Lakeland Regional Medical Center, Inc. v. Astellas US, LLC

763 F.3d 1280, 2014 WL 3973390
CourtCourt of Appeals for the Eleventh Circuit
DecidedAugust 15, 2014
Docket13-12709
StatusPublished
Cited by2 cases

This text of 763 F.3d 1280 (Lakeland Regional Medical Center, Inc. v. Astellas US, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lakeland Regional Medical Center, Inc. v. Astellas US, LLC, 763 F.3d 1280, 2014 WL 3973390 (11th Cir. 2014).

Opinion

EBEL, Circuit Judge:

Defendants-Appellees Astellas US, LLC and Astellas Pharma US, Inc. (collectively “Astellas”) holds patents on a cardiac test and sells its unpatented pharmaceutical product, Adenoscan, for use during that test. Plaintiff-Appellant Lakeland Regional Medical Center, Inc. (the “Medical Center”), which conducts these cardiac tests, alleges that Astellas is able to overcharge the Medical Center for the Adenoscan product by unlawfully tying the patented right to perform the patented cardiac test to the purchase of the unpatented Adenoscan in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. At issue in this appeal is the district court’s refusal to certify the Medical Center’s tying claim as a class action. We AFFIRM.

BACKGROUND

Healthcare providers often test for coronary artery disease using a procedure called myocardial perfusion imaging *1283 (“MPI”). This test is most accurate when carried out while the heart is stressed by, for example, administering adenosine to the patient during the procedure. Adeno-sine is a naturally occurring chemical compound that causes selective blood vessels to dilate. Astellas has held two patents for performing an MPI using adenosine; the first patent expired in March 2009 and the second will expire in March 2015. As-tellas does not offer healthcare providers a freestanding license to perform its patented MPI procedure. Instead, healthcare providers obtain an implied license to perform the MPI procedure by purchasing Astellas’s unpatented adenosine product, Adenoscan, for use during the procedure.

When this litigation began, Adenoscan was the only adenosine product that the Food and Drug Administration (“FDA”) had approved for use during an MPI. There are other adenosine products available in the market, however, and healthcare providers are not bound by the FDA’s approval ruling, but can, instead, use any adenosine product during an MPI that the healthcare providers, in their medical judgment, deem appropriate. Exercising that prerogative, the Medical Center began using ehemically-identical adenosine products that were cheaper than Adenos-can during MPIs performed at the Medical Center. Astellas responded by threatening to sue the Medical Center for performing Astellas’s patented MPI procedure without a license.

The Medical Center sued Astellas first for, among other claims, violating federal antitrust laws by illegally tying the implied license to perform MPIs involving adeno-sine to the purchase of Adenoscan. See 15 U.S.C. § l. 1 According to the Medical Center, this unlawful tying arrangement enabled Astellas to charge 450% more for Adenoscan than the price for other, chemically-identical adenosine products. As relief, the Medical Center sought 1) treble damages for the amount Astellas had overcharged the Medical Center for Adenos-can, and 2) injunctive and declaratory relief. See 15 U.S.C. §§ 15(a), 26.

The Medical Center brought its case as a class action on behalf of all healthcare providers who had purchased Adenoscan during a four-year period, from September 2006 through September 2010. But the district court refused to certify the class, ruling, among other things, that the Medical Center was not a viable class representative because 1) the direct purchaser rule, see Illinois Brick Co. v. Illinois, 431 U.S. 720, 729, 736, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), precluded the Medical Center’s own treble damages claim since the Medical Center had purchased Adenoscan, not directly from Astellas, but instead from several independent pharmaceutical distributors; and 2) the Medical Center’s requests for declaratory and injunctive relief were, or soon would be, moot because, after the initiation of this suit, the FDA had approved a generic version of Adenos-can for use during MPIs and because the Medical Center insufficiently articulated the class-wide injunctive relief that it reasonably could obtain.

*1284 Although the district court’s denial of class certification was not a final, appeal-able order, see Coopers & Lybrand v. Li-vesay, 437 U.S. 463, 464-65, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), the ruling effectively foreclosed the Medical Center’s tying claim. The Medical Center thus stipulated to the entry of final judgment against it on all of its claims while preserving its right to appeal the district court’s denial of class certification. See Dorse v. Armstrong World Indus., Inc., 798 F.2d 1372, 1376-77 (11th Cir.1986). Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM.

DISCUSSION

1. Because the direct purchaser rule precludes the Medical Center’s own treble damages claim, the district court did not abuse its discretion in refusing the Medical Center’s request to certify a class seeking damages against Astellas for unlawful tying

A. Relevant legal principles

This appeal involves the interaction between law governing claims for unlawful tying and antitrust standing principles. The Medical Center has claimed a classic tying arrangement. 2 Its allegations are as follows: Astellas is the source of two products. First, Astellas has a patent on performing MPIs that use adenosine to stress the patient’s heart during the procedure. Healthcare providers wanting to perform that procedure, therefore, need a license from Astellas to do so. Second, Astellas sells Adenoscan which, at the time this litigation began, was the only adenosine product that the FDA had approved for use during the patented MPI procedure, although there were other adenosine products available on the market that could perform the same function as Adenoscan. According to the Medical Center’s allegations, Astellas leveraged its power in the testing market to overcharge for Adenos-can. The Medical Center contends that it was injured by this tying arrangement because the only way it could obtain the tying product that it needed — a license from Astellas to perform MPIs involving adenosine — was to overpay for Adenoscan. The Medical Center further contends that, by requiring it to buy the overpriced Ade-noscan in order to get the process license it wanted, Astellas foreclosed the Medical Center from purchasing other adenosine products at much lower prices for use during the MPIs. The Medical Center measures its tying damages, then, by the amount it overpaid for Adenoscan when compared with the amount it could have paid to purchase another adenosine product. 3

*1285 But it is well-settled that not everyone who is injured by an antitrust violation can recover (treble) damages. 4

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Bluebook (online)
763 F.3d 1280, 2014 WL 3973390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lakeland-regional-medical-center-inc-v-astellas-us-llc-ca11-2014.