In re Rotavirus Vaccines Antitrust Litig.

362 F. Supp. 3d 255
CourtDistrict Court, E.D. Pennsylvania
DecidedJanuary 22, 2019
DocketCIVIL ACTION NO. 18-CV-1734 (Consolidated)
StatusPublished
Cited by2 cases

This text of 362 F. Supp. 3d 255 (In re Rotavirus Vaccines Antitrust Litig.) 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
In re Rotavirus Vaccines Antitrust Litig., 362 F. Supp. 3d 255 (E.D. Pa. 2019).

Opinion

JOYNER, District Judge

This consolidated putative antitrust class action has been brought before the Court on Motion of Defendant Merck Sharp & Dohme Corp. ("Merck") to compel each individual plaintiff to arbitration and to *259stay these proceedings pending such arbitrations. For the reasons which we explain in the pages which follow, the motion shall be denied.

Factual Background

As averred in the Consolidated Amended Class Action Complaint filed by Sugartown Pediatrics, LLC and Schwartz Pediatrics S.C.,1 this lawsuit "challenges Merck's anticompetitive vaccine bundling scheme whereby Merck leverages its monopoly power in multiple pediatric vaccine markets to maintain its monopoly power in the Rotavirus Vaccine Market and, consequently, to charge supracompetitive prices to purchasers of its rotavirus vaccines." (Consol. Am. Compl., ¶ 2). In essence, Plaintiffs allege that as to its RotaTeq Rotavirus vaccine, instead of lowering the price which it was charging when it held 100% of the Rotavirus market, Merck responded to the entry of GlaxoSmithKline's competing vaccine, Rotarix, by adding an "exclusionary RotaTeq Bundled Loyalty Condition to its [buying] contracts, thereby bundling RotaTeq with its other pediatric vaccines." (Consol. Am. Compl., ¶ s112, 114-115). In so doing, Plaintiffs aver that Merck penalized any of its customers who would buy Rotarix from GSK by forcing them to pay substantially higher prices for all of the vaccines in the Merck Bundle, including those for which Merck is the sole seller. (Consol. Am. Compl., ¶ 116). Plaintiffs allege that they suffered anti-trust injury because they, like most physicians, practices and hospitals, purchase the vaccines which they administer to their patients through Physician Buying Groups ("PBGs") and Merck has effectively co-opted the PBGs to impose and enforce its anticompetitive and exclusionary conduct with the result that they and the proposed class members have repeatedly paid artificially inflated prices for rotavirus vaccines since Rotarix entered the market and continuing through the present. (Consol. Am. Compl., ¶ s 117-120, 145-149).

By the motion that is now before us, Merck seeks to stay this matter and compel Plaintiffs to submit its claims to arbitration on the basis of arbitration clauses contained within Merck's contracts with the three Physician Buying Groups through which Plaintiffs purchased their vaccines. Those clauses are virtually identical in all three of the contracts at issue and read as follows:

Any controversy, claim or dispute arising out of or relating to the performance, construction, interpretation or enforcement of this Agreement shall, if not resolved through negotiations between the parties, be submitted to mandatory binding arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. Sec. 1 et. seq.

Plaintiffs rejoin that this matter should not be submitted to arbitration because they were not signatories to any agreements directly with Merck and the agreements which they entered into with the Physician Buying Groups of which they were members did not contain any such clauses requiring submission of any of their disputes to arbitration.

Discussion

A. Arbitration under the Federal Arbitration Act

As the Supreme Court has observed, "Congress adopted the [Federal] Arbitration Act in 1925 in response to a perception that courts were unduly hostile to arbitration" and, in so doing, "directed courts to abandon their hostility and instead treat arbitration agreements as 'valid, *260irrevocable, and enforceable.' " Epic Systems Corp. v. Lewis, --- U.S. ----, 138 S.Ct. 1612, 1621, 200 L.Ed.2d 889 (2018) (quoting 9 U.S.C. § 2 ); CompuCredit Corp. v. Greenwood, 565 U.S. 95, 97, 132 S.Ct. 665, 669, 181 L.Ed.2d 586 (2012). The Act, codified at 9 U.S.C. § 1, et. seq. , thereby "establishes a 'liberal federal policy favoring arbitration agreements.' " Id., (quoting Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983) ).

The Federal Arbitration Act also provides two parallel devices for enforcing an arbitration agreement: a stay of litigation in any case raising a dispute referable to arbitration [ 9 U.S.C. § 3 ], and an affirmative order to engage in arbitration [§ 4]. Moses H. Cone, 460 U.S. at 23, 103 S.Ct. at 940. Fundamentally, however, "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 648, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986) (quoting Steelworkers v. Warrior & Gulf Navigation Co.

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