837 F.3d 238 (3rd Cir. 2016), 15-3475, In re Modafinil Antitrust Litigation

Docket Nº:15-3475
Citation:837 F.3d 238, 95 Fed.R.Serv.3d 1396
Opinion Judge:SMITH, Circuit Judge.
Party Name:IN RE: MODAFINIL ANTITRUST LITIGATION. Mylan Laboratories, Inc.; Mylan Pharmaceuticals Inc.; Ranbaxy Laboratories, Ltd; Ranbaxy Pharmaceuticals, Inc., Appellants
Attorney:Daniel Berger, Daniel C. Simons, David F. Sorensen, Berger & Montague, Philadelphia, PA; Erin C. Burns, Dianne M. Nast, NastLaw, Philadelphia, PA; Russell A. Chorush, Connelly Baker Wotring, Houston, TX; Neill Wilson Clark, Peter Kohn, Esq., Faruqi & Faruqi, Jenkintown, PA; Stuart E. Des Roches, ...
Judge Panel:Before: SMITH, JORDAN, and RENDELL, Circuit Judges. RENDELL, Circuit Judge, concurring in part and dissenting in part. RENDELL, Circuit Judge, concurring in part and dissenting in part.
Case Date:September 13, 2016
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
SUMMARY

Cephalon’s patent, issued in 1997, claimed a specific distribution of modafinil, used to treat sleep disorders. Cephalon obtained Reissue Patent 516 in 2002. Cephaolon’s use of modafinil was patent-protected until April 2015. In 1998, the FDA approved Cephalon’s New Drug Application (NDA) for the brand-name drug Provigil and granted New Chemical Entity exclusivity until December 2005, as an... (see full summary)

 
FREE EXCERPT

Page 238

837 F.3d 238 (3rd Cir. 2016)

IN RE: MODAFINIL ANTITRUST LITIGATION. Mylan Laboratories, Inc.; Mylan Pharmaceuticals Inc.; Ranbaxy Laboratories, Ltd; Ranbaxy Pharmaceuticals, Inc., Appellants

No. 15-3475

United States Court of Appeals, Third Circuit

September 13, 2016

Argued July 12, 2016

As Amended September 29, 2016.

Page 239

[Copyrighted Material Omitted]

Page 240

[Copyrighted Material Omitted]

Page 241

On Appeal from the United States District Court for the Eastern District of Pennsylvania. District Court No. 2-06-cv-01797. District Judge: The Honorable Mitchell S. Goldberg.

Daniel Berger, Daniel C. Simons, David F. Sorensen, Berger & Montague, Philadelphia, PA; Erin C. Burns, Dianne M. Nast, NastLaw, Philadelphia, PA; Russell A. Chorush, Connelly Baker Wotring, Houston, TX; Neill Wilson Clark, Peter Kohn, Esq., Faruqi & Faruqi, Jenkintown, PA; Stuart E. Des Roches, Andrew W. Kelly, Chris Letter, Odom & Des Roches, New Orleans, LA; Bruce E. Gerstein [ARGUED], Dan Litvin, Joseph Opper, Garwin Gerstein & Fisher, New York, NY; Miranda Y. Jones, Heim Payne & Chorush, Houston, TX; Linda P. Nussbaum, Nussbaum Law Group, New York, NY, Counsel for Appellees.

Evan R. Chesler, David R. Marriott, Rowan D. Wilson [ARGUED], Cravath Swaine & Moore, New York, NY; David L. Comerford, Katherine M. Katchen, Akin Gump Strauss Hauer & Feld, Philadelphia, PA;, Cohn & Marks, Washington, DC; C. Fairley SpillmanCatherine E. CreelyPaul B. Hewitt, ,, Akin Gump Strauss Hauer & Feld, Washington, DC; J. Douglas Baldridge [ARGUED], Christopher K. Diamond, Danielle R. Foley, Molly Geissenhainer, Venable, Washington, DC; John J. O'Malley, Anthony S. Volpe, Volpe & Koenig, Philadelphia, PA; Erin C. Dougherty, Lathrop B. Nelson, III, Montgomery McCracken Walker & Rhoads, Philadelphia, PA; Katherine R. Katz, Karen N. Walker, Gregory L. Skidmore, Kirkland & Ellis, Washington, DC; James C. Burling, Mark A. Ford, WilmerHale, Boston, MA; Frank R. Emmerich, Jr., Nancy J. Gellman, John A. Guernsey, Conrad O'Brien, Philadelphia, PA; Emily R. Whelan, Whatley Kallas, Boston, MA; Jeffrey B. Korn, William H. Rooney, Willkie, Farr & Gallagher, New York, NY; Joseph E. Wolfson, Stevens & Lee, King of Prussia, PA, Counsel for Appellants.

Anna T. Neill, Scott E. Perwin, Lauren C. Ravkind, Kenny Nachwalter, Miami, FL; Moira E. Cain-Mannix, Bernard D. Marcus, Marcus & Shapira, Pittsburgh, PA; Monica L. Rebuck, Barry L. Refsin, Hangley Aronchick Segal Pudlin & Schiller, Harrisburg, PA; Eugene P. Endress, Matthew M. Holub, Thomas J. Maas, Brian Sodikoff, Katten Muchin Roseman, Chicago, IL; James W. Matthews, Foley & Lardner, Boston, MA, Counsel For Amicus Appellee.

Before: SMITH, JORDAN, and RENDELL, Circuit Judges. RENDELL, Circuit Judge, concurring in part and dissenting in part.

OPINION

Page 242

SMITH, Circuit Judge.

" The class action is an ingenious device for economizing on the expense of litigation and enabling small claims to be litigated. The two points are closely related. If every small claim had to be litigated separately, the vindication of small claims would be rare. The fixed costs of litigation make it impossible." Thorogood v. Sears, Roebuck and Co., 547 F.3d 742, 744 (7th Cir. 2008). But not every group of plaintiffs should be granted class action status, because " [t]he class action is an 'exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-01, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979)).

When thinking of a class action brought under Rule 23(b)(3), we typically think of a large aggregation of individuals (hundreds or even thousands), each with small claims. This case is quite different from that. Here, we are faced with a putative class of twenty-two large and sophisticated corporations, most of which have multi-million dollar claims, who wish to take advantage of the class action device. While we do not foreclose the possibility of class status in this case, or where the putative class is of similar composition, Plaintiffs have not met their burden of showing that the numerosity requirement of Rule 23(a)(1) has been satisfied. We now provide a framework for district courts to apply when conducting their numerosity analyses, and we will remand to the District Court to allow such an analysis in this case.

I.

A. Regulatory Framework

The 1984 Drug Price Competition and Patent Term Restoration Act (the " Hatch-Waxman Act" ), 98 Stat. 1585, as amended, provides a regulatory framework designed in part to (1) ensure that only rigorously tested drugs are marketed, (2) incentivize drug manufacturers to invest in new research

Page 243

and development, and (3) encourage generic entry into the marketplace. The Hatch-Waxman Act requires a drug manufacturer wishing to market a new brand-name drug to first submit a New Drug Application (" NDA" ) to the federal Food and Drug Administration (" FDA" ), and then undergo a long, complex, and costly testing process. See 21 U.S.C. § 355(b)(1) (requiring, among other things, " full reports of investigations" into safety and effectiveness; " a full list of the articles used as components" ; and a " full description" of how the drug is manufactured, processed, and packed); see also F.T.C. v. Actavis, Inc., 133 S.Ct. 2223, 2228-29, 186 L.Ed.2d 343 (2013) (describing the statutory framework). If this process is successful, the FDA will grant the drug manufacturer approval to market the brand-name drug. After this approval, a generic manufacturer can obtain similar approval by submitting an Abbreviated New Drug Application (" ANDA" ) that " shows that the generic drug has the same active ingredients as, and is biologically equivalent to, the brand-name drug." Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 132 S.Ct. 1670, 1676, 182 L.Ed.2d 678 (2012) (citing 21 U.S.C. § § 355(j)(2)(A)(ii), (iv)). This way, a generic manufacturer is not required to undergo the same costly approval procedures to develop a drug that has already satisfied the FDA. Actavis, 133 S.Ct. at 2228 (" The Hatch-Waxman process, by allowing the generic to piggy-back on the pioneer's approval efforts, 'speed[s] the introduction of low-cost generic drugs to market,' thereby furthering drug competition." (quoting Caraco, 132 S.Ct. at 1676)).

The FDA will not give final approval to produce a generic version of a drug that is entitled to non-patent exclusivity under the Hatch-Waxman Act, and it " cannot authorize a generic drug that would infringe a patent."

Caraco, 132 S.Ct. at 1676. Thus, among other things, an ANDA's approval will depend on " the scope and duration of the patents covering the brand-name drug." Id. Brand manufacturers are required to include the patent number and expiration date of the patent that covers the drug or that covers a method of using that drug in their NDAs, which are then published by the FDA in the Orange Book, more formally known as the Approved Drug Products with Therapeutic Equivalence Evaluations. Id. (citing 21 U.S.C. § 355(b)(1) and 21 C.F.R. § § 314.53(c)(2)(ii)(P)(3), (3) (2011)). Once a patent has been listed in the Orange Book, the generic manufacturer is free to file an ANDA if it can certify that its proposed generic drug will not actually violate the brand manufacturer's patents. Id. Under 21 U.S.C. § 355(j)(2)(A)(vii), there are four ways in which a generic manufacturer can make this certification: (I) that such patent information has not been filed,

(II) that such patent has expired,

(III) of the date on which such patent will expire, or

(IV) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted.

An ANDA with a paragraph IV certification may only be filed after the expiration of the fourth year of the New Chemical Entity (" NCE" ) five-year exclusivity period.1 21 U.S.C. § 355(j)(5)(F)(ii). The " 'paragraph IV' route[] automatically counts as patent infringement." Actavis, 133 S.Ct. at 2228 (citing 35 U.S.C. § 271(e)(2)(A)).

Page 244

As a result, this often " means provoking litigation" instituted by the brand manufacturer. Caraco, 132 S.Ct. at 1677.

If the brand manufacturer initiates a patent infringement suit, the FDA must withhold approval of the generic for at least 30 months while the parties litigate the validity or infringement of the patent. Actavis, 133 S.Ct. at 2228 (citing 21 U.S.C. § 355(j)(5)(B)(iii)). If the suit has concluded at the end of this 30-month period, then the FDA will follow the outcome of the litigation. Id. However, if the litigation is still proceeding, the FDA may give its approval to the generic drug manufacturer to begin marketing...

To continue reading

FREE SIGN UP