Rite Aid Corporation et al v. Novartis Pharmaceuticals Corp. et al, No. 1:2018cv11835 - Document 12 (S.D.N.Y. 2019)
Court Description: OPINION AND ORDER GRANTING DEFENDANTS' PARTIAL MOTION TO DISMISS re: (118 in 1:18-cv-04361-AKH) MOTION to Dismiss ("Defendants' Notice of Motion to Dismiss Walgreen Co.'s and the Kroger Co.'s Claims for Injunctive Relief" ;). filed by Par Pharmaceutical, Inc., Novartis Pharmaceuticals Corporation. Defendants' partial motion to dismiss is granted. DPPs' per se Section 1 claim is dismissed. Walgreen Co. and the Kroger Co.'s claims for injunctive relief ar e dismissed. The following end-payor claims are dismissed: a. Statutory antitrust claims in the following jurisdictions with a statute of limitations three years or shorter: Kansas, Mississippi, and Tennessee; b. Unjust enrichment claims in the follo wing jurisdictions with a statute of limitations three years or shorter: Alaska, Arkansas, Colorado, Delaware, District of Columbia, Kansas, Maryland, Massachusetts, Mississippi, Montana, New Hampshire, North Carolina, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Washington; c. Unjust enrichment claims in the following jurisdictions with a direct benefit pleading requirement: Alabama, Florida, Georgia, Idaho, Kentucky, Maine, Michigan, New Jersey, North Dakota, Pennsylvania, and Rhode Island; d. Unjust enrichment claims in the following jurisdictions that are precluded by state law restrictions, including restrictions on indirect purchaser antitrust suits: Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, Georgia, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Missouri, Montana, New Jersey, Oklahoma, Pennsylvania, Puerto Rico, South Carolina, Texas, Virginia, Washington, and Wyoming; e. Unjust enrichment c laims in the following jurisdictions that are duplicative of otherwise pled state statutory claims: Arizona, California, District of Columbia, Florida, Hawaii, Iowa, Kansas, Maine, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, Ne w Mexico, New York, North Carolina, North Dakota, Oregon, South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wisconsin; f. Statutory antitrust claim brought in Illinois, where only the Attorney General may bring a class-action lawsuit on beha lf of indirect purchasers, 740 Ill. Comp. Stat. Ann. 10/7(2). g. Statutory consumer protection claims brought in Massachusetts, which prohibits entities engaged in ''trade or commerce" are prohibited from pursuing indirect purchaser su its, Mass. Gen. Laws ch. 93A §§ 9, 11; and h. Statutory consumer protection claims brought in Missouri, which allows only claims based on purchases made "primarily for personal, family, or household purposes," Mo. Rev. Stat. § ; 407.025(1). Accordingly, DPPs' Section 1 (applying the rule of reason) and Section 2 Sherman Act claims remain. In addition, remaining in the action are end payor plaintiffs' statutory antitrust claims arising under the laws of Arizona, C alifornia, the District of Columbia, Hawaii, Iowa, Maine, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, South Dakota, Utah, Vermont, West Virginia, and Wisconsin. Also remaining is E PPs' Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.204, claim. The clerk shall terminate the following motions: 18-cv-4361, ECF 118; 18-cv-5536, ECF 36, 51; 18-cv-5603, ECF 46, 59; 18-cv-5708, ECF 33, 46; 18-cv-5886, ECF 48, 61; 18-cv-9861, ECF 17, 18. SO ORDERED. (Signed by Judge Alvin K. Hellerstein on 8/14/19) (yv)
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Rite Aid Corporation et al v. Novartis Pharmaceuticals Corp. et al Doc. 12 USDCSD:\.Y DOCUMF'\T /. ' E:LEC7~tf>.\ICAfrL'1'· FILEI) UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------------------------------- X DOC#: DATF. FILEl>-: . '" . -:- , .I OPINION AND ORDER GRANTING DEFENDANTS' PARTIAL MOTION TO DISMISS 18 Civ. 4361 (AKH) In Re Novartis and Par Antitrust Litigation 18 Civ. 5536 18 Civ. 5603 18 Civ. 5708 18 Civ. 5886 18 Civ. 6776 18 Civ. 9861 18Civ.11835 18 Civ. 12293 -------------------------------------------------------------- X ALVIN K. HELLERSTEIN, U.S.D.J.: Two Novartis companies, Novartis Pharmaceuticals Corporation and Novartis AG, (both, "Novartis"), nearing the end of one patent covering their prescription drug, Exforge, a blood pressure regulator, and facing challenges to two others, made an agreement with Par Pharmaceutical, Inc. ("Par") to keep Par's generic equivalent off the market for as much as two years. Par agreed to delay marketing its generic until September 30, 2014; and Novartis agreed not to charge Par with infringement and to delay launching its own authorized generic to compete with Par until March 30, 2015. Plaintiffs, for themselves and a class, sued Novartis and Par for violating federal antitrust laws, alleging "per se" and "rule of reason" violations. Defendants move to dismiss the "per se" count and claims under state laws. I grant the motions. Dockets.Justia.com Background A. Factual History Because defendants' motion to dismiss is partial and does not challenge the general sufficiency of plaintiffs' complaints, the discussion contextualizing the motion can be brief. This is a civil antitrust action arising out of allegations that Novartis Pharmaceuticals and Par Pharmaceuticals engaged in anticompetitive conduct that delayed the entry of generic competition for Exforge, a prescription drug developed by Novartis that treats hypertension and has the active ingredients amlodipine and valsartan. Plaintiffs' core allegation is that Novartis and Par entered into an unlawful settlement agreement in which Par would not compete in the Exforge market by introducing a generic version of Exforge for a period of time, effectively extending the life of Novartis' patents. Novartis owned U.S. Patent No. 5,399,578 ("the '578 patent), which covered valsartan, marketed under the name Diovan. Amended DPP Complaint ("DP Compl."), 18-cv-4361, ECF 47 ,r,r 1, 4, 77. The validity of this patent was not challenged. The patent expired on March 21, 20_12, and a regulatory exclusivity attached to the patent expired on September 21, 2012. According to plaintiffs' theory, this is the earliest possible date that generics would have entered the market, but for the unlawful agreement. DP Compl. ,r 81. Specifically, the class complaints allege that as Par developed a generic version of Exforge, Par notified Novartis that it planned to launch its generic product prior to the expiration of certain follow-on patents (U.S. Patent Nos. 6,294,197 ("the '197 Patent") and 6,395,728 ("the '728 Patent")), which it claimed were invalid or would not be infringed by Par's proposed generic equivalents. DP Compl. ,r 82. 2 Pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585, known as the Hatch-Waxman Act, generic manufacturers may apply for approval to market a generic version of a previously approved medication. In contrast to the detailed and involved process to market a medication for the first time, in a New Drug Application ("NDA"), pursuant to the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301, et seq., an Abbreviated New Drug Application ("ANDA") requires a less elaborate showing: roughly stated, that the proposed generic medication is equivalent to an existing medication. In conjunction with its ANDA, a filer may certify that patents disclosed by the brand manufacturer and purporting to cover the existing medication are invalid or will not be infringed by the marketing of the generic (a "Paragraph IV certification"). 21 U.S.C. § 355G)(2)(A)(vii)(IV). An applicant filing a Paragraph IV certification must give notice to the patent holder, among others, and describe the basis for its position that the patent at issue is invalid or will not be infringed. 21 U.S.C. § 355G)(2)(B). Such an application constitutes an act of patent infringement. 35 U.S.C. § 271(e)(2)(A). "If the generic applicant begins to market its generic product prior to a determination of the patent's validity or scope, the launch is considered to be 'at risk' and the manufacturer can be forced to pay damages." In re Wellbutrin XL Antitrust Litig., 133 F. Supp. 3d 734, 739 (E.D. Pa. 2015) (citing 35 U.S.C. § 271(e)(4)(C)), aff'd sub nom. In re Wellbutrin XL Antitrust Litig. Indirect Purchaser Class, 868 F.3d 132 (3d Cir. 2017). If a brand manufacturer files suit within forty-five days of the application, the suit triggers an automatic thirty-month stay on the FDA's approval of the application, but a brand manufacturer is not required to sue within this period. 21 U.S.C. §§ 355(c)(3)(C), G)(5)(B)(iii). The regulatory framework incentivizes generic manufacturers to file an ANDA and to challenge invalid patents. See In re Nexium (Esomeprazole) Antitrust Litig., 42 F. Supp. 3 3d 231,245 (D. Mass. 2014), aff'd, 842 F.3d 34 (1st Cir. 2016). The first applicant to submit a Paragraph IV certification and receive approval for its ANDA gains a 180-day exclusivity period that begins on the date of the generic' s first commercial marketing, during which no other generics may be marketed. 21 U.S.C. § 355G)(5)(B)(iv). The 180-day period of exclusivity does not apply to any generic marketed by the brand manufacturer (an "authorized generic"), because the brand manufacturer has already received approval for the drug. See King Drug Co. of Florence v. Smithkline Beecham Corp., 791 F.3d 388,393 (3d Cir. 2015). Following the filing of a Paragraph IV certification, parties to the patent infringement dispute may resolve the dispute through an agreement, in which the brand manufacturer grants a license to the generic manufacturer, along with other consideration, allegedly to forestall a challenge to the patent and the introduction of generic competition. Such agreements are referred to as reverse payment settlement agreements, because in a traditional license arrangement, the patent or rights holder receives consideration from the alleged infringer and subsequent licensee, rather than the reverse. See F. TC. v. Actavis, Inc., 570 U.S. 136, 140 (2013). When the agreement includes as consideration a promise that the brand manufacturer will not market its own authorized generic, as alleged here, the agreement is referred to as a "noAG agreement." The Food and Drug Administration ("FDA") tentatively approved Par's ANDA on March 19, 2010. The FDA granted final approval of Par's ANDA on March 28, 2013, representing, according to plaintiffs' theory, the latest possible date that the generics would have entered the market, but for the allegedly unlawful agreement. DP Compl. 11. A second generic manufacturer, Synthon Pharmaceuticals Inc., also filed an ANDA with the FDA, seeking approval to market generic amlodipine and valsartan tablets. DP 4 Compl. ,r 3. On November 30, 2011, Par entered into an asset purchase agreement with Synthon to acquire Synthon's ANDA and its generic version of Exforge. DP Compl. ,r 5. Around 2011, rather than sue Par for patent infringement, Novartis and Par entered into an agreement under which (1) Par would not compete in the market for fixed combinations of amlodipine and valsartan until September 30, 2014, and (2) Novartis would not launch its own authorized generic version of Exforge until March 30, 2015. Thereby, Par gained the exclusive right to market generic Exforge for six months, to begin, September 30, 2014, after Novartis' period of exclusivity ended, until March 30, 2015. DP Compl. ,r 108. Plaintiff alleges that the Novartis/Par agreement had the dual effect of (1) delaying the entry of generic drugs to compete with Exforge (thereby extending the limited monopoly granted to Novartis by the patent laws) and (2) granting Par, in consideration, an exclusive market for 180 days for its generic, thereby allowing higher drug prices for the extended periods of exclusivity. The complaint alleges that, pursuant to the agreement, the Par generic, in fact, entered the market on September 30, 2014 and Novartis' generic, after Par's exclusive period ended, on March 30, 2015. B. Procedural History The parties have divided the now nine cases into two groups for consolidation: direct purchaser plaintiffs 1 ("DPPs") and end payor plaintiffs ("EPPs"), based on the indirect purchaser rule, which limits recovery under federal law to those who purchased anticompetitive 1 Among this group are several retailers, including Walgreen Co., The Kroger Co., Rite Aid Hdqtrs. Corp., and CVS Pharmacy, Inc., who have asserted claims largely analogous to the other direct purchaser plaintiffs. Following a hearing on November 8, 2018, I denied Walgreen Co. and The Kroger Co.'s motion for leave to file a supplemental brief and directed that this litigation be coordinated with that of the other direct purchaser plaintiffs. 5 products directly from the alleged antitrust violator. See Kansas v. UtiliCorp United, Inc., 497 U.S. 199, 208 (1990) ("The direct purchaser rule serves, in part, to eliminate the complications of apportioning overcharges between direct and indirect purchasers."); see also Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481 (1968); Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). Accordingly, the "Direct Purchasers" raise claims under Sections 1 and 2 of the Sherman Act; the "End Payors" raise various state law claims for anticompetitive activity. The DPPs and EPPs seek to represent classes of similarly situated plaintiffs. Discussion A. Legal Standard In ruling on a motion to dismiss for failure to state a claim, the court must accept the factual allegations in the complaint as true and draw all reasonable inferences in favor of the nonmoving party. Gregory v. Daly, 243 F.3d 687, 691 (2d Cir. 2001), as amended (Apr. 20, 2001). To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face."' Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell At!. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. B. Direct Purchaser Plaintiffs I. Per Se Claim for Violations of Section 1 of the Sherman Act DPPs assert that the no-AG reverse payment agreement alleged between defendants is a market division that is per se illegal under Section 1. "The per se standard was 6 created to streamline antitrust claims in situations where the agreement has 'such a predictable and pernicious anticompetitive effect, and such limited potential for procompetitive benefit" that courts may predict with confidence that the conduct is unreasonably anticompetitive every time it arises.'" United Food & Commercial Workers Local 1776 & Participating Employers Health & Welfare Fund v. Teikoku Pharma USA, Inc., 74 F. Supp. 3d 1052, 1075 (N.D. Cal. 2014) (quoting Northern Pacific Ry. Co. v. United States, 356 U.S. 1, 5 (1958)). FTC v. Actavis, Inc., 570 U.S. 136 (2013) forecloses the type of per se claim that plaintiffs seek to assert here. There, the Supreme Court explicitly rejected the FTC's position that "reverse payment settlement agreements are presumptively unlawful and that courts reviewing such agreements should proceed via a 'quick look' approach, rather than applying a 'rule ofreason." ' Id. at 158-59. In [California Dental Association v. F. T.C.], we held (unanimously) that abandonment of the "rule ofreason" in favor of presumptive rules (or a "quick-look" approach) is appropriate only where "an observer with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anticompetitive effect on customers and markets." [526 U.S. 756, 770 (1999).] We do not believe that reverse payment settlements, in the context we here discuss, meet this criterion. Id. at 159 (emphasis added). The Actavis Court explained its basis for adopting a rule of reason rather than a per se or presumptive rule, observing that "the likelihood of a reverse payment bringing about anticompetitive effects depends upon its size, its scale in relation to the payor's anticipated future litigation costs, its independence from other services for which it might represent payment, and the lack of any other convincing justification. The existence and degree of any anticompetitive consequence may also vary as among industries." Id. In assessing the unjustified anticompetitive impact of these agreements, trial courts need not require every manner of proof; 7 instead they may structure the litigation and calib rate the appropriate proo f in light of the circumstances. Id at 159- 60. Plaintiffs attempt to distinguish Actavis on the basis of the timing of the settlement. In Actavis, litigation had begun, whe reas no suit was ever filed by Novartis. There is no basis in the Hatch-W axm an statutory framewo rk to distinguish between these circumstances. As discussed, filing a Paragraph IV certification unde r the Hatc h-W axm an framework amounts to a technical act of pate nt infringement. Novartis could have sued Par, even though it ultimately did not do so, declining to engage the automati c thirty-month stay provided for in the HatchWax man act. This timing-based difference neith er materially distinguishes Actavis nor disturbs the basis of the Supreme Cou rt's rule eschewin g theories of liability that would preclude consideration of the necessary complexities of this broad class of transactions. Because the alleged conduct unfolded in the cont ext of and depended on an intricate statutory regime, the Supreme Cou rt's teaching on that regime applies, and not general principles of mark et allocation agreements, as DPP s urge. Cases cited by DPP s in support of its theory addressed geographic, rather than temporal mark et division, see, e.g. Palmer v. ERG of Georgia, Inc., 498 U.S. 46, 48-4 9 (1990), and I can infer no basis for extending the per se rule to the former context, or treating a no-A G reverse paym ent agreement as an output restriction or price-fixing agreement. Similarly, there is no plau sible rationale to distinguish Actavis for having addressed cash-based consideration, rathe r than a no-A G agreement. DPP s' arguments concerning the relative anticompetitive impact of no-A G agreements vis-a-vis cash-based arrangements underscore the appropriatei;i.ess of a more comprehensive rule of reason approach. Subsequent case law uniformly supports the appl ication of Actavis and the rule of reason approach to this case. See King Dru g Co. of Florence v. Smithkline Beecham Corp., 791 8 3 F. d at 409 ("[A ] no -A G agreem en t .. . is subject to antitrust scrutiny un de r the rule of re as on ." ); C om m er ci al Wor kers L oc al 1776 & Participating Employers Healt F un dv . Teikoku h & Welfare P ha rm a USA, In c., 74 F. Supp. 3d 1052, 1075 (N.D . Cal. 2014) ("Pl not cited, an d I aintiffs have ha ve no t found, an y case w he re a no-authorized generic agreemen un de r the pe r se t was analyzed test. Instead, di strict courts ha ve considered no-a uthorized generi un de r the rule o c agreements f reason approach as set forth by th e C ou rt in A ct av is an d discussed (citing cases). P above.") laintiffs' further arguments th at re verse pa ym en ts fit within other pe r se illegality categories o f are similarly inco nsistent with A ct av is and are unav ailing here. Plaintiffs' pe r se Section 1 claim is dismissed. United F oo d & 2. M ot io n for Inju nctive R el ie f D P P s Walgreen Co. and the Kro ger Co. 's claims for injunctive re dismissed w it h li ef are prejudice. Injunc tive re li ef requir es a showing o f "o ng oi ng or futu by the alleged S re ha rm caused he rm an A ct viol ations." United F oo d & Comm. Workers L oc al 17 Participating Em 76 & ployers Health & Welfare F un d v. Teikoku P ha rm a USA, Inc., No. 14 02 52 1- W H O , 20 -MD15 W L 4397396, at *3 (N.D. Cal. July 17, 2015). Walgreens an d K an d cannot, alle roger do not, ge ongoing harm , because they ac knowledge the en try o f at least five manufacturers in generic to th e m ar ke t on or shortly after M ar ch 30, 2015. Walgreens Com 09861, ECF 1, , plaint, 18-cv117. Walgreens and K ro ge r' s th eory o f on go in g ha rm based on th return o f prices e delayed to competitive le vels is equally un availing. Se e id Moreover, monet damages are a su ary fficient re m ed y here. Plaintiffs' supplementary ci tation to th e Fed C om m is si on 's M eral Trade ar ch 2019 decisi on in In re: Jmpa x Laboratories, Inc., Docket No. 28, 2019), ECF 9373 (M ar ch 168, does no t re quire otherwise. 9 The claims for injunctive relief are dismissed. C. End Payor Plaintiffs' State Law Claims Defendants seek to dismiss a number of the EPPs' state-law claims, based on the following arguments: (1) Many of the state claims are barred by statutes of limitation. 2) Unjust enrichment claims, where not specifically provided by state law, are inconsistent with Supreme Court precedent under Illinois Brick, which limits recovery to direct purchasers in antitrust actions. (3) Where alternative remedies are available, claims for unjust enrichment are duplicative. (4) Certain unjust enrichment claims require a direct benefit, which the EPPs, as indirect purchasers, do not plead. (5) The Illinois Antitrust Act limits antitrust class claims to those brought by the attorney general. (6) Consumer protection claims under Massachusetts and Missouri law require claims by end consumers, and not corporations, and thus fail. 1. Statute of Limitations Defendants argue that, based on the most favorable reading of the complaint, plaintiffs admit that a reasonable plaintiff would have been on notice of the claims no later than September 2014, when they allege that, after "Novartis failed to launch an AG upon market entry by Par ... it became clear that Novartis and Par's Agreement contained a no-AG promise." EPP Amended Complaint ("CAC"), 18-cv-5536, ECF 25, ,r 189. On this basis, defendants argue that claims based on statutes of limitation shorter than three years and nine months should be dismissed. None of the EPPs' arguments to the contrary are persuasive. Unlike In re Generic Pharm. Pricing Antitrust Litig., 368 F. Supp. 3d 814,852 (E.D. Pa. 2019), the basis ofthe 10 statutes of limitatio ns defense is apparen t from the pleadings, and no further discove ry is required. Moreov er, EPPs' theory of continuing harm is not plausible. There is no plausibl e interpre tation of the facts in which the conspira cy or any harm caused by it extende d past March 2015, at which time at least five additional manufac turers entered the market, resulting in "intense " competition. EPP CAC ,r 193. Similarly, the complai nt lacks proper allegations of a continui ng course of conduct. For the same reasons, plaintiff s' reliance on continui ng violations doctrine, which depends on an allegation of continui ng harm, also fails. Accordi ngly, the statutory antitrust claims based on the laws of Kansas, Mississippi, and Tenness ee; and the unjust enrichm ent claims based on the laws of Alaska, Arkansas, Colorado, Delawar e, District of Columb ia, Kansas, Marylan d, Massachusetts, Mississippi, Montan a, New Hampsh ire, North Carolina, Oklahom a, Oregon, Puerto Rico, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Washin gton are dismissed. 2. State Unjust Enrichm ent Claims a. States that Follow Illinois Brick Where barred from bringing statutory antitrust claims, EPPs have pleaded unjust enrichment. Defenda nts argue that these claims are preclude d in the jurisdic tions that have not repudiat ed Illinois Brick's prohibit ion against indirect purchas er damage s actions. Illinois Brick Co. v. Illinois, 43 l U.S. 720 (1977). There, "the Suprem e Court held that only direct purchas ers could sue for unjust benefits gained by a defenda nt manufac turer through anticom petitive conduct that violated federal antitrust laws." In re DDA VP Indirect Purchaser Antitrus t Litig., 903 F. Supp. 2d 198,232 (S.D.N.Y. 2012). 11 "Des pite a hand ful of contr ary case law ... , the vast majo rity of courts have held that indire ct purch asers may not bring state claims for unjus t emic hmen t if they other wise would be barred from bring ing a claim under· that state 's antitr ust and consu mer-p rotec tion statutes, absen t a show ing that the comm on law of the state in quest ion expre ssly allows for such recov ery." In re Niaspan Antitrust Litig., 42 F. Supp. 3d 735, 763 (E.D. Pa. 2014); see also In re DDAVP Indirect Purchaser Antitrust Litig., 903 F. Supp . 2d at 232 ("[I]n direc t purch aser plaintiffs 'may not recov er restitution in states that follow the rules of Illinois Briclc' and that therefore states that have 'not expressly passe d Illinois Brick repea ler legisl ation or interpreted [their] law in such a way as to override the rule of Illino is Brick [are Jpresu med to have decided to follow federal law, inclu ding the Illinois Brick limita tion on indire ct purch aser claim s"') (quot ing In re Digital Music Antit rust Litig., 812 F. Supp . 2d 390,4 13 (S.D.N.Y. 2011)). Plain tiffs' posit ion amou nts to an attem pt to circu mven t fllinois Brick, which confined antitrust claim s to direct purchasers, in the absen ce of a show ing that such a recov ery is allowed. EPPs ' cited autho rity gener ally did not direc tly address these principles, or are other wise distinguishable. Plain tiffs' citation to In re Gene ric Pharm. Pricing Antitrust Litig., 368 F. Supp. 3d 814,8 49 (E.D. Pa. 2019 ) is unpersuasi ve. Whil e it is true that the gains to the defendant, rathe r than plain tiffs' losses, prese nt the first step in consi derin g a claim for unjus t emic hmen t, the conce rn for doub le recov ery and the appor tionm ent of claim s remains. Accordingly, EPPs ' unjus t emic hmen t claims based on the laws of Alab ama, Alaska, Arkansas, Colorado, Connecticut, Delaw are, Geor gia, Idaho, Illinois, Kentucky, Louisiana, Mary land, Mass achus etts, Missouri, Mont ana, New Jersey, Oklahoma, Pennsylvania, Puert o Rico, South Carolina, Texas, Virginia, Wash ingto n, and Wyo ming are dismissed. 12 b. Direct Benefit Pleading Re qu ire me nt/ or Certain Unjus t Enrichment Claims Defendants identify eleven states that requir benefit on the defendant in e that a pla int iff confer a dir order to recover under a the ory of un Memorandum of La w in Su pport of Partial Motion to ect just enrichment. Defendants ' Dismiss, 18-cv-5536, EC F 38 ("Br."), at 31 -36 . Because EPPs do no t plead a direct benefit, see CAC 174(f), claims withi n these states d. See, e.g., Cole v. NIBCO, Inc., No. 3:13-CV-07871 FL W, 2015 WL 2414740, at* 14 (D.N.J. May 20, 2015) (dismissing Alabama claim for lack of a "sufficiently direct relation ship"); In re Packaged Seafo od Prod. Antitrust Litig., 24 2 F. Supp. 3d 1033, 1090 (S.D. Cal. 2017 ) (dismissing Florida claim ) (citing Kopel v. Kopel, 22 9 So. 3d 812, 818 (Fla. 2017)); Archer v. Holmes, No. l :17-CV-2051 -TWT, 2018 WL 534475, at *5 (N.D. Ga. Jan. 23, 2018) (dismissing Georgia claims); Sheet Metal Workers Local 441 Health & Welfare Plan v. GlaxoSmithKline, PL C, 737 F. Supp. 2d 380 (E.D. Pa. 2010) (recognizing a dir ect benefit requirement for Idaho unjus t enrichment claims) (citing Hayden Lake Fire Pro~. Dist. v. Alcorn, 111 P.3d 73, 91 -92 (Idaho 2005)); Pixler v. Huff, No. 3:11-CV-00207-JHM, 2011 WL 5597327, at *11 (W.D. Ky. Nov. 17, 2011) (dismissing Kentuck y claim); Rivers v. Amato, No . CIV. A. CV-00-131, 2001 WL 1736 498, at *4 (Me. Super. June 22, 2001) (granting summa ry jud gm en t on Maine claim); In re Gen. Motors LL C Ignition Switch Litig., 257 F. Supp. 3d 37 2,4 27 (S.D.N.Y. 2017) (dismissing Michigan claim); Apache Co rp. v. MD U Res. Grp., Inc., 603 N.W.2d 891, 895 (N.D. 19 99) (requiring that the bene fit be obtained "at the direct expense of the [complainant]"); In re Static Ra ndom Access Memory (SRAM ) Antitrust Litig., No. 07-M D01819 CW, 2010 WL 5094 289, at *7 (N.D. Cal. Dec. 8, 2010) (dismissing Pennsyl vania claims) (citing Stutzle v. Rhone-Pou lenc S.A., No. 002768OCT.T ERM2002, 2003 WL 222504 24, at *1 are deficient and are dismisse 13 CA 11-246ML, rgan Chase Bank, NA . v. Leigh, No. Mo JP. 3)); 200 26, t. Sep Pl. . Com *2 (Pa. report and 2011) (dismissing Rhode Island claim), 23, . Aug R.I. (D. *2 at 4, 158 435 2011 WL 15, 2011); In re ML, 2011 WL 4351561 (D.R.I. Sept. 246 11CA No. , pted ado n atio end recomm 1756, at *26 (E.D. g., No. 2:09-MD-02042, 2013 WL 143 Liti st itru Ant rs sso pre Com t ran rige Ref Mich. Apr. 9, 2013) (same). existence of a direct ben EPPs attempt to call into question the ority is either con these jurisdictions, but their cited auth ority establis requirement, predates more recent auth sistent with the direct benefit hing a direct benefit requirement, is sory analysis of distinguishable, or provides only a cur persuasive authority to the contrary, efit requirement in the law in the state. In the absence of ed on the laws of unjust enrichment claims arising bas North Dakota, tucky, Maine, Michigan, New Jersey, Alabama, Florida, Georgia, Idaho, Ken dismissed. Pennsylvania, and Rhode Island are c. tutory States Conferring an Independent Sta Remedy: Plaintiffs' Antitrust Remedies Are Unjust Enrichment Claims in States with Duplicative and Dismissed ng sponte, of whether plaintiffs' remaini At the hearing, I raised the issue, sua ily by Illinois Brick, were not unnecessar red bar not re whe n eve ent, ichm enr claims for unjust the parties to s appropriately dismissed. I permitted thu and ms, clai ry uto stat r thei of duplicative ortunity to be e, providing sufficient notice and opp issu the on fing brie ry enta plem sup submit er, 35 F.3d 77, 82 (2d Cir. 1994). heard. See Wachtler v. Cty. ofHerkim nts party may set out two or more stateme Pursuant to Fed. R. Civ. P. 8(d)(2), "[a] ones." er in a single count ... or in separate eith , ally etic oth hyp or ly tive rna alte of a claim ... 14 nt claim s, Fed. R. Civ. P. 8(d)(3), I Whil e parti es are also perm itted to plead incon siste hmen t claim s are unne cessa ry and dupli cativ e neve rthel ess conc lude that plain tiffs' unju st enric Inc., No. 17-c v-24 02 (NRB ), 2018 WL of their statu tory claim s. See Alce v. Wise Foods, in the Seco nd Circu it have recog nized that 1737 750, at *11 (S.D .N.Y . Mar. 27, 2018 ) ("Co urts e it simp ly dupli cates , or repla ces, a 'an unju st enric hmen t claim cann ot survi ve wher st enric hmen t claim s will rise and fall with its conv entio nal contr act or tort claim ."'). EPPs ' upju succe ed, they are dupli cativ e, and to the exten t statu tory claims. To the exten t that those claim s not reme diate them . they are defic ient, its unju st enric hmen t claim s will tion in strea mlin ing the litiga tion Dism issin g these claim s serve s an impo rtant func s' unju st enric hmen t claim s base d on the laws proc eedin gs of a comp lex case. Acco rding ly, EPP e, Mich igan, Minn esota , Nebr aska , Neva da, of Arizo na, Calif ornia , Flori da, Haw aii, Iowa , Main ta, Utah , Verm ont, Wes t Virg inia, and New Mex ico, New York , Nort h Dako ta, Sout h Dako Wisc onsin are dism issed . 3. trust Act Indir ect Purc hase r Class Actio n Unde r Illino is Anti r the Illino is Anti trust Act, Defe ndan ts also moy e to dism iss EPPs ' claim s unde the State Atto rney Gene ral may main tain a 740 Ill. Com p. Stat. Ann. 10/3, asser ting that only at 36 (citin g See 740 Ill. Com p. Stat. Ann. class actio n on beha lf of indir ect purch asers . Br. tain a class actio n in any cour t of this State for 10/7( 2) ("[N ]o perso n shall be autho rized to main with the sole exce ption of this State 's indir ect purc hase rs asser ting claim s unde r this Act, ed on whet her the Illino is Antit rust Act Atto rney Gene ral .... ")). "Dis trict court s are divid ns. How ever, a majo rity of court s have held precl udes indir ect purc hase rs from filing class actio law in [Shady Grove Orthopedic Assocs., P.A. that the Act is distin guish able from the New York 15 that it prohibits indirect purchaser class v. Allstate Ins. Co., 559 U.S. 393, 398 (2010)] and . 3d 435, 459 (D.N.J. 2018); see also In re actions." In re Effexor Antit rust Litig., 337 F. Supp Digital Music Antit rust Litig., 812 F. Supp. 2d at 416. As a result, EPPs ' Illinois claims are dismissed. 4. Massachusetts and Missouri Consumer Protection Claims not bring claims unde r§ 11 of Unde r Massachusetts law, indirect purchasers may have sought to bring them unde r § 9 of the the Massachusetts Cons umer Protection Act, so EPPs erce. Act, whic h excludes those enga ged in "trad e or comm " Mass. Gen. Laws. Ch. 93A, §§ 9, 6 (SRU), 2016 WL 4204478, at *8 (D. 11; In re Aggr enox Antit rust Litig., No. 3:14-MD-251 construed to make section nine exclusively Conn. Aug. 9, 2016). "Tho se provisions are naturally y applicable to business entities." Id. The applicable to consumers and section eleve n exclusivel this distinction concerned a non-profit hospital single case cited by the EPPs calling into question not present here. See In re Lorazepam & that was created by legislative mandate, conditions (D.D.C. 2003). Clorazepate Antit rust Litig., 295 F. Supp. 2d 30, 46 requires that purchases be Similarly, the Missouri Merchandising Practices Act purposes" and does not cover insurance plans, made "primarily for personal, family or household but to fulfill the plan 's business purposes. because such purchases are not for personal purposes rine Ophthalmic Emulsion) Antit rust Litig., Mo. Rev. Stat. § 407.025; In re Restasis (Cyclospo citations either did not address the statutory 355 F. Supp. 3d 145, 157 (E.D.N.Y. 2018). EPP s' rs who acquired the products "for their own limitations argument or address classes of purchase l) Antit rust Litig., No. M 07-1827 SI, 2011 use and not for resale." In re TFT-LCD (Flat Pane ke In re Generic Pharm. Pricing Antit rust WL 3268649, at *6 (N.D. Cal. July 28, 2011). Unli 16 there are no individuals who could potentially Litig., 368 F. Supp. 3d 814, 847 (E.D. Pa. 2019), it is unnecessary to defer this determination constitute "consumers" among the plaintiffs, and until later in the litigation. sachusetts and Missouri are As a result, EPP s' claims based on the laws of Mas dismissed. Conclusion to dismiss is granted. DPP s' For the reasons stated, defendants' partial motion and the Kroger Co. 's claims for injunctive per se Section 1 claim is dismissed. Walgreen Co. relief are dismissed. The following end-payor claims are dismissed: dicti a. Statutory antitrust claims in the following juris ons with a statute of pi, and Tennessee; limitations three years or shorter: Kansas, Mississip dicti b. Unjust enrichment claims in the following juris ons with a statute of , Colorado, Delaware, District of Columbia, limitations three years or shorter: Alaska, Arkansas Montana, New Hampshire, Nort h Carolina, Kansas, Maryland, Massachusetts, Mississippi, South Carolina, Tennessee, Texas, Virginia, and Oklahoma, Oregon, Puerto Rico, Rhode Island, Washington; dictions with a direct benefit c. Unjust enrichment claims in the following juris Idaho, Kentucky, Maine, Michigan, New pleading requirement: Alabama, Florida, Georgia, Island; Jersey, North Dakota, Pennsylvania, and Rhode dicti d. Unjust enrichment claims in the following juris ons that are precluded by ect purchaser antit state law restrictions, including restrictions on indir 17 rust suits: Alabama, y, Dela ware , Georgia, Idaho, Illinois, Kentuck Alaska, Arkansas, Colo rado , Connecticut, Missouri, Mon tana , New Jersey, Oklahoma, Louisiana, Mai ne, Mar ylan d, Mas sach uset ts, g; Texas, Virginia, Was hing ton, and Wyo min Pennsylvania, Puer to Rico, Sou th Carolina, juris dict ions that are duplicative of e. Unj ust enri chm ent claim s in the following aii, California, Dist rict of Colu mbi a, Florida, Haw ona, Ariz s: claim tory statu state pled e rwis othe re, Mississippi, Neb rask a, Nev ada, New Ham pshi Iow a, Kan sas, Maine, Mic higa n, Minnesota, ee, th Dak ota, Oregon, Sou th Dak ota, Ten ness New Mexico, New Yor k, Nor th Carolina, Nor in; Utah, Verm ont, Wes t Virg inia, and Wiscons f. Stat utor y antitrust claim brou ght in Illinois, of indi rect purc may brin g a clas s-ac tion laws uit on beha lf whe re only the Attorney General hase rs, 740 Ill. Comp. Stat. Ann. 10/7(2). g. Stat utor y cons ume r prot ectio n claims brou ght in Massachusetts, whi ch mer ce" are proh ibite d from purs uing indi rect prohibits entities enga ged in ''trad e or com §§ 9, 11; and purc hase r suits, Mass. Gen. Law s ch. 93A ght in Missouri, whic h allows only h. Statutory cons ume r prot ectio n claim s brou ," Mo. for personal, family, or hous ehol d purp oses claim s base d on purc hase s mad e "pri mar ily Rev. Stat. § 407.025(1). rule ofre ason ) and Sect ion 2 Acc ordi ngly , DPP s' Sect ion 1 (applying the aini ng in the actio n are end payo r plai ntiff s' She rma n Act claim s remain. In addition, rem Colu mbi a, laws of Arizona, California, the Dist rict of statutory antitrust claim s arising unde r the Neb rask a, Nev ada, New Ham pshi re, New Mex Hawaii, Iow a, Maine, Michigan, Minnesota, t Oregon, Sou th Dak ota, Utah, Verm ont, Wes New York, Nor th Carolina, Nor th Dakota, 18 ico, Practices s' Florida Deceptive and Unfair Trade EPP is ng aini rem o Als sin. con Wis Virginia, and Act, Fla. Stat. § 501.204, claim. motions: 18-cv-4361, ECF 118; 18-cvThe clerk shall terminate the following 48, 61; v-5708, ECF 33, 46; 18-cv-5886, ECF 18-c 59; 46, ECF 03, v-56 18-c 51; 36, 5536, ECF 18-cv-9861, ECF 17, 18. SO ORDERED. Dated: fj., 2019 August New York, New York AL VIN K. HEL LER STE IN United States District Judge, 19
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