The opinion
In re: Seroquel XR (Extended Release Quetiapine
Fumarate) Litigation
Lead Dkt. No. 19-cv-8296 (CM)
All End-Payor Class Actions
ORDER GRANTING DEFENDANTS’ MOTION TO TRANSFER
McMahon, C.J.:
In this class action, eight1 end-payor purchaser plaintiffs (“EPPs”) bring a consolidated
antitrust class action on behalf of themselves, and all others similarly situated, against Defendants
AstraZeneca Pharmaceuticals L.P. and AstraZeneca L.P. (collectively, “AstraZeneca”),
AstraZeneca UK Limited (“AZ UK”), Handa Pharmaceuticals, LLC (“Handa”), and Par
Pharmaceutical, Inc. (“Par”) (collectively, “Defendants”) for their allegedly anticompetitive
behavior in violation of various state laws. (See Consolidated Am. Compl. (“CAC”) at 1, Dkt. No.
46.) This action arises from the same facts as the lead direct purchaser class action, JM Smith
Corporation v. AstraZeneca Pharmaceuticals L P et al., No. 19-cv-7233 (the “DPP Case” or “DPP
Dkt.”).
Defendants AstraZeneca, AZ UK, Handa, and Par move to dismiss for lack of jurisdiction,
improper venue, or in the alternative, to transfer this action to the District of Delaware. (Dkt. No.
107.)
For the reasons stated below, Defendants’ motion to transfer is GRANTED.
1 Per the stipulation so-ordered October 2, 2019, any later-filed end-payor actions are deemed part of the Consolidated
Amended Complaint (“CAC,” Dkt. No. 46) and consolidated unless an objection is filed and sustained. (Dkt. No. 45
at ¶ 3.) Two actions were subsequently filed, without objection, and thus are subsumed by the CAC: NECA-IBEW
Welfare Trust Fund v. AstraZeneca Pharmaceuticals L.P. et al, 19-cv-09171, and The Uniformed Firefighters’
Association of Greater New York Security Benefit Fund v. AstraZeneca Pharmaceuticals L.P. et al, 19-cv-09271 (the
“UFA Action” or “UFA Dkt.”). Plaintiff NECA-IBEW Welfare Trust Fund has since voluntarily dismissed all of its
claims against Defendants by notice dated January 10, 2020. (Dkt. No. 123.)
BACKGROUND
A. Parties
EPP Fraternal Order of Police, Miami Lodge 20, Insurance Trust Fund (“FOP”) is a
governmental plan for current and retired sworn officers from the City of Miami Police
Department and their dependents. (CAC ¶ 34.) FOP is a Florida citizen and maintains its principal
place of business in Miami, Florida. (Id.)
EPP Law Enforcement Health Benefits (“LEHB”) is a voluntary employee benefits plan
organized pursuant to Section 501(c) of the Internal Revenue Code to provide health benefits to
its eligible participants and beneficiaries – current and retired sworn Philadelphia Police officers,
Deputy Sheriffs, and County Detectives, and their dependents. (Id. ¶ 35.) LEHB’s principal place
of business is in Philadelphia, Pennsylvania. (Id.)
EPP the Mayor and City Council of Baltimore is a municipality located in Baltimore,
Maryland. (Id. ¶ 36.)
EPP Pipe Trades Services MN Welfare Fund (“Pipe Trades Fund”) is a Taft-Hartley fund
authorized under Section 302 (c)(5) of the National Labor Relations Act and an employee welfare
benefit plan as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974
(“ERISA”) 29 U.S.C. §1001 et seq. that provides benefits to its plan members, their spouses, and
dependents. (Id. ¶ 37.) Pipe Trades Fund’s principal place of business is in White Bear Lake,
Minnesota. (Id.)
EPP Sergeants Benevolent Association Health & Welfare Fund (“SBA”) was established
for the purpose of providing prescription drug benefits to active and retired New York City Police
Department Sergeants and their dependents. (Id. ¶ 38.) SBA is located in New York. (Id.)
EPP the Welfare Plan of the International Union of Operating Engineers Locals 137, 137A,
137B, 137C, and 137R (“IUOE”) is a multi-employer health and welfare fund. (Id. ¶ 39.) IOUE is
located in Briarcliff Manor, New York. (Id.)
EPPs the Uniformed Firefighters Association of Greater New York Security Benefit Fund
and the Retired Firefighter Security Benefit Fund of the Uniformed Firefighters Association
(collectively, the “UFA Funds”) are health and welfare benefit plans headquartered in New York,
New York. (UFA Dkt. No. 5 ¶ 33.) The UFA Funds administer the assets of a defined contribution
plan formed by a collective bargaining agreement between the City of New York and the
Uniformed Firefighters Association. They provide benefits to approximately 35,000 beneficiaries
who reside in numerous locations in the United States. (Id.)
Defendant AstraZeneca L.P. was a Delaware limited partnership headquartered in
Wilmington, Delaware. It was dissolved on December 31, 2018, and all of its assets and liabilities
were assumed by AstraZeneca Pharmaceuticals L.P. (Aff. of Matthew Bowden ¶¶ 4-5, Dkt. No.
107-7.)
Defendant AstraZeneca Pharmaceuticals L.P. is a Delaware limited partnership
headquartered in Wilmington, Delaware. (CAC ¶ 40.)
Defendant AZ UK is an English corporation headquartered in London, United Kingdom.
(Id. ¶ 41.)
Defendant Handa is headquartered in San Jose, California. (Id. ¶ 44.) While the EPPs allege
that Handa is a California corporation (id.), Handa explains that while it was formerly a California
LLC, in September 2016 Handa was registered as a Delaware LLC and is presently incorporated
in Delaware. (Aff. of Stephen D. Cary ¶¶ 3, 8, Dkt. No. 107-9.)
Defendant Par is a Delaware corporation headquartered in Chestnut Ridge, New York.
(CAC ¶ 45.) Prior to March 2015, Par maintained its principal place of business in Woodcliff Lake,
New Jersey. (See Decl. of Terrell T. Stevens, Dkt. No. 120-1.)
B. Nature of the Action
This consolidated class action arises from two alleged conspiracies between and among
Defendants to delay and suppress competition for generic versions of AstraZeneca’s branded
quetiapine fumarate extended-release tablets, Seroquel XR®. Each EPP indirectly purchased, paid
and/or reimbursed for some or all of the purchase price for one or more Seroquel XR and its AB-
rated generic equivalent in class state(s) during the class period – from September 29, 2011 until
the anticompetitive effects of Defendants’ challenged conduct cease. (CAC ¶¶ 34-39, 227; UFA
Dkt. No. 5 ¶ 33). Since this action based on identical facts as the DPP Case, I will not recite the
facts at length here. (See DPP Dkt. No. 90 at pp. 2-4.)
In short, generics manufacturers Handa and Accord Pharmaceuticals, Inc. (“Accord”) were
the first to file Abbreviated New Drug Applications (“ANDAs”) for different strengths of generic
Seroquel XR. (CAC ¶ 3.) AstraZeneca filed lawsuits against Handa and Accord in the District of
New Jersey, alleging that their ANDAs infringed AstraZeneca’s patent that protected Seroquel
XR. (Id. ¶¶ 6-10.) Around October 1, 2011, AstraZeneca entered into two settlement agreements
– one with Handa (which was assigned to Par in 2012), and the other with Accord. Under the
settlement agreements, Handa and Accord agreed to delay their launches of generic Seroquel XR
(in the strengths covered by their respective ANDAs) until November 1, 2016, and AstraZeneca
agreed not to launch an authorized generic (“AG”) Seroquel XR until May 1, 2017. (Id. ¶¶ 15-23.)
The EPPs allege that the settlement agreements delayed generic competition with branded
Seroquel XR for up to five years and eliminated competition between the Handa/Par’s and
Accord’s first-filed generics and AstraZeneca’s AGs for 180 days thereafter. The presence of
additional generics would have resulted in lower prices. (Id. ¶ 18, 24.) Accordingly, the EPPs and
members of the putative class would have been able to satisfy their requirements for extended-
release quetiapine fumarate at significantly lower prices substantially earlier. (Id. ¶ 26.)
The EPPs assert various state antitrust and consumer protection causes of action against
Defendants on their own behalf and on behalf of similarly situated persons and entities in forty
states, Puerto Rico, and the District of Columbia who indirectly purchased, paid and/or provided
reimbursement for some or all of the purchase price of brand or generic Seroquel XR, other than
for resale, at any time during the period from September 29, 2011 (when AstraZeneca and Handa
settled the patent litigation) through and until the anticompetitive effects of Defendants’
challenged conduct cease. (Id. ¶ 227). Other generic competitors launched their own versions of
generic extended release quetiapine fumarate in all strengths in or around May 2017. (Id. ¶ 22.)
Specifically, the EPPs assert five causes of action under various state laws:
(I) monopolization against AstraZeneca; and against all Defendants, (II) conspiracy to
monopolize; (III) combination and conspiracy in restraint of trade; (IV) unfair or deceptive trade
practices; and (V) unjust enrichment. (See CAC ¶¶ 237-300.)
C. Procedural Posture
Defendants filed the same motion to dismiss in this case and the DPP Case. (See Dkt. No.
107; DPP Dkt. No. 68.) The EPPs have not submitted their own briefing on this motion; rather,
they incorporate by reference all arguments in the opposition filed by the named plaintiff in the
DPP Case, J M Smith Corporation d/b/a, Smith Drug Company (“Smith”) (Smith Opp’n, DPP Dkt.
No. 73). (See EPP Opp’n, Dkt. No. 116 at 3.)
By this court’s order dated August 11, 2020, the DPP Case was transferred to the District
of Delaware. (DPP Dkt. No. 90 (“Transfer Order.”)) The Transfer Order turned largely on a valid
and enforceable forum selection clause in contracts between AstraZeneca and Smith. In this
indirect purchaser action, Defendants cannot rely on any contracts between AstraZeneca and the
EPPs. Nevertheless, transfer is warranted under § 1404(a).
For the reasons stated below, Defendants’ motion to transfer is GRANTED.
ANALYSIS
In this case, as in the DPP Case, it is prudent to address the motion to transfer before dealing
with the contested issue of personal jurisdiction because all Defendants are either subject to general
personal jurisdiction in the District of Delaware, or consent to such jurisdiction for the purposes
of this case. See Leroy v. Great W. United Corp., 443 U.S. 173, 180 (1979); Basile v. Walt Disney
Co., 717 F. Supp. 2d 381, 385 (S.D.N.Y. 2010). Accordingly, this court will address Defendants’
motion to transfer first.
Under 28 U.S.C. § 1404(a), “For the convenience of parties and witnesses, in the interest
of justice, a district court may transfer any civil action to any other district or division where it
might have been brought or to any district or division to which all parties have consented.”
In the Second Circuit, when considering a motion to transfer pursuant to § 1404(a), courts
generally apply a two-step analysis. First, the court must determine whether the action could have
been brought in the proposed transferee forum. If so, the court must determine whether the
convenience of the parties and witnesses and the interests of justice favor transfer. See P.E.A.
Films, Inc. v. Metro-Goldwyn-Mayer, Inc., No. 14-cv-726, 2014 WL 6769377, at *1 (S.D.N.Y.
Nov. 12, 2014) (internal quotations and citations omitted).
At step one, the EPPs do not contest that this case could have been brought in the District
of Delaware. Each Defendant is subject to personal jurisdiction in Delaware: AstraZeneca
Pharmaceuticals L.P., Par, and Handa are incorporated in Delaware, and AZ UK consents to
jurisdiction in Delaware for the purposes of this action.
At step two, Defendants bear the burden of making a “clear and convincing” showing that
transfer is proper. See New York Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d 102,
114 (2d Cir. 2010). Courts consider the following factors under § 1404(a):
(1) the plaintiff’s choice of forum, (2) the convenience of witnesses, (3) the location of
relevant documents and relative ease of access to sources of proof, (4) the convenience of
parties, (5) the locus of operative facts, (6) the availability of process to compel the
attendance of unwilling witnesses, . . . (7) the relative means of the parties . . . (8) the
forum’s familiarity with the governing law, and (9) trial efficiency and the interest of
justice.
Pence v. Gee Grp., Inc., 236 F. Supp. 3d 843, 850 (S.D.N.Y. 2017) (internal citations and quotations
omitted). Here, the balance of these factors favors transfer to the District of Delaware.
A. Plaintiff’s Choice of Forum
Generally, courts give a plaintiff’s choice of forum “considerable weight.” See Everlast
World’s Boxing Headquarters Corp. v. Ringside, Inc., 928 F. Supp. 2d 735, 748 (S.D.N.Y. 2013).
Several of the EPPs – SBA, IOUE, and the UFA Funds – are located in the Southern District of
New York. Moreover, there is some connection between the operative facts and this district based
the alleged overpayments by these New York-based EPPs.
However, the four remaining EPPs are not citizens of this district. They hale from Florida,
Pennsylvania, Maryland, and Minnesota. The fact that plaintiffs are not citizens of nor have any
particular connection to their chosen forum “diminishes the deference afforded [their] choice to
litigate here.” City of Pontiac Gen. Employees Ret. Sys. v. Dell Inc., No. 14-cv-3644, 2015 WL
12659925, at *4 (S.D.N.Y. Apr. 30, 2015) (citing Zepherin v. Greyhound Lines Inc., 415 F. Supp.
2d 409, 411 (S.D.N.Y. 2006)). As noted in the Transfer Order, any connection to this district based
on Par’s Rockland County operations is minimal because Par is a Delaware corporation.
Moreover, all EPPs in this action seek to represent a class of entities from forty states, the
District of Columbia, and Puerto Rico. This “further diminishes the deference afforded [plaintiffs’]
choice of forum” – even as to the New York-based EPPs. City of Pontiac, 2015 WL 12659925, at
*4 (citing In re Nematron Corp. Sec. Litig., 30 F. Supp. 2d 397, 405 (S.D.N.Y. 1998)). The EPPs’
choice of forum “‘is afforded little weight’ in a purported class action, as here, where ‘numerous
potential plaintiffs [are] each possibly able to make a showing that a particular forum is best
suited.’” Freeman v. Hoffmann-La Roche Inc., No. 06-cv-13497, 2007 WL 895282, at *3
(S.D.N.Y. Mar. 21, 2007) (quoting Eichenholtz v. Brennan, 677 F. Supp. 198, 202 (S.D.N.Y.
1988)).
Here, the EPPs’ choice of forum weighs in favor of transfer, but is afforded only “little
weight.”
B. Convenience of the Witnesses
As noted in the Transfer Order, neither side specifies the key witnesses to be called or states
what their testimony will cover. Where, as here, Defendants seek transfer on account of several
factors, their “failure to specify key witnesses and their testimony is not fatal.” Pence, 236 F. Supp.
3d at 856. In any event, both potential venues are located in the Northeastern United States along
a major transportation corridor, which minimizes any difference in convenience.
However, this court has already transferred the DPP Case to the District of Delaware. The
testimony of most – if not all – AstraZeneca, Handa, Par, and Accord witnesses will pertain equally
to Smith’s claims in the DPP Case and the EPPs’ claims in this action. “[T]hose witnesses will be
spared much inconvenience by being called to testify in a single trial in a single location.” Bent v.
Zounds Hearing Franchising, LLC, No. 15-cv-6555, 2016 WL 153092, at *7 (S.D.N.Y. Jan. 12,
2016) (citing DISH Network, L.L.C. v. Am. Broad. Companies, Inc., No. 12-cv-4155, 2013 WL
1091318, at *3 (S.D.N.Y. Mar. 15, 2013)). Accordingly, this factor weighs in favor of transfer.
See id.
C. Convenience of the Parties
As noted above, several EPPs are located in the Southern District of New York; the others
are located in Florida, Pennsylvania, Maryland, and Minnesota. Similarly, AstraZeneca is located
in Delaware, Par is located in New York, and the other Defendants are located in California and
the United Kingdom. Most parties would have to travel whether this case was heard in New York
City or Wilmington.
However, “trying all claims in a common forum is far more efficient than bifurcating
them,” such that transfer to Delaware would greatly enhance Defendants’ convenience without
meaningfully adding to the EPPs’ inconvenience. See Bent, 2016 WL 153092, at *7.
Here, the relative convenience of the parties slightly favors transfer.
D. Trial Efficiency and the Interest of Justice
Turning to the public interest factors, as explained in the Transfer Order, Smith did not
persuade this court that justice demanded that the DPP Case remain in the Southern District of
New York. Smith’s arguments are no more persuasive here. The alleged scheme that gives rise to
this action – which purportedly has reached forty states, the District of Columbia, and Puerto Rico
– is hardly a “localized controversy.” The fact that the District of Delaware is busier than this
already-busy district carries only marginal relevance.
Rather, the public interest weighs heavily in favor of transfer. In the Second Circuit, “there
is a strong policy favoring the litigation of related claims in the same tribunal in order that pretrial
discovery can be conducted more efficiently, duplicitous litigation can be avoided, thereby saving
time and expense for both parties and witnesses, and inconsistent results can be avoided.” Goggins
v. All. Capital Mgmt., L.P., 279 F. Supp. 2d 228, 234 (S.D.N.Y. 2003) (quoting Wyndham Assocs.
v. Bintliff, 398 F.2d 614, 619 (2d Cir. 1968), cert. denied, 393 U.S. 977 (1968)); see also Everlast,
928 F. Supp. 2d at 747. Moreover, “Courts have routinely recognized this principle in granting
transfers under section 1404 where related claims were already proceeding in another district or
had to be transferred to another district pursuant a forum selection clause.” Pence, 236 F. Supp. 3d
at 854 (collecting cases).
This court has transferred the DPP Case – as well as three related direct purchaser cases –
to the District of Delaware based on mandatory forum selection clauses in AstraZeneca’s contract
with Smith and other wholesalers. There is all but complete overlap in the allegations made by the
EPPs here and those made by Smith in the DPP Case. See Goggins, 279 F. Supp. 2d at 234.
(Compare Part VI, Facts, CAC ¶¶ 115-79 with Part VI, Factual Allegations, DPP Compl., DPP
Dkt. No. 1 ¶¶ 85-147.) The only way to ensure that all related cases are litigated in a single forum
– thereby avoiding duplicative discovery, wasted time and expense by parties and witnesses, and
the risk of inconsistent results – is to transfer this action to the District of Delaware.
The interest of justice weighs heavily in favor of transfer.
E. Remaining Factors
Defendants concede that many of the remaining factors – the location of documents and
ease of access to sources of proof, the relative means of the parties, the forum’s familiarity with
the governing law – are irrelevant.
In sum, the private interest factors point in different directions: the EPPs’ choice of forum
somewhat favors this district, while the convenience of the witnesses and the parties favors
transfer. The public interest weighs decisively in favor of transfer. “There is no rigid formula for
balancing these factors and no single one of them is determinative. Instead, weighing the balance
is essentially an equitable task left to the Court’s discretion.” Citigroup Inc. v. City Holding Co.,
97 F.Supp.2d 549, 561 (S.D.N.Y. 2000) (citations and internal quotation marks omitted). Here, the
balance tips toward transfer.
This court finds that transfer of this consolidated class action is warranted under § 1404(a).
CONCLUSION
Defendants’ motion to transfer this action to the District of Delaware is GRANTED. This
constitutes the decision and order of the court. It is a "written opinion.” The Clerk of Court is
respectfully directed to close the open motion at Dkt. No. 107 and transfer this action to the United
States District Court for the District of Delaware.
Dated: August 12, 2020 J fa ) ] yo
New York, New York / (Ahern Ye .
Chief Judge
BY ECF TO ALL PARTIES
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