In re Canadian Import Antitrust Litigation, No. CIV.04-2724 JNE/JGL.

CourtUnited States District Courts. 8th Circuit. United States District Court of Minnesota
Writing for the CourtEricksen
Citation385 F.Supp.2d 930
Decision Date26 August 2005
Docket NumberNo. CIV.04-2724 JNE/JGL.
385 F.Supp.2d 930
No. CIV.04-2724 JNE/JGL.
United States District Court, D. Minnesota.
August 26, 2005.

Page 931

Daniel E. Gustafson, Karla M. Gluek, Gustafson Gluek PLLC, Minneapolis, MN, Dom J. Rizzi, Jennifer W. Sprengel, Marvin A. Miller, Nyran Rose Pearson, Miller Faucher and Cafferty LLP, James Shedden, Steven J. Tomiello, Tony Kim, Lawrence W. Schad, Beeler Schad & Diamond, Chicago, IL, James R. Malone, Jr., Chimicles & Tikellis, Haverford, PA, L. Kendall Satterfield, Mila F. Bartos, Richard M. Volin, Finkelstein Thompson & Loughran, Washington, DC, Mark S. Goldman, Weinstein Kitchenoff Scarlato Karon & Goldman, William R. Kane, Miller Faucher & Cafferty LLP, Philadelphia, PA, for Plaintiffs.

Bernard Nash, Maria Colsey Heard, Milton Marquis, Peter J. Kadzik, Jodi Trulove, Dickstein Shapiro Morin & Oshinsky, George S. Cary, Sara D. Schotland, Cleary Gottlieb Steen & Hamilton Llp, John M. Townsend, Robert P. Reznick, Scott H. Christensen, Hughes Hubbard & Reed Llp, Anne P. Davis, Douglas L. Wald, Mark R. Merley, Ryan Z. Watts, Arnold & Porter, Washington, DC, Gary J. Haugen, Michael C. McCarthy, Maslon Edelman Borman & Brand, Michael A. Lindsay, Michelle S. Grant, Dorsey & Whitney, Daniel R. Shulman, Dean C. Eyler, Gray Plant Mooty Mooty & Bennett, David Powell Graham, Gary Maynard Hansen, Oppenheimer Wolff & Donnelly LLP, J. Aron Allen, Lewis A. Remele, Jr., Bassford Remele, James A. O'Neal, John F. Beukema, Faegre & Benson, Mark Alan Jacobson, Robert V. Atmore, David M. Sullivan, Lindquist & Vennum, John A. Cotter, Larkin Hoffman Daly & Lindgren Ltd., Minneapolis, MN, Anne M. Voigts, Munger, Tolles & Olson LLP, San Francisco, CA,

Page 932

Jeffrey I. Weinberger, Stuart N. Senator, Munger Tolles & Olson, Los Angeles, CA, Dennis P. Orr, Grant J. Esposito, Mayer Brown Rowe & Maw, Amelia T. R. Starr, Arthur F. Golden, Davis Polk & Wardwell, New York, NY, Nicholas M. Lewandowski, Larkin Hoffman Daly & Lindgren, Bloomington, MN, for Defendants.


ERICKSEN, District Judge.

Plaintiffs claim that Defendants violated federal antitrust law, various states' restraint-of-trade statutes, and common law by engaging in a course of conduct designed to suppress the importation of prescription drugs purchased from Canadian pharmacies for personal use in the United States. This case is before the Court on two separate Report and Recommendations issued by the Honorable Jonathan Lebedoff, Chief United States Magistrate Judge, on February 28, 2005 (February Report), and March 18, 2005 (March Report), respectively. Objections to both Report and Recommendations and responses thereto have been filed.

In the February Report, the magistrate judge recommended that the Court dismiss Plaintiffs' federal antitrust claim (Count I of Pls. Consol. Compl.) because Plaintiffs lack standing to challenge Defendants' allegedly anti-competitive conduct under the Sherman Act. In addition, the magistrate judge concluded that federal law does not preempt Plaintiffs' state-law claims (Count II) and that the Court has not been provided a legal framework to universally strike Plaintiffs' equitable claims (Count III), which are traditionally reviewed under state law. Accordingly, the magistrate judge recommended denying Defendants' motion to dismiss Plaintiffs' claims under state and common law.

In the March Report, the magistrate judge considered Defendant Novartis AG's and Defendant AstraZeneca PLC's motions to dismiss for lack of jurisdiction and improper venue. The magistrate judge recommended that these motions be granted in part and denied in part and that Counts II and III of Plaintiffs' Consolidated Complaint, as alleged against Novartis and AstraZeneca, be dismissed.

Based on a de novo review of the record, the Court adopts the magistrate judge's recommendation that Plaintiffs' federal antitrust claim be dismissed and declines to adopt the magistrate judge's remaining recommendations for the reasons stated below.

I. February Report

With respect to the magistrate judge's recommendation that Plaintiffs' federal claim be dismissed, the magistrate judge concluded that prescription drugs imported from Canada for personal use are misbranded under the Federal Food, Drug, and Cosmetic Act (FFDCA). In addition, the magistrate judge found that the transport of drugs for personal use into the United States constitutes an "introduction into interstate commerce" under the FFDCA. Further, the magistrate judge concluded that Plaintiffs lack standing to challenge Defendants' allegedly anti-competitive behavior because the importation of these drugs is unlawful and, therefore, not the type of activity which federal antitrust laws were designed to protect.

Plaintiffs object only to the magistrate judge's conclusion that misbranding occurs when prescription drugs purchased by American consumers in...

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