenforceable because of SmithKline’s inequitable conduct before the Patent Office. In re ’639 Patent Litig., 154 F.Supp.2d 157, 194-95 (D.Mass. 2001) (Lindsay, J.). On August 15, 2002, the Federal Circuit affirmed the district court’s decision as to the validity of the ’639 patent but did not reach the issue of inequitable conduct. SmithKline Beecham Corp. v. Copley Pharm., Inc., 45 Fed.Appx. 915, 917 (Fed. Cir.2002) (unpublished opinion).

Essentially, the plaintiffs claim that but for SmithKline’s wrongful filing of patent lawsuits, purchasers could have begun purchasing nabumetone in a competitive market— comprising both Relafen and its generic alternatives — as early as September, 1998. Because of the pending litigation, however, the generic alternatives did not become available until after the stay period terminated and SmithKline’s patent was invalidated. Teva3 began marketing its generic products in August, 2001, with Eon following suit in February, 2002.

B. Procedural Background

On December 26, 2002, direct purchasers of Relafen filed a consolidated class action complaint against SmithKline for violations of the federal antitrust laws. The lead direct purchaser plaintiff, Louisiana Wholesale Drug Company, Inc.4 (“Louisiana Wholesale”), alleged that by blocking market entry of lower-priced generic equivalents, Smith-Kline “forced all direct purchasers of Relafen to pay supraeompetative prices.” Direct Purchaser Pis.’ Mem. [Doe. No. 121] at 1. The proposed class of direct purchasers is defined as:

All persons or entities in the United States or its territories who purchased Relafen directly from defendants at any time during the period of September 1, 1998 through December 31, 2002.

Direct Purchaser Pis.’ Reply Br. [Doc. No. 138] at 26 (amending the original complaint period, which extended from “December 24, 1998 through the date on which the anti-competitive effects of defendant’s conduct ceased”). The direct purchaser plaintiffs here moved for class certification under Federal Rule of Civil Procedure 23(b)(3). [Doc. No. 119].

III. DISCUSSION

A. Legal Standard

On a motion for class certification, “[a] district court must conduct a rigorous analysis of the prerequisites established by Rule 23.” Smilow v. Southwestern Bell Mobile Sys., Inc., 323 F.3d 32, 38 (1st Cir.2003) (citing General Tel. Co. v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)). This analysis should not involve a “preliminary hearing into the merits,” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), but rather an inquiry into “whether the requirements of Rule 23 are met.” Miller v. Mackey Int’l, Inc., 452 F.2d 424, 427 (5th Cir.1971). The moving party bears the burden of establishing the elements necessary for class certification: the four requirements of Rule 23(a) and one of the several requirements of Rule 23(b). Smilow, 323 F.3d at 38 (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)); Guckenberger v. Boston Univ., 957 F.Supp. 306, 325 (D.Mass.1997) (Saris, J.).

[342] Rule 23(a) imposes four “threshold requirements” applicable to all class actions:

(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the. representative parties will fairly and adequately protect the interests of the class.

Fed.R.Civ.P. 23(a); Amchem, 521 U.S. at 613, 117 S.Ct. 2231.

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In re Relafen Antitrust Litigation, 218 F.R.D. 337, 2003 U.S. Dist. LEXIS 20306, 2003 WL 22680883 (D. Mass. 2003).

218 F.R.D. 337 (In re Relafen Antitrust Litigation) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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