FWK Holdings, LLC v. Merck & Company, Inc., No. 20-2184 (4th Cir. 2021)
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Plaintiffs, a group of pharmaceutical buyers, filed a class action against two manufacturers who allegedly reached an anticompetitive settlement in a patent dispute. Plaintiffs are a class of direct purchasers of Merck's brand-name drug and Glenmark's generic version of that drug. Defendants Merck and Glenmark challenge the district court's class certification order.
The Fourth Circuit vacated the district court's order, holding that the district court's numerosity analysis fell short in several respects. The court clarified that the text of Federal Rule of Civil Procedure 23(a)(1) refers to whether the class is so numerous that joinder of all members is impracticable, not whether the class is so numerous that failing to certify presents the risk of many separate lawsuits. In this case, the district court erred in analyzing the judicial-economy factor. When analyzing the judicial-economy factor on remand, the court instructed the district court to consider whether judicial economy favors either a class action or joinder. Furthermore, the district court's numerosity analysis improperly looked to the impracticability of individual suits rather than joinder, and thus the court is compelled to conclude that legal error infected the district court's class-certification decision.
The court also concluded that there was no abuse of discretion in the district court's adequacy determination and the court rejected Merck's and Glenmark's contention that the district court abused its discretion in finding the named plaintiffs adequate class representatives. The court also found no issue with the district court's predominance finding. Finally, plaintiffs waived any objection to the district court's dismissal of 23 companies.
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