Federal Trade Commission et al v. Vyera Pharmaceuticals, LLC et al, No. 1:2020cv00706 - Document 530 (S.D.N.Y. 2021)
Court Description: OPINION AND ORDER: Shkreli's October 20, 2021 motion to preclude evidence relating to Retrophin is denied. (Signed by Judge Denise L. Cote on 11/5/2021) (vfr)
Download PDF
<![CDATA[
Federal Trade Commission et al v. Vyera Pharmaceuticals, LLC et al UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------- X : FEDERAL TRADE COMMISSION, STATE OF NEW : : YORK, STATE OF CALIFORNIA, STATE OF : OHIO, COMMONWEALTH OF PENNSYLVANIA, : STATE OF ILLINOIS, STATE OF NORTH CAROLINA, and COMMONWEALTH OF : VIRGINIA, : : Plaintiffs, : -v: : : VYERA PHARMACEUTICALS, LLC, AND : PHOENIXUS AG, MARTIN SHKRELI, : individually, as an owner and former director of Phoenixus AG and a former : : executive of Vyera Pharmaceuticals, LLC, and KEVIN MULLEADY, individually, : : as an owner and former director of Phoenixus AG and a former executive of : Vyera Pharmaceuticals, LLC, : : Defendants. : : -------------------------------------- X Doc. 530 20cv00706 (DLC) OPINION AND ORDER APPEARANCES: For plaintiff Federal Trade Commission: James H. Weingarten Markus H. Meier Bradley S. Albert Amanda Triplett Armine Black Daniel W. Butrymowicz J. Maren Schmidt Lauren Peay Leah Hubinger Matthew B. Weprin Neal J. Perlman Federal Trade Commission 600 Pennsylvania Avenue, NW Washington, DC 20580 For plaintiff State of New York: Dockets.Justia.com Amy E. McFarlane Jeremy R. Kasha Elinor R. Hoffman Saami Zain Office of the New York Attorney General Antitrust Bureau 28 Liberty Street, 20th Floor New York, NY 10005 Bryan Lewis Bloom Freshfields Bruckhaus Deringer US LLP 700 13th St. NW 10th fl. Washington, DC 20005 For plaintiff State of California: Michael D. Battaglia Office of the Attorney General of California 455 Golden Gate Avenue, Suite 11000 San Francisco, CA 94102 For plaintiff State of Ohio: Beth Finnerty Office of the Ohio Attorney General 150 E. Gay Street, 22nd Floor Columbus, OH 43215 For plaintiff Commonwealth of Pennsylvania: Joseph Betsko Pennsylvania Office of Attorney General Strawberry Square, 14th Floor Harrisburg, PA 17120 For plaintiff State of Illinois: Richard S. Schultz Office of the Attorney General of Illinois 100 W. Randolph Street, 11th Floor Chicago, IL 60601 For plaintiff State of North Carolina: K.D. Sturgis Jessica V. Sutton North Carolina Dept. of Justice Consumer Protection Division 114 West Edenton Street Raleigh, NC 27603 For plaintiff Commonwealth of Virginia: 2 Sarah Oxenham Allen Tyler T. Henry Office of the Attorney General of Virginia 202 North Ninth Street Richmond, VA 23219 For defendants Vyera Pharmaceuticals, LLC and Phoenixus AG: Stacey Anne Mahoney Sarah E. Hsu Wilbur Morgan, Lewis & Bockius LLP 101 Park Avenue New York, NY 10178 Scott A. Stempel William Cravens Melina R. Dimattio Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue, NW Washington, D.C. 20004 Steven A. Reed Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, PA 19103 Noah J. Kaufman Morgan, Lewis & Bockius LLP One Federal Street Boston, MA 02210 Michael M. Elliott Rachel J. Rodriguez Phillips Nizer LLP 485 Lexington Avenue New York, NY 10017 Michael L. Weiner Dechert LLP (NYC) 1095 Avenue of the Americas New York, NY 10036-6797 For defendant Martin Shkreli: Christopher H. Casey Andrew J. Rudowitz Jeffrey S. Pollack Sarah O'Laughlin Kulik Duane Morris LLP 3 30 South 17th Street Philadelphia, PA 19103 Sarah Fehm Stewart Duane Morris, LLP (NJ) One Riverfront Plaza, Suite 1800 Newark, NJ 07102-3889 For defendant Kevin Mulleady: Kenneth R. David Albert Shemtov Mishaan Nicholas Anthony Rendino Kasowitz, Benson, Torres LLP (NYC) 1633 Broadway New York, NY 10019 DENISE COTE, District Judge: Trial is scheduled to begin in this antitrust action on December 14, 2021. Defendant Martin Shkreli has moved to preclude the plaintiffs from offering evidence at trial regarding Retrophin, Inc., a pharmaceutical company that Shkreli founded in 2011. The motion is denied. Background The plaintiffs seek to prove at trial that Vyera Pharmaceuticals, LLC (“Vyera”), a pharmaceutical company that Shkreli founded in 2014, and the two individual defendants violated the antitrust laws through a scheme that involved, inter alia, purchasing an off-patent, single-source rare-disease drug, raising the price for the drug dramatically, and entering into agreements that effectively closed the distribution system of the drug and blocked competition by generic pharmaceuticals. 4 The plaintiffs seek to offer evidence that Shkreli pioneered this anticompetitive strategy at Retrophin, which applied the strategy to two drugs that Retrophin acquired and/or licensed: Chenodal and Thiola. After Retrophin obtained control of those drugs it raised their prices by 400% and 2,000%, respectively. In this lawsuit, the plaintiffs seek to hold Shkreli liable for violations of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2; § 5(a) of the FTC Act, 15 U.S.C. § 45(a); and various state statutes. They seek equitable monetary relief and an injunction banning Shkreli from the pharmaceutical industry. Discussion The evidence regarding Shkreli’s activities at Retrophin in connection with Chenodal and Thiola is admissible. First, it is admissible as background evidence regarding the conspiracy alleged in the complaint. Evidence of uncharged conduct is independently admissible and is “not evidence of other crimes, wrongs, or acts under Rule 404(b)” if that conduct arose out of the same series of transactions, is “inextricably intertwined” with the conduct at issue at trial, or is necessary “to complete the story” of the claimed offense at trial. United States v. Robinson, 702 F.3d 22, 37 (2d Cir. 2012). It is also admissible under Rule 404(b) as evidence of motive, intent, plan, knowledge, and the absence of mistake. Fed. R. Evid. 404(b); United States v. Curley, 639 F.3d 50, 57 5 (2d Cir. 2011). The conduct, as proffered by the plaintiffs, is sufficiently similar to the conduct at issue at trial to permit the inferences argued by the plaintiffs. The probative value of the evidence is not outweighed by any unfair prejudice to Shkreli or any other concern identified by Rule 403. Finally, if Shkreli is found liable, the evidence is relevant to the request for injunctive relief. That request will require a determination of the extent to which the violation was an isolated occurrence and the degree of willfulness involved. See S.E.C. v. Cavanagh, 155 F.3d 129, 135 (2d Cir. 1998)(listing the factors courts consider in assessing a prospective injunction). In moving to preclude this evidence, Shkreli argues that the plaintiffs will not be able to prove that Retrophin actually impeded generic competition with either Chenodal or Thiola. It is Shkreli’s planning for and initiation of a similar anticompetitive scheme at Retrophin, assuming that the plaintiffs establish that plan and initiation, that is relevant to Shkreli’s scienter while at Vyera, not whether the Retrophin scheme succeeded. Shkreli argues as well that absent evidence of actual harm to competition, Shkreli’s intent is irrelevant. The plaintiffs seek to prove at trial both that Shkreli conspired to block generic competition with Vyera’s drug 6
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
