The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
KING DRUG CO. OF FLORENCE, et : CIVIL ACTION
al. :
:
v. :
:
ABBOTT LABORATORIES, et al. : NO. 19-3565
MEMORANDUM
Bartle, J. January 6, 2020
This is a civil antitrust action alleging
anticompetitive conduct by defendants related to a
pharmaceutical product, AndroGel. Plaintiffs are wholesalers
which allege they were denied the opportunity to purchase
lower-priced generic versions of AndroGel due to the alleged
anticompetitive conduct and thereby suffered overcharges.
Before the court is the motion of defendants to transfer venue
of this action to the United States District Court for the
Northern District of Georgia pursuant to 28 U.S.C. § 1404(a).
I
The complaint alleges that defendant AbbVie engaged in
a scheme from at least 2007 to 2014 to delay and to exclude generic
competition for its blockbuster drug AndroGel. AndroGel is a
brand-name transdermal testosterone gel product approved by the FDA
for the treatment of hypogonadism, a clinical syndrome that results
from failure of a man’s body to produce adequate amounts of
testosterone.
Plaintiffs are King Drug Co. of Florence, Inc. (“King
Drug”), AmerisourceBergen Corp. and AmerisourceBergen Drug Corp.
(collectively, “AmerisourceBergen”), Bellco Drug Co. (“Bellco”),
H.D. Smith LLC (“H.D. Smith”), Cardinal Health, Inc. (“Cardinal”),
Harvard Drug Group, LLC (“Harvard Drug”), McKesson Corp.
(“McKesson”), J.M. Smith Corp. d/b/a/ Smith Drug Co. (“J.M Smith”),
Burlington Drug Co., Inc. (“Burlington”), North Carolina Mutual
Wholesale Drug Co. (“North Carolina Mutual”), Dakota Drug Inc.
(“Dakota”), Value Drug Co. (“Value Drug”), and FWK Holdings, LLC
(“FWK”). Defendants are AbbVie Inc., AbbVie Products LLC, Abbot
Laboratories, and Unimed Pharmaceuticals LLC (collectively,
“AbbVie”), Besins Healthcare, Inc. (“Besins”), Actavis, Inc. and
Actavis Holdco U.S. (collectively, “Actavis”), Par Pharmaceutical,
Inc. and Paddock Laboratories, Inc. (collectively, “Par/Paddock”),
and Teva Pharmaceuticals USA, Inc. (“Teva”). The complaint alleges
the following claims: (1) the unlawful maintenance and extension
of a monopoly through an overarching conspiracy in violation of 15
U.S.C. § 2 against AbbVie (Count I); (2) an anticompetitive reverse
payment agreement in violation of 15 U.S.C. § 1 against AbbVie and
Actavis (Count II); (3) an anticompetitive reverse payment
agreement in violation of 15 U.S.C. § 1 against AbbVie and
Par/Paddock (Count III); (4) the unlawful maintenance and extension
of a monopoly through sham litigation in violation of 15 U.S.C. § 2
against AbbVie and Besins (Count IV); and (5) an anticompetitive
reverse payment agreement in violation of 15 U.S.C. § 1 against
AbbVie and Teva (Count V).
Unimed Pharmaceuticals, a successor of AbbVie, and an
affiliate of defendant Besins, jointly developed AndroGel 1% in the
1990s. The FDA approved AndroGel 1% in 2000 and Solvay
Pharmaceuticals, Inc., which had acquired Unimed and was later
acquired by AbbVie, began marketing AndroGel. Solvay and Unimed
were headquartered in Marietta, Georgia.
In 2003, the United States Patent Office issued the ‘894
patent relating to AndroGel to Unimed and Besins. Soon thereafter,
Unimed and Besins filed patent infringement lawsuits in the
Northern District of Georgia against Watson Pharmaceuticals, Inc.
and Paddock, based on Watson and Paddock’s filing of Abbreviated
New Drug Applications (“ANDAs”) requesting approval from the United
States Food and Drug Administration (“FDA”) to market a generic
version of AndroGel 1%. See 21 U.S.C. § 355(j). Par was later
added to the lawsuits. The patent lawsuits were assigned to The
Honorable Thomas W. Thrash, Jr. In September 2006, while motions
for summary judgment were pending, the parties settled. As part of
each settlement, Solvay agreed to license Watson and Par to launch
generic versions of AndroGel 1% in August 2015, five years before
expiration of the ‘894 patent. The parties also entered into an
agreement whereby Solvay hired Watson, Paddock, and Par to provide
promotion and/or manufacturing services for AndroGel.
On January 27, 2009, the Federal Trade Commission
(“FTC”) brought an antitrust suit against Solvay, Watson, and
Par/Paddock concerning the reverse payments to Watson and
Par/Paddock in the United States District Court for the Central
District of California. The FTC action against Solvay, Watson, and
Par/Paddock precipitated a wave of private antitrust litigation
based on the same allegations. Shortly thereafter, on February 2,
2009, a direct purchaser of AndroGel, Meijer Inc. and Meijer
Distribution, Inc. (collectively, “Meijer”) filed a putative class
action complaint in that district. The next day, direct purchasers
Rochester Drug Cooperative, Inc. (“RDC”) and Louisiana Wholesale
Drug Co. (“LWD”) each filed putative class action complaints.
On April 8, 2009, the court in the Central District of
California granted the defendants’ motion to transfer venue of the
FTC action and the putative class actions to the Northern District
of Georgia pursuant to § 1404(a). See F.T.C. v. Watson Pharm.,
Inc., 611 F. Supp. 2d 1081, 1084 (C.D. Cal. 2009). The court
determined that the Northern District of Georgia, where the
underlying patent suits were litigated and settled, was a more
convenient forum for the actions. Id. at 1090.
In June 2009, Rite Aid Corp. and several other retailers
of AndroGel filed two antitrust actions challenging the 2006
reverse payment agreements with Watson and Par/Paddock in the
Middle District of Pennsylvania. Three consumers also filed
purported class actions in the District of New Jersey. See Stephen
L. LaFrance Pharmacy, Inc. v. Unimed Pharm., Inc., No. 09-1507,
2009 WL 3230206, at *1 (D.N.J. Sept. 30, 2009). The three consumer
antitrust actions were transferred to the Northern District of
Georgia pursuant to § 1404(a).1 Id. Thereafter, the Judicial
Panel on Multidistrict Litigation created a multidistrict
litigation (“MDL”) in the Northern District of Georgia to
coordinate for pretrial proceedings pursuant to 28 U.S.C. § 1407
the Middle District of Pennsylvania actions with those pending in
the Northern District of Georgia and a related action in the
District of Minnesota. See In re Androgel Antitrust Litig., 655 F.
Supp. 2d 1351, 1352 (U.S. Jud. Pan. Mult. Lit. 2009). Thereafter,
on May 8, 2015, Giant Eagle Inc. (“Giant Eagle”), another retailer
of AndroGel, filed an antitrust action in the Western District of
Pennsylvania which was subsequently transferred to the Northern
District of Georgia MDL.
Since the transfer to the Northern District of Georgia
of these actions, Judge Thrash has presided over extensive
discovery and litigation. Judge Thrash initially dismissed the
reverse payment claim asserted by the FTC. See In re Androgel
1. The consumer plaintiffs later unilaterally dismissed their
claims.
Antitrust Litig., 687 F. Supp. 2d 1371, 1379 (N.D. Ga. 2010). His
decision was later overturned by the Supreme Court. See F.T.C. v.
Actavis, 570 U.S. 136 (2013). On remand, Judge Thrash decided five
summary judgment motions regarding the scope of private damages,
viable causation theories, and standards for liability. See In re
Androgel Antitrust Litig., No. 09-955, 2018 WL 2984873, at *1, *19
(N.D. Ga. June 14, 2018). In July 2018, Judge Thrash denied
certification of a class of direct purchasers of AndroGel. He
found that joinder of parties would not be impractical and thus
there was no need to certify a class. In re Androgel Antitrust
Litig., No. 09-956, 2018 WL 3424612, at *4 (N.D. Ga. July 16,
2018). Trial in that action and most of the retailer actions was
set for February 2020. However, all but one of the plaintiffs,
Giant Eagle, have now settled their claims in those cases. Giant
Eagle originally filed suit in the Western District of Pennsylvania
and is seeking remand to that district for trial now that pretrial
proceedings have been completed in the MDL. See Lexecon Inc. v.
Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 40 (1998).
There is also litigation related to AndroGel in this
district. On September 8, 2014, the FTC brought suit against
AbbVie and Besins in the Eastern District of Pennsylvania alleging
two antitrust violations. First, the FTC alleged that AbbVie and
Besins illegally maintained a monopoly through sham litigation
against Teva and Perrigo Company (“Perrigo”), another generic drug
manufacturer. Second, it alleged that AbbVie entered into an
unlawful reverse payment agreement with Teva whereby AbbVie shared
a portion of its monopoly profits with Teva in exchange for Teva’s
agreement to keep generic AndroGel off the market. This court
dismissed the FTC’s reverse payment claim under Rule 12(b)(6) of
the Federal Rules of Civil Procedure. See F.T.C. v. AbbVie Inc.,
107 F. Supp. 3d 428, 438 (E.D. Pa. 2015). As for the sham
litigation claim, this court entered judgment in favor of the FTC
following a bench trial and awarded $448 million in monetary
relief. See F.T.C. v. AbbVie Inc., 329 F. Supp. 3d 98, 146
(E.D. Pa. 2018). The action is currently on appeal. See F.T.C. v.
AbbVie Inc., Nos. 18-261, 18-2748 & 18-1758 (3d Cir.).
On July 2, 2018, RDC and Value Drug filed suit in this
district against AbbVie and Besins alleging sham litigation against
Teva and Perrigo. See Value Drug Co. v. AbbVie Inc., No. 18-2804
(E.D. Pa.). The court thereafter granted the defendants’ unopposed
motion to stay that action until the earlier of a decision by the
Court of Appeals resolving the appeals in F.T.C. v. Abbvie, Inc. or
sixty days after any party files a Notice of Termination of
Stipulated Stay.
On August 17, 2018, CVS Pharmacy, Inc., Rite Aid Corp.,
Walgreen Co., and several other indirect purchasers filed suit
against AbbVie and Besins alleging unlawful monopolization through
sham litigation against Teva and Perrigo. See Walgreen Co. v.
AbbVie, Inc., No. 18-3494 (E.D. Pa.); CVS Pharm., Inc. v. AbbVie,
Inc., No. 18-3495 (E.D. Pa.). Plaintiffs brought their claims on
their own behalf and as the assignees of Cardinal, McKesson, and/or
AmerisourceBergen. The parties stipulated to stay those actions on
September 10, 2018. Thereafter, plaintiffs settled and voluntarily
dismissed those actions.
II
Section 1404(a) provides in relevant part:
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.
28 U.S.C. § 1404(a).
We begin with the undisputed fact that venue is proper
both in the Eastern District of Pennsylvania and the Northern
District of Georgia. Certain defendants maintain places of
business in both districts. Once the court determines that venue
is proper, it must determine whether “on balance the litigation
would more conveniently proceed and the interests of justice be
better served by transfer to a different forum.” Jumara v. State
Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995) (internal citation
omitted). “The burden of establishing the need for transfer . . .
rests with the movant,” and generally, “the plaintiff’s choice of
venue should not lightly be disturbed.” Id. “Transfer ‘is not to
be liberally granted’ and should not occur ‘unless the balance of
convenience of the parties is strongly in favor of defendant.’”
Edwards v. Equifax Info. Servs., LLC, 313 F. Supp. 3d 618, 622
(E.D. Pa. 2018) (quoting Shutte v. Armco Steel Corp., 431 F.2d 22,
25 (3d Cir. 1970)).
In the Third Circuit, the contours for our analysis
under § 1404(a) are set forth in Jumara v. State Farm Insurance Co.
See 55 F.3d at 879-80. While there is no definitive formula or
list of factors for courts to consider in ruling on § 1404(a)
motions, courts consider variants of public and private interests
protected by § 1404(a). Id.
Private interest factors that we may consider include:
(1) plaintiff’s forum preference as manifested by his original
choice; (2) the defendants’ forum preference; (3) whether the claim
arose elsewhere; (4) the convenience of the parties as indicated by
their relative physical and financial condition; (5) the
convenience of the witnesses but only to the extent that they may
actually be unavailable for trial in one of the fora; (6) the
location of the books and records, which is similarly limited to
the extent that the files could not be produced in the alternative
forum; and (7) practical considerations that could make the trial
easy, expeditious, or inexpensive. Id.; see also In re Howmedica
Osteonics Corp., 867 F.3d 390, 402 n.7 (3d Cir. 2017).
Public interest factors that we may consider include:
(1) the enforceability of the judgment; (2) court congestion of the
different fora; (3) local interest in deciding local controversies
at home; (4) public policies of the fora; and (5) familiarity of
the trial judge with the applicable law in state diversity cases.
Jumara, 55 F.3d at 879. These considerations also support
transferring an action to a district when there is another action
involving “the same or similar issues and parties.” In re
Howmedica, 867 F.3d at 402.
We will examine each relevant factor in turn, beginning
with the private factors. We first consider the preferred forum of
the parties. Plaintiffs, of course, prefer this district where the
action was filed. Defendants, who bear the burden of demonstrating
the need for a transfer, prefer the Northern District of Georgia.
Typically, a plaintiff’s choice would “not be lightly disturbed.”
Jumara, 55 F.3d at 879. However, a plaintiff’s choice is afforded
less weight when the plaintiff selects a forum other than where she
resides. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 266 (1981).
Plaintiffs in this action are fourteen entities whose principal
places of business are located across the country. Only plaintiff
AmerisourceBergen is located in this district. Under these
circumstances, we will afford plaintiffs’ choice of venue here some
weight, but not as much as we otherwise would.
The third factor under Jumara, the location where the
claims arose, is neutral. AndroGel is sold nationwide.
Plaintiffs’ claims of overcharges are based on sales that occurred
throughout the country, including within this district and the
Northern District of Georgia. Thus, this factor is neutral. See
Teva Pharm. Indus. Ltd. v. AstraZeneca Pharm. LP, No. 08-4786, 2009
WL 2616816, at *5 (E.D. Pa. Aug. 24, 2009).
We next consider the convenience of the parties as
indicated by their relative physical and financial condition. As
stated above, plaintiff AmerisourceBergen is located in this
district, as is defendant Teva. No party is located within the
Northern District of Georgia. All of the parties are corporate
entities with the financial ability to litigate this case in either
the Eastern District of Pennsylvania or the Northern District of
Georgia. Accordingly, this factor is also neutral.
The convenience of non-party witnesses is also neutral
or weighs against transfer. Defendants have pointed to three
non-party witnesses, former Solvay employees, who are located
within the Northern District of Georgia where Solvay was formerly
headquartered. However, plaintiffs have pointed to eight potential
non-party witnesses who reside within 100 miles of the Eastern
District of Pennsylvania, including former employees of Solvay,
Par, Watson, Besins, and Teva. Witnesses not located in either
district may be presented via video deposition. See James-Velardo
v. United States, No. 17-1261, 2017 WL 2972690, at *2 (E.D. Pa.
July 12, 2017).
As to the location of books and records, there are
likely documents relevant to this action possessed by Teva and
AmerisourceBergen within this district. However, neither party has
offered any reason why records relevant to this action could not be
produced within either district. Technological advancements
significantly reduce the weight of this factor as files can be
easily reproduced and provided in electronic format. See Scanlan
v. Am. Airlines Grp., Inc., 366 F. Supp. 3d 673, 678 (E.D. Pa.
2019) (citing Coppola v. Ferrellgas, Inc., 250 F.R.D. 195, 200
(E.D. Pa. 2008)). Nor has any party cited practical considerations
that would make the trial easier, more expeditious, or less
expensive in either district. Accordingly, we conclude that the
private factors are neutral as to transfer.
We next consider the public factors articulated in
Jumara. The majority of public factors do not weigh heavily in our
analysis. Specifically, the enforceability of the judgment, public
policies of the fora, and the familiarity of the trial judge with
the applicable law are neutral because the causes of action at
issue here arise under federal antitrust law. See Scanlan, 366 F.
Supp. 3d at 679. As to court congestion, the undersigned has no
backlog on his docket.
This court has significant experience and familiarity
with issues related to this litigation, including background
regarding the development of AndroGel, the ‘894 patent, and
AbbVie’s settlements with Teva and Perrigo. See F.T.C. v. AbbVie
Inc., No. 14-5151, 2017 WL 4098688, at *1-4 (E.D. Pa. Sept. 15,
2017). There also can be no dispute that Judge Thrash of the
Northern District of Georgia has considerable experience relevant
to some of plaintiffs’ claims here, including the ‘894 patent and
issues related to liability, theories of causation, and the scope
of damages in antitrust actions. Both the Northern District of
Georgia MDL and the F.T.C. action here have involved significant
discovery, including voluminous productions of documents and
numerous depositions.
We conclude that both the private and public factors
under Jumara are largely neutral as to transfer. Defendants
therefore have not met their burden to establish the need for
transfer “for the convenience of the parties and witnesses, in the
interest of justice.” 28 U.S.C. § 1404(a); see also Scanlan, 366
F. Supp. 3d at 680.
Defendants have cited additional reasons why transfer is
warranted here. First, defendants assert that transfer is mandated
under In re Fine Paper Litigation, 632 F.2d 1081 (3d Cir. 1980).
In Fine Paper, our Court of Appeals declared that “[i]f a suit is
brought by either an assignor or partial assignee, the obligor
[antitrust defendant] has the option of requiring joinder of the
necessary parties or resorting to interpleader.” 632 F.2d at 1091.
Thus, “[u]nless the [defendant] has consented, the partial assignee
may not maintain the original suit . . . unless all parties having
the collective right to the entire claim are joined in the
proceeding.” Id. Consequently, the Court of Appeals prohibited an
assignee from exercising its right to opt out of a class action
because its assignor was in the class. See id. Defendants reason
that, under Fine Paper, transfer is necessary to consolidate the
claims of each assignor and its assignee in a single forum.
Fine Paper, however, merely stands for the proposition that a
partial assignee is precluded from opting out of an antitrust class
post-certification where the assignor is a member of that class.
Id. at 1091; see also United Food & Commercial Workers Local 1776
v. Teikoku Pharma USA, Inc., No. 14-02521, 2015 WL 4397396, at *6-7
(N.D. Cal. July 17, 2015). It does not control here where there is
no class action certified. Moreover, at least ten out of the
fourteen plaintiffs here have not assigned any claims to another
entity.2 Regardless, the four plaintiffs that have assigned
portions of their claims to certain retailers proceeding in the
Georgia action have since settled those actions. Accordingly, we
2. The parties dispute whether FWK Holdings, LLC, a plaintiff
here, assigned claims to Meijer, a plaintiff in the Georgia
action. Meijer has now settled its claims in the Georgia
action.
conclude that Fine Paper does not require transfer under the
circumstances presented here.
Defendants further assert that the first-filed doctrine
dictates transfer to the Northern District of Georgia. “The
first-filed rule requires, absent extraordinary circumstances, that
cases sharing substantially similar subject matter and subject to
concurrent federal jurisdiction be decided by the court where the
litigation was first filed.” Synthes, Inc. v. Knapp, 978 F. Supp.
2d 450, 455 (E.D. Pa. 2013) (citing E.E.O.C. v. Univ. of Pa., 850
F.2d 969, 971 (3d Cir. 1988)). The rationale for the rule is the
desire for sound judicial administration and comity among federal
courts of equal stature as well as the desire to avoid the vexation
of multiple litigations covering the same subject matter. Id. It
is not a “hard and fast rule” but rather a discretionary doctrine
permitting the court to do “what is right and equitable under the
circumstances and the law, and directed by the reason and
conscience of the judge to a just result.” E.E.O.C., 850 F.2d at
977 (internal citations and quotations omitted).
The present action was filed by different plaintiffs and
concerns additional claims which are not present in the actions in
Georgia. In addition, plaintiffs have named several entities which
are not defendants in the Georgia actions. Thus, the action
pending here is not “truly duplicative” of those in Georgia. See
Grider v. Keystone Health Plan Cent., Inc., 500 F.3d 322, 333 n.6
(3d Cir. 2007) (quoting Smith v. S.E.C., 129 F.3d 356, 361 (6th
Cir. 1997)). Given the differences between the two actions, we
decline to transfer this action to the Northern District of Georgia
based on the first-filed doctrine.
Finally, defendants contend that transfer of this action
to the Northern District of Georgia will promote judicial economy
and reduce the danger of inconsistent jury verdicts. According to
defendants, a joint trial of plaintiffs’ claims here with those
asserted in the Northern District of Georgia would be less
burdensome to witnesses, as well as jurors and the courts. As
stated above, all but one of the plaintiffs in the Georgia action
have now settled their claims. The remaining plaintiff, Giant
Eagle, intends to seek remand to the Western District of
Pennsylvania for trial where the action was originally filed. See
Lexecon Inc., 523 U.S. at 40. Because there will be no remaining
claims in Georgia with which to proceed to a joint trial, the
interest of judicial economy and the possibility of inconsistent
jury verdicts do not warrant transfer.
Accordingly, the motion of defendants to transfer venue
to the Northern District of Georgia pursuant to 28 U.S.C. § 1404(a)
will be denied.3
3. Par/Paddock, which has joined in the motion to transfer
venue over this entire action to the Northern District of
Georgia, also seeks in the alternative to sever Counts II and
III of the complaint and to transfer those claims. Par/Paddock
maintains that these claims are identical to those asserted in
the Georgia MDL and further points out that it is not named as a
defendant in the remaining counts of the complaint filed here.
However, we find that severance is inappropriate given that
Count I of the complaint alleges an overarching anticompetitive
scheme of conduct by AbbVie which includes the conduct alleged
in Counts II and III. Moreover, as noted above, the claims
against Par/Paddock in the Northern District of Georgia have
since settled. Accordingly, we decline to sever and to transfer
a portion of the claims.