In re Loestrin 24 Fe Antitrust Litig., MDL No. 13-2472

CourtUnited States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
Citation433 F.Supp.3d 274
Docket NumberMDL No. 13-2472,Master File No. 1:13-md-2472-WES-PAS
Parties IN RE LOESTRIN 24 FE ANTITRUST LITIGATION This Document Relates to: All Actions
Decision Date17 December 2019

William E. Smith, District Judge

With trial fast approaching, Defendants seek summary disposition of this case. The Court disagrees that issues presented may be disposed of summarily — although some issues are fairly close calls – and therefore denies Defendants' motion for summary judgment, ECF No. 842. The reasons are explained below. The Court also, for the reasons set forth below, denies the pending cross-motions for summary judgment on market power, ECF Nos. 496, 569. And finally, related to all motions for summary judgment, the Court resolves in this order several of the pending Daubert motions.

I. Background

Warner Chilcott launched Loestrin 24 ("Loestrin"), an oral contraceptive, in 2006 after the Food and Drug Administration ("FDA") approved its New Drug Application ("NDA"); Warner Chilcott then listed its new drug in the FDA's Orange Book as covered by U.S. Patent No. 5,552,394 (" '394 patent"). See Pls.' Statement of Disputed Facts ("PSOF") ¶¶ 1, 48-51, ECF No. 979. The company sold Loestrin until 2013, when it discontinued its manufacture and switched to making the drug Minastrin 24 ("Minastrin") under a new NDA. See id. ¶¶ 2-3, 192. Minastrin had the same active ingredients and dosing schedule, but Warner Chilcott added labeling informing customers that the pills could be chewed and added spearmint to the inactive pills to distinguish it from Loestrin. See id. ¶¶ 2, 192.

An AB-rated generic version of Loestrin was not marketed until 2014, despite attempts by three separate companies to introduce one sooner. Id. ¶¶ 52, 58, 62, 110. Pursuant to the protocol envisioned by the Hatch-Waxman Act, Warner Chilcott sued all three for infringing the '394 patent. Id. ¶¶ 52, 58, 62. These suits ended in settlements in which Warner Chilcott allegedly compensated the generic manufacturers to refrain from entry until a specific date, six months before the '394 patent expired. See id. ¶¶ 52-53, 58, 60, 62, 65. Since the first generic entered in 2014, six additional Loestrin generics have come to market, as have multiple Minastrin generics. Id. ¶¶ 110, 209, 212.

Plaintiffs' case — detailed in this Court's most recent motion-to-dismiss decision, with which the Court assumes familiarity — is simply that generics should have been available for them to purchase earlier. See In re Loestrin 24 Fe Antitrust Litig., 261 F. Supp. 3d 307, 324-25 (D.R.I. 2017) (" Loestrin II"). And indeed they would have been but for Defendants' allegedly anticompetitive conduct, including: protecting Loestrin with a patent Warner Chilcott knew was invalid; filing sham patent infringement lawsuits against prospective generic entrants; settling those suits to split monopoly profits; and formulating a new drug (Minastrin) only to limit generic substitution. Id.

II. Discussion

The Court has before it three motions for summary judgment, and the standard necessary to resolve these motions is well established. Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56. The nonmovant defeats a summary-judgment motion by marshaling evidence that would allow a jury to decide a material fact in its favor. Theriault v. Genesis HealthCare LLC, 890 F.3d 342, 348 (1st Cir. 2018). Although given the benefit of all reasonable inferences, nonmovants may not rely on "conclusory allegations, improbable inferences, and unsupported speculation." Mulloy v. Acushnet Co., 460 F.3d 141, 145 (1st Cir. 2006) (citation omitted). Where appropriate, in a case like this one, "the plaintiffs must present a ‘genuinely disputed issue of material fact’ as to the elements of the rule of reason analysis; only then will the case go to a jury." In re Namenda Direct Purchaser Antitrust Litig., 331 F. Supp. 3d 152, 198 (S.D.N.Y. 2018) (" Namenda I") (quoting In re Wellbutrin XL Antitrust Litig., 133 F. Supp. 3d 734, 754 (E.D. Pa. 2015), aff'd sub nom. In re Wellbutrin XL Antitrust Litig. Indirect Purchaser Class, 868 F.3d 132 (3d Cir. 2017), judgment entered sub nom. In re Wellbutrin XL Antitrust Litig., No. 15 Civ. 2875, 2017 WL 3529114 (3d Cir. Aug. 9, 2017) (" Wellbutrin XL I")).

Here, there are many Daubert motions standing between the Court and the evidence it may consider in deciding these motions. These need to be resolved in order to consider (or not) the proffered expert opinions in support of, and in opposition to, summary judgment. See Namenda I, 331 F. Supp. 3d at 168 ("If the expert testimony is excluded as inadmissible, the court must make the summary judgment determination without that evidence.") (citation omitted).

In its role as gatekeeper, the Court "may exercise wide discretion to admit or exclude such testimony consistent with its obligation to ensure that the jury receives only relevant and reliable expert evidence."

Alifax Holding SpA v. Alcor Sci. Inc., 387 F. Supp. 3d 170, 173 (D.R.I. 2019). Rule 702 of the Federal Rules of Evidence provides that a qualified witness may testify if "the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; [ ] the testimony is based on sufficient facts or data; [ ] the testimony is the product of reliable principles and methods; [ ] and the expert has reliably applied the principles and methods to the facts of the case." Fed. R. Evid. 702.

Experts, of course, do not have "carte blanche" to express any opinion, no matter its limitations or lawfulness. Ruiz-Troche v. Pepsi Cola of Puerto Rico Bottling Co., 161 F.3d 77, 80 (1st Cir. 1998). The Supreme Court has interpreted Rule 702 to direct "the trial judge to evaluate an expert's proposed testimony for both reliability and relevance prior to admitting it." Id. (citing Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589–95, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) ). This "flexible inquiry into the overall reliability of a proffered expert's methodology" involves review of such factors as "the verifiability of the expert's theory or technique, the error rate inherent therein, whether the theory or technique has been published and/or subjected to peer review, and its level of acceptance within the scientific community." Id. at 81. Put simply, the expert's opinion and testimony should "impart[ ] ‘scientific knowledge’ rather than guesswork." Id. (quoting Daubert, 509 U.S. at 592, 113 S.Ct. 2786 ). The Court will rule on the relevant Daubert motions as necessary to decide the summary judgment motions.

With these guideposts in mind, the Court first turns to the threshold issue of market power, then moves on to the merits issues, and finally state law and damages issues.

A. Market Power Summary Judgment1

Market power is a hotly contested, threshold issue. See Flovac, Inc. v. Airvac, Inc., 817 F.3d 849, 853 (1st Cir. 2016). Plaintiffs' Sherman Act claims require them to show Defendants possessed market power, "meaning the power to control prices or exclude competition." E. Food Servs., Inc. v. Pontifical Catholic Univ. Servs. Ass'n, Inc., 357 F.3d 1, 5 (1st Cir. 2004) ; United States v. E. I. du Pont de Nemours & Co., 351 U.S. 377, 391, 76 S.Ct. 994, 100 L.Ed. 1264 (1956) ; see also 15 U.S.C. §§ 1 - 2. Section 2 requires a greater degree of market power — referred to as monopoly power — than Section 1. Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 481, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992).

To be frank, the law and economics of market power is a confusing mess. See Louis Kaplow, Why (Ever) Define Markets?, 124 Harv. L. Rev. 437, 440 (2010) ("Defects [of the market definition/market share paradigm] have been identified by courts, enforcement agencies, and both legal and economic commentators. No one believes that the market definition process is flawless or that market power inferences drawn from market shares are uniformly reliable, or even nearly so."). And when applied in the pharmaceutical context, it really shows its warts. But this much we know: Market power and monopoly power can be established by the same kind of evidence, either direct or indirect. Direct evidence of market power includes proof such as supracompetitive prices or reduced output. Ohio v. Am. Express Co., ––– U.S. ––––, 138 S.Ct. 2274, 2283-85, 201 L.Ed.2d 678 (2018) ( Section 1 ) ("Direct evidence of anticompetitive effects [is] proof of ... reduced output, increased prices, or decreased quality in the relevant market." (citation omitted)).2 Proof of market power can also come indirectly by defining a market and determining the defendant's share of that market. Coastal Fuels of P.R. v. Caribbean Petroleum Corp., 79 F.3d 182, 197 (1st Cir. 1996) ; Flovac, 817 F.3d at 853-54.

Case law suggests that when direct evidence is dispositive, indirect evidence is unnecessary. F.T.C. v. Ind. Fed'n of Dentists, 476 U.S. 447, 460-61, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986) ; In re Nexium (Esomeprazole) Antitrust Litig., 968 F. Supp. 2d 367, 388 n.19 (D. Mass. 2013) ("Nexium

I") ("Where direct evidence of market power is available ... a plaintiff need not attempt to define the relevant market."). This is because "inquiries into market definition and market power ... [are] but a surrogate for detrimental effects" on competition. Ind. Fed'n of Dentists, 476 U.S. at 460-61, 106 S.Ct. 2009 (citation omitted); Coastal Fuels, 79 F.3d at 197 ("[F]inding the relevant market and its structure is not a goal in itself but a surrogate of market power[.]") (citation omitted); In re Aggrenox Antitrust Litig., 94 F. Supp. 3d 224, 246 (D. Conn. 2015) ("Aggrenox I") ("[W]hen direct...

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