The opinion
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4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 STALEY, et al., Case No. 19-cv-02573-EMC
8 Plaintiffs,
ORDER GRANTING DEFENDANT
9 v. TEVA’S MOTION TO DISMISS
10 GILEAD SCIENCES, INC., et al., Docket No. 740
11 Defendants.
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14 The above-referenced antitrust case was initially brought by indirect purchasers – also
15 known as end-payor plaintiffs or “EPPs” – of certain cART drugs manufactured and/or sold by
16 Gilead, BMS, and Janssen.1 After the EPPs filed their case, different cases were brought by direct
17 purchasers – also known as direct-payor plaintiffs or “DPPs.”
18 • Two of the DPP suits are class actions: the named plaintiffs are FWK and KPH,
19 and they sued only Gilead and BMS. They did not sue Teva. See Nos. C-20-6793
20 EMC, C-20-6961 EMC.
21 • Two more DPP suits are not class actions: the plaintiffs are Walgreen et al. and
22 CVS et al., and they have sued Gilead, BMS, and Teva. See Nos. C-21-7374 EMC
23 and C-21-7378 EMC.2
24 Currently pending before the Court is a motion filed by Teva in the Walgreen and CVS
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1 The EPPs also sued another drug company, Japan Tobacco, but the Court granted its motion to
dismiss all claims against it.
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1 cases. Teva moves to dismiss part of the claims in those cases on the basis that they are time
2 barred. Specifically, Teva argues that the Walgreen and CVS plaintiffs – whom it refers to as the
3 “Retailers” collectively – cannot claim for statute-of-limitations purposes the benefit of the earlier
4 date that FWK/KPH filed their DPP suits because Teva was not named as a defendant in the
5 FWK/KPH suits.
6 Having considered the parties’ briefs and accompanying submissions, as well as the oral
7 argument of counsel, the Court hereby GRANTS Teva’s motion to dismiss.
8 I. FACTUAL & PROCEDURAL BACKGROUND
9 FWK filed its class action complaint against Gilead and BMS on September 29, 2020. See
10 No. C-20-6793 EMC. KPH filed its class action complaint against the same defendants soon
11 thereafter – on October 6, 2020. See No. C-20-6961 EMC. Both FWK and KPH mentioned Teva
12 as a conspirator in their class action complaints, see, e.g., FWK Compl. ¶ 284 et seq. (alleging that
13 Gilead and Teva schemed to delay the entry of Teva’s generics for Viread, Truvada, and Atripla,
14 all of which contain TDF), but did not sue the company. (The EPPs also did not sue Teva.)
15 The Walgreen and CVS plaintiffs did not file their respective individual suits until
16 approximately a year later, on September 22, 2021. See Nos. C-20-7374 EMC, C-20-7378 EMC.
17 Unlike FWK and KPH, the Walgreen and CVS plaintiffs did name Teva as a defendant. See, e.g.,
18 Walgreen Compl. ¶ 11 (alleging that “Defendants deliberately and unlawfully delayed generic
19 competition for life-saving TDF-based products, including Viread, Truvada and Atripla, by
20 entering into anticompetitive settlement agreements” and, “[a]s a result, Gilead and Teva,
21 individually and collectively, were able to retain hundreds of millions of dollars in anticompetitive
22 profits”).
23 Both the Walgreen and CVS plaintiffs included in their complaints the following paragraph
24 regarding the statute of limitations:
25 Plaintiffs are members of the putative class on whose behalf a class
action was filed on September 29, 2020. See FWK Holdings, LLC v.
26 Gilead Sciences, Inc. et al., Case No. 3:20-cv-06793-EMC (N.D.
Cal.). The filing of that action tolled the statute of limitations
27 applicable to Plaintiffs’ assigned claims [under American Pipe &
that is higher than it would otherwise be as a result of an antitrust
1 violation. Thus, without the benefit of any tolling doctrine other
than class action tolling, Plaintiffs are entitled to recover
2 overcharges on purchases made within the four years prior to
the filing of the FWK Holdings case – i.e., on all purchases of the
3 Relevant Drugs or their generic equivalents made on or after
September 29, 2016.
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5 Walgreen Compl. ¶ 288 (bold and italics added); see also CVS Compl. ¶ 286. Teva argues that the
6 Walgreen and CVS plaintiffs cannot rely on the earlier filed suits and instead can only reach back
7 to the four years prior to the filing of their own complaint – i.e., to September 22, 2017 – since
8 Teva was not a defendant in the FWK/KPH cases. In response, the Walgreen and CVS plaintiffs
9 contend that “the class action tolling doctrine extend[s] the applicable limitations period when a
10 later-filed non-class action names a defendant that was identified as a co-conspirator but not a
11 defendant in the earlier-filed class action.” Opp’n at 2 (emphasis added).
12 II. DISCUSSION
13 A. Legal Standard
14 Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include “a short and plain
15 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A
16 complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil
17 Procedure 12(b)(6). See Fed. R. Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss
18 after the Supreme Court’s decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic
19 Corp. v. Twombly, 550 U.S. 544 (2007), a plaintiff’s “factual allegations [in the complaint] ‘must .
20 . . suggest that the claim has at least a plausible chance of success.’” Levitt v. Yelp! Inc., 765 F.3d
21 1123, 1135 (9th Cir. 2014). The court “accept[s] factual allegations in the complaint as true and
22 construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St.
23 Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But “allegations in a
24 complaint . . . may not simply recite the elements of a cause of action [and] must contain sufficient
25 allegations of underlying facts to give fair notice and to enable the opposing party to defend itself
26 effectively.” Levitt, 765 F.3d at 1135 (internal quotation marks omitted). “A claim has facial
27 plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
1 plausibility standard is not akin to a probability requirement, but it asks for more than a sheer
2 possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted).
3 In the instant case, Teva has raised the statute of limitations as a bar to part of the
4 Walgreen and CVS plaintiffs’ claims. An assertion of a time bar is an affirmative defense, and a
5 plaintiff “ordinarily need not ‘plead on the subject of an anticipated affirmative defense.’” Rivera
6 v. Peri & Sons Farms, Inc., 735 F.3d 892, 902 (9th Cir. 2013). However, if “an affirmative
7 defense is obvious on the face of a complaint, . . . a defendant can raise that defense in a [12(b)(6)]
8 motion to dismiss.” Id. “If the statute of limitation appears to have run, the plaintiff bears the
9 burden of alleging facts which would give rise to tolling.” Williams v. Aserraderos Arauco, SA,
10 No. 12-CV-04912-WHO, 2015 WL 2228794, at *2 (N.D. Cal. May 12, 2015). Here, the statute-
11 of-limitations defense for damages accruing before September 22, 2017, is obvious. The
12 Walgreen and CVS plaintiffs’ reliance on American Pipe tolling places the issue before the Court.
13 B. American Pipe Tolling
14 In American Pipe, the Supreme Court held that “the commencement of a class action
15 suspends the applicable statute of limitations as to all asserted members of the class who would
16 have been parties had the suit been permitted to continue as a class action.” Am. Pipe, 94 S. Ct. at
17 554. In the case at bar, the Walgreen and CVS plaintiffs note that they are members of the
18 FWK/KPH actions; thus, they contend, they are entitled to the benefit of American Pipe, which, as
19 a practical matter, means that they can reach back four years from the time that the FWK/KPH
20 class actions were filed.
21 Teva disagrees, pointing out that it was not a named defendant in the FWK/KPH actions.
22 The Walgreen and CVS plaintiffs respond that this is immaterial because it is clear that FWK and
23 KPH alleged Teva was a co-conspirator with Gilead (regardless of whether one considers the
24 original complaints or the operative complaint at Docket No. 5593). The plaintiffs add that Teva
25 has participated in the other related lawsuits (both EPP and DPP class actions) by providing
26 discovery as a third party and thus it should be no surprise to Teva that it has been pulled into the
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1 Walgreen and CVS plaintiffs’ actions as a named defendant.
2 There is case law to support Plaintiffs’ position – specifically, two cases issued by Judge
3 Illston. See In re TFT-LCD (Flat Panel) Antitrust Litig., 2012 WL 3155693, at *3 (N.D. Cal.
4 Aug. 2, 2012) (holding statute of limitations was tolled as to defendants who “were named as
5 defendants or coconspirators in the class actions” but not as to defendants who were not
6 “specifically name[d]” in the complaint) (emphasis added); Tech Data Corp. v. AU Optronics
7 Corp., 2012 WL 3236065, at *5 (N.D. Cal. Aug. 6, 2012) (noting that “[t]his Court has previously
8 refused to toll claims against various NEC entities based on claims against other NEC entities in
9 this MDL, stating that ‘claims were only tolled to the extent NEC entities were named as
10 defendants or coconspirators in the class actions’”) (emphasis added). However, the Walgreen
11 and CVS plaintiffs have not identified any other authority to support their position, nor has the
12 Court been able to find any other authority based on its own independent research. Furthermore,
13 Judge Illston did not provide any underlying reasoning or case authority in her decisions.
14 The Court respectfully disagrees with Judge Illston’s decisions. In American Pipe, the
15 Supreme Court allowed for tolling of putative class members’ claims largely in recognition of the
16 fact that a class action is designed to promote efficiency and a desire to avoid multiplicity of
17 activity by class members. In particular, the Court noted that, after the 1966 amendment to Rule
18 23 – which was intended in part to address the problem of multiple interventions sought by class
19 members pending formal certification – a class action is not “‘an invitation to joinder’ but a truly
20 representative suit designed to avoid, rather than encourage, unnecessary filing of repetitious
21 papers and motions.” Id. at 550. Accordingly, the filing of a class action “satisfie[s] the purpose
22 of the [statute of] limitation provision as to all those who might subsequently participate in the suit
23 as well as for the named plaintiffs”; to hold otherwise would mean that class members would have
24 to “file earlier individual motions to join or intervene as parties – precisely the multiplicity of
25 activity which Rule 23 was designed to avoid.” Id. at 551. The Court’s concern in American
26 Pipe was the plaintiff’s side of the equation, not the defendant’s. To be sure, the Supreme Court
27 did take note of the defendant’s interest in ruling that the limitations period was tolled for
1 See id. at 554 (stating that the holding of the case was not “inconsistent with the functional
2 operation of a statute of limitations”; the filing of a class action gives a defendant notice of claims
3 being brought not only by the named plaintiff but also by unnamed class members). But that note
4 was a secondary concern, not the core rationale for its tolling ruling. Thus, American Pipe cannot
5 be fairly read to toll claims against an unnamed defendant.4
6 In addition, there are independent reasons that counsel against an extension of American
7 Pipe to an unnamed defendant, even one who is allegedly a co-conspirator of a named defendant.
8 For example, unlike a defendant who gets notice of a complaint at the outset of a lawsuit, a co-
9 conspirator may not get notice of a lawsuit at all – at the very least, not until the suit is brought to
10 its attention such as when discovery is sought from it by subpoena. And even if, e.g., discovery
11 were requested from an unnamed co-conspirator, that unnamed defendant would have to evaluate
12 whether the allegations made against it in the complaint are serious and specific enough such that
13 the co-conspirator should expect it will be required to defend a future lawsuit even though it was
14 not named in the first suit. This fact-intensive, case-by-case analysis of the sufficiency of such
15 notice would render application of tolling complicated and subtle, defying any bright line. In
16 short, for notice purposes, there is a material difference between being sued and not being sued.
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4 Notice of the risk of being sued (evidenced by being named but not sued as a co-conspirator in
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one suit) in and of itself cannot serve to toll the statute of limitations. Otherwise, a pre-suit letter
threatening litigation could toll the statute of limitations. The Walgreen and CVS plaintiffs
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conceded at the hearing that pre-suit notice alone is not sufficient; instead, they pin their argument
on the fact that this is a class action. But the fact that the first suit is a class action says nothing
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about notice to the unnamed party that it is likely to be sued. Indeed, the fact that the first suit is a
1 III. CONCLUSION
2 For the foregoing reasons, the Court grants Teva’s motion to dismiss. As to Teva, the
3 Walgreen and CVS plaintiffs are not entitled to claim the benefit of the earlier date that FWK/KPH
4 filed their DPP suits because Teva was not named as a defendant in the FWK/KPH suits.
5 This order disposes of Docket No. 740.
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7 IT IS SO ORDERED.
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9 Dated: January 13, 2022
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11 ______________________________________
EDWARD M. CHEN
12 United States District Judge
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