Steamfitters Local Union No. 420, individually and on behalf of all others similarly situated v. United Biosource Corporation, now known as United Biosource LLC, a wholly owned subsidiary of United Biosource Holdings, Inc.

CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 31, 2025
Docket2:19-cv-03047
StatusUnknown

This text of Steamfitters Local Union No. 420, individually and on behalf of all others similarly situated v. United Biosource Corporation, now known as United Biosource LLC, a wholly owned subsidiary of United Biosource Holdings, Inc. (Steamfitters Local Union No. 420, individually and on behalf of all others similarly situated v. United Biosource Corporation, now known as United Biosource LLC, a wholly owned subsidiary of United Biosource Holdings, Inc.) 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.

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Steamfitters Local Union No. 420, individually and on behalf of all others similarly situated v. United Biosource Corporation, now known as United Biosource LLC, a wholly owned subsidiary of United Biosource Holdings, Inc., (E.D. Pa. 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

STEAMFITTERS LOCAL UNION NO. CIVIL ACTION 420, individually and on behalf of all others similarly situated, Plaintiff,

v. NO. 19-3047

UNITED BIOSOURCE CORPORATION, now known as UNITED BIOSOURCE LLC, a wholly owned subsidiary of UNITED BIOSOURCE HOLDINGS, INC., Defendant.

HODGE, J. October 31, 2025 MEMORANDUM Before the Court is Defendant United Biosource Corporation’s (“Defendant” or “UBC”) request to bifurcate this proceeding under Federal Rule of Civil Procedure 42(b) for a determination of the collateral estoppel effects of the Bankruptcy Court’s decision in In re Mallinckrodt PLC, 638 B.R. 57 (Bankr. D. Del. 2021) (the “AICs Bankruptcy Decision”).1 The Parties’ positions on bifurcation are detailed in Defendant’s Position on Bifurcation (ECF No. 124), Plaintiff Steamfitters Local Union No. 420’s (“Plaintiff” or “Steamfitters”) Memorandum of Law in Opposition to Defendant’s Claim to Apply Collateral Estoppel to Bifurcate the Proceedings Under Federal Rule of Civil Procedure 42(b) (ECF No. 123), Defendant’s Reply in Support of

1 The Court clarifies that this issue was not raised as a motion by Defendant. Rather, bifurcation was originally raised by Defendant in the December 28, 2022 Joint Status Report (ECF No. 113) following Mallinckrodt ARD LLC’s Notice of Bankruptcy Discharge (ECF Nos. 111, 113). In response, Judge Berle Schiller ordered the Parties to provide briefs on bifurcation in light of the potential collateral estoppel effects of the Bankruptcy Decision on January 4, 2023 (ECF No. 117). This Court ordered supplemental briefing on the bifurcation issue on October 9, 2024 (ECF No. 135) after a status hearing with the parties on October 7, 2024 (ECF No. 137). Position Statement on Bifurcation (ECF No. 129), Plaintiff’s Response to Defendant’s Position on Bifurcation (ECF No. 130), Defendant’s Supplemental Brief Regarding Collateral Estoppel (ECF No. 140), Plaintiff’s Supplemental Memorandum (ECF No. 142), Plaintiff’s Notice of Supplemental Authority in Relation to Defendant’s Request to Bifurcate Proceedings (ECF No.

132), and Defendant’s response thereto (ECF No. 133). Defendant submits that bifurcation is proper to determine the potential collateral estoppel effect on Plaintiff’s claims of the U.S. Bankruptcy Court for the District of Delaware’s decision in In re Mallinckrodt PLC, 638 B.R. 57 (Bankr. D. Del. 2021). Plaintiff asserts that collateral estoppel is inapplicable, and therefore bifurcation is inappropriate. Because the Court finds that the Bankruptcy Court’s decision does not meet the requirements to act as collateral estoppel to this action, bifurcation under Rule 42(b) is inappropriate. Thus, the Defendant’s request is denied. I. PROCEDURAL BACKGROUND2 Steamfitters commenced this action against Mallinckrodt Ard LLC (“Mallinckrodt”) and UBC on July 12, 2019. (ECF No. 1.) The Complaint alleges various RICO and tort claims based

on Mallinckrodt and UBC’s “new strategy,” which, according to Plaintiff, created a RICO enterprise that resulted in Plaintiff, a third-party payor, paying a higher price for the drug Acthar. (Id. ¶ 7.) In October 2020, Mallinckrodt filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. (ECF No. 124 at 4); In re Mallinckrodt PLC, Case No. 1:20- bk-12522 (Bankr. D. Del.) (the “Bankruptcy Proceeding”). Plaintiff was a creditor in the Bankruptcy Proceeding. (ECF No. 124 at 20.) Plaintiff, along with other clients represented by Plaintiff’s attorney, Haviland Hughes, formed a group known as the Ad Hoc Acthar Group

2 The Court adopts the pagination supplied by the CM/ECF docketing system. (“AHAG”), which comprised third-party payors and their beneficiaries who participated in the Bankruptcy Proceeding. Bankruptcy Proceeding, Dkt. No. 3048 at 1; (ECF No. 124 at 4.) AHAG filed proofs of claims throughout the Bankruptcy Proceeding based on the same conduct that it sues for here. (ECF No. 123 at 3; ECF No. 129 at 9.)

On April 30, 2021, Attestor Limited and Humana Inc., insurance companies who pay for Acthar prescribed to their patients, jointly referred to in the Bankruptcy Proceeding as the Acthar Insurance Claimants (“AICs”), filed administrative claims against Mallinckrodt based on alleged violations of federal and state antitrust laws, violations of RICO, and other torts arising from Mallinckrodt’s alleged strategy to inflate the price of Acthar. (ECF No. 124 at 8–9; ECF No. 130 at 5.) On June 28, 2021, Plaintiff and other AHAG members filed a Motion for Leave to File Class Proof of Claim (the “Motion”) in the Bankruptcy Proceeding, which was based on previously filed claims that Mallinckrodt falsely inflated the price of Acthar. Bankruptcy Proceeding, Dkt. No. 3048; (ECF No. 124 at 9.) The Motion sought to authorize AHAG, which included Steamfitters, to file administrative class proofs of claim for post-petition Acthar expenditures. Bankruptcy

Proceeding, Dkt. No. 3048 ¶ 1. The Motion does not mention any administrative claims that Steamfitters filed against Mallinckrodt for post-petition conduct, but it does recount administrative claims other members of AHAG filed for post-petition conduct.3 Bankruptcy Proceeding, Dkt. No. 3048 at 2, 6; (ECF No. 123 at 4.) On August 2, 2021, Mallinckrodt filed its objections to the Acthar-related administrative claims; Mallinckrodt’s objected to the administrative claims asserted

3 Defendant correctly points to the fact that “Plaintiff and the other AHAG members filed a motion in the Bankruptcy Court to have ‘their rights to a class proof of claim for administrative claims decided by [the Bankruptcy Court].’” ECF No. 129 at 3. Although Steamfitters was included in this Motion as a member of the purported class that would file administrative proofs of claim for Acthar expenditures, it is not clear from that filing whether or not Steamfitters actually made any post-petition payments for Acthar. See Bankruptcy Proceeding, Dkt. No. 3048. The Motion was subsequently withdrawn. Bankruptcy Proceeding, Dkt. No. 3535. by the AICs and certain members of AHAG, which did not include Plaintiff. Bankruptcy Proceeding, Dkt. No. 3529; (ECF No. 124 at 9.) On August 3, 2021, the AHAG withdrew their Motion. Bankruptcy Proceeding, Dkt. No. 3535. On October 19, 2021, the Bankruptcy Court overruled Mallinckrodt’s objections and allowed the AICs’ administrative claims to proceed to

trial. Bankruptcy Proceeding, Dkt. No. 4792; (ECF No. 124 at 10.) The Bankruptcy Court noted that in addition to the AICs, there were third-party payors who initiated lawsuits, which would have included Steamfitters, and those plaintiffs were “not seeking to have administrative expense claims allowed here.” Bankruptcy Proceeding, Dkt. No. 4792 at 2 n.7. From November 8 through November 19, 2021, the Bankruptcy Court held a trial on the AICs’ administrative claims (the “AICs Trial”). Bankruptcy Proceeding, Dkt. No. 4792; (ECF No. 130 at 6; ECF No. 124 at 10.) On December 6, 2021, the Bankruptcy Court issued an oral bench ruling, finding that the AICs’ antitrust and RICO claims failed. (ECF No. 124 at 11.) On December 13, 2021, Plaintiff and other AHAG claimants filed a motion to withdraw their remaining proofs of claim in the Bankruptcy Court, which the Bankruptcy Court granted on March 30, 2022.

Bankruptcy Proceeding, Dkt. Nos. 5767, 6980 (ECF No. 124 at 12; ECF No. 123 at 3; ECF No. 123-4.)4 On December 21, 2021, the Bankruptcy Court issued its Opinion and Final Order confirming its findings from the December 6, 2021 oral bench ruling. In re Mallinckrodt PLC, 638 B.R. 57 (Bankr. D. Del.

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Steamfitters Local Union No. 420, individually and on behalf of all others similarly situated v. United Biosource Corporation, now known as United Biosource LLC, a wholly owned subsidiary of United Biosource Holdings, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/steamfitters-local-union-no-420-individually-and-on-behalf-of-all-others-paed-2025.