Walgreen Co. v. Johnson & Johnson

375 F. Supp. 3d 616
CourtDistrict Court, E.D. Pennsylvania
DecidedMarch 25, 2019
DocketCIVIL ACTION No. 18-2357
StatusPublished
Cited by1 cases

This text of 375 F. Supp. 3d 616 (Walgreen Co. v. Johnson & Johnson) 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
Walgreen Co. v. Johnson & Johnson, 375 F. Supp. 3d 616 (E.D. Pa. 2019).

Opinion

JOYNER, District Judge.

Before the Court are Defendants' Motion for Summary Judgment (Doc. No. 50), Plaintiffs' Opposition thereto (Doc. No. 54), Defendants' Reply in Support thereof (Doc. No. 56), and Plaintiffs' Sur-reply thereto (Doc. No. 57). For the reasons set forth below, we grant Defendants' Motion.

This case arises from Plaintiffs' Walgreen Co. and The Kroger Co. ("Retailer Plaintiffs") allegations that Defendants Johnson & Johnson and Janssen Biotech, Inc. (collectively "Janssen") ("J & J") violated federal antitrust laws through an anticompetitive scheme to exclude competition, maintain a monopoly over, and artificially inflate prices for Defendants' biologic infliximab drug, Remicade. Pl. Comp. ¶ 1. These allegations stem from facts set forth in this Court's Memorandums denying J & J's motion to dismiss Pfizer's complaint and denying in part J & J's motion to dismiss Direct and Indirect Purchasers' amended complaints. See *619Pfizer Inc. v. Johnson & Johnson, 333 F.Supp.3d 494 (E.D. Pa. 2018) ; Doc. No. 58. See Direct and Indirect Purchasers v. Johnson & Johnson, No. 17-cv-04326 and No. 18-cv-00303. In the instant case, Plaintiffs, indirect purchasers, allege that inflated prices for Remicade were passed on to them as overcharges on their purchases of the drug from pharmaceutical wholesalers ("Wholesalers"), AmerisourceBergen Drug Corporation and Cardinal Health, Inc. Wholesalers purportedly assigned to Plaintiffs their "rights" under their distributor agreements with JOM Pharmaceutical Services, Inc., a subsidiary of J & J.

At the heart of the dispute here is Defendants' argument that Plaintiffs lack antitrust standing because Wholesalers' purported assignment of "rights" under the Agreements was void pursuant to an anti-assignment provision. Plaintiffs maintain that their antitrust claims are not encompassed by the purported assignments, and may proceed.

I. Factual Background

The following facts are undisputed: Defendants manufacture and market Remicade. (Pl. Resp. to Def. Stmt. Facts at ¶ 2, Doc. No. 54-1). Plaintiffs purchase Remicade from AmerisourceBergen Drug Corporation ("Amerisource") and from Cardinal Health, Inc. ("Cardinal"), pharmaceutical wholesalers who purchase Remicade directly from Defendants. Id. at ¶ 5. Wholesalers' direct purchases of Remicade are governed by Distribution Agreements (together, "the Agreements") with JOM Pharmaceutical Services, Inc. ("JOM"). Id. at ¶ 6. The Agreements are governed by New Jersey law. Id. Section 4.4 of the Agreements between Wholesalers and Defendants each includes a non-assignment provision containing the following language:

Except as provided in this section, neither party may assign, directly or indirectly, this agreement or any of its rights or obligations under this agreement, either voluntarily or involuntarily (whether by merger, acquisition, consolidation, dissolution, operation of law, change of control or otherwise), without prior written consent of the other party....Any purported assignment in violation of this section will be void.

Def. Br. Exs. A and B, Doc. 50-3.

On January 23, 2018, Wholesalers purportedly assigned their claims against Defendants over alleged overcharges for Remicade to Plaintiffs. (Pl. Resp. to Def. Stmt. Facts at ¶ 10, Doc. No. 54-1 at 3). The purported assignment agreements stated, "[Amerisource] hereby conveys, assigns and transfers to Walgreens all of its rights, title and interest in and to all Direct Purchaser Claims it may have against Defendants under the antitrust laws of the United States." "[Cardinal] hereby conveys, assigns and transfers to Kroger all of its rights, title and interest in and to all Direct Purchaser Claims it may have against Defendants under the antitrust laws of the United States." Id.; See Def. Br. Exs. C and D.

On June 6, 2018, Plaintiffs filed the underlying action against Defendants. See Pl. Compl., Doc. No. 1. Plaintiffs' complaint asserts federal antitrust claims purportedly assigned to them by Wholesalers, in addition to asserting claims on their own behalf. (Pl. Resp. to Def. Stmt. Facts at ¶ 12, Doc. No. 54-1). On December 7, 2018, this Court denied Defendants' motion to dismiss Plaintiffs' direct purchaser antitrust claims (those that do not depend on assignments from Wholesalers). See Doc. No. 48, fn 2. Now, Plaintiffs concede that "their purchases of Remicade were indirect" and that any purchases not covered by a purported assignment "will not be *620included in [their] damages model." Pl. Opp. at 54.

In our December 7th, 2018 Order we also converted Defendants' motion to dismiss Plaintiffs' indirect purchaser antitrust claims (Doc. No. 36) into a summary judgment proceeding, pursuant to the Third Circuit's direction that "[i]f matters outside the bounds of the complaint are considered by the district court, the merits of the claim must be tested by way of motion for summary judgment." JM Mech. Corp. v. United States, 716 F.2d 190, 197 (3d Cir. 1983). The instant motion for summary judgment is fully briefed and ripe for the Court's adjudication, now that Plaintiffs have been afforded "a reasonable opportunity to present all material" pertinent under Fed. R. Civ. P. 56. See Doc. No. 48.

II. LEGAL STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). New Jersey law, which we find applicable to the issue of non-assignment provisions in the distributor Agreements in this case, instructs that "interpretation or construction of a contract is usually a legal question for the court, 'suitable for a decision on a motion for summary judgment.' " Driscoll Const. Co. v. State Dep't of Transp., 371 N.J.Super. 304, 853 A.2d 270, 276 (App. Div. 2004) (citation omitted).

"As to materiality.... [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505

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Bluebook (online)
375 F. Supp. 3d 616, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walgreen-co-v-johnson-johnson-paed-2019.