In Re: Warfarin Sodium Antitrust Litigation, 99-5034

• Decision Date: 30 May 2000
• Docket Number: No. 99-5034,99-5034
• Citation: 214 F.3d 395
• Parties: (3rd Cir. 2000) IN RE: WARFARIN SODIUM ANTITRUST LITIGATION JOHN KUSNERIK; SARA ALTMAN; SAMUEL GORDON TISCHLER; MARIE A. STECKEL; ROBERT BAREISS; JOHN CIVATTE, JR.; MARY BANTEN, Appellants
• Court: U.S. Court of Appeals — Third Circuit

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214 F.3d 395 (3rd Cir. 2000) IN RE: WARFARIN SODIUM ANTITRUST LITIGATION JOHN KUSNERIK; SARA ALTMAN; SAMUEL GORDON TISCHLER; MARIE A. STECKEL; ROBERT BAREISS; JOHN CIVATTE, JR.; MARY BANTEN, Appellants No. 99-5034 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT Argued March 24, 2000
Filed May 30, 2000

Appeal from the United States District Court for the District of Delaware (D.C. Civ. No. 98-cv-01232) District Judge: Honorable Sue L. Robinson

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Bernard Persky, Esquire (Argued) Barbara J. Hart, Esquire Ngozi Okaro, Esquire Goodkind, Labaton, Rudoff & Sucharow LLP 100 Park Avenue New York, NY 10017, Pamela S. Tikellis, Esquire Robert J. Kriner, Jr., Esquire Chimicles & Tikellis One Rodney Square Wilmington, DE 19801, Marvin A. Miller, Esquire Jennifer Winter Sprengel, Esquire Michael C. Dell'Angelo, Esquire Miller, Faucher, Cafferty and Wexler, LLP One Penn Square West Suite 2500 Philadelphia, PA 19102, Michael A. Hanzman, Esquire Michael A. Criden, Esquire Alan H. Rolnick, Esquire Hanzman, Criden, Chaykin & Ponce, P.A. 2100 First Union Financial Center 200 South Biscayne Boulevard Miami, FL 33131, James R. Capretz, Esquire Capretz & Associates, LLP 5000 Birch Street Suite 2500, West Tower Newport Beach, CA 92660, Mel Lifshitz, Esquire Mary Hoover, Esquire Bernstein Liebhard & Lifshitz, LLP 10 East 40th Street New York, NY 10016, Paul Goltz, Esquire 840 Allegheny Building Pittsburgh, PA 15219, Counsel for Appellants

George D. Ruttinger, Esquire (Argued) Jeane A. Thomas, Esquire Crowell & Moring, LLP 1001 Pennsylvania Avenue, N.W. Washington, D.C. 20004, Donald J. Wolfe, Esquire Potter Anderson & Corroon LLP Hercules Plaza 1313 North Market Street Wilmington, DE 19801, Counsel for Appellee

Before: MANSMANN, GREENBERG and BARRY, Circuit Judges.

OPINION OF THE COURT

MANSMANN, Circuit Judge.

Consumers of the prescription drug Coumadin, anxious to purchase its generic equivalent, ask us to determine if complaints filed by them sufficiently state a claim for injunctive relief under section 16 of the Clayton Act against Coumadin's manufacturer. We find that in dismissing the complaints under Fed. R. Civ. P. 12(b)(6), the District Court improperly referred to matters beyond the complaints and did not correctly analyze the legal standard for antitrust standing. For these reasons, we will reverse and remand.

I.

Coumadin, known generically as warfarin sodium, is the brand name of a blood-thinning drug prescribed for the prevention and treatment of blood clots.¹ Treating physicians carefully monitor patients taking the drug because, as the parties stipulated, too little a dose can lead to a stroke or cardiac arrest and too much can cause internal bleeding.

The defendant, DuPont Pharmaceuticals Company, manufactures Coumadin. Although the patent protection for Coumadin expired in April 1962, DuPont has dominated the oral anti-coagulant market for over 30 years. Until one of the plaintiffs to this action, Barr Laboratories, Inc., introduced

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its generic tablets, no equivalent product competed with DuPont's Coumadin.

Barr Laboratories and the present plaintiffs filed lawsuits alleging that DuPont, anticipating a loss of market share resulting from the introduction of a cheaper generic substitute for Coumadin, orchestrated a campaign disparaging generic substitutes generally, and Barr Laboratories' warfarin sodium particularly. The cumulative effect of these attacks was to raise Barr Laboratories' cost to enter the anti-coagulant market and to disable its market penetration. The by-product claim brought by the individual plaintiffs is that, due to DuPont's effort to derail generic competition, they have paid inflated prices for Coumadin.

The specific allegations of DuPont's anti-competitive activity in the relevant market concern DuPont's attempt to prevent and/or delay Food and Drug Administration approval of warfarin sodium in a generic form, publication and dissemination of false and misleading information to the public regarding generic warfarin sodium, undertaking aggressive public relations efforts involving the circulation of deceptive information and increasing Coumadin's marketing efforts by feeding misinformation to doctors and other medical professionals.

Citing these unlawful attempts to monopolize, Barr Laboratories filed suit against DuPont, alleging various antitrust law violations. Barr Laboratories also asserted claims under the Lanham Act, New York state law and common law. Four named individuals, each claiming to represent a nationwide class of 1.8 million Coumadin users, filed separate complaints for monetary damages and injunctive relief, alleging that DuPont violated section 2 of the Sherman Act and various state laws. These class plaintiffs also sought treble damages under section 4 of the Clayton Act and injunctive relief under section 16 of the Clayton Act.

DuPont filed a motion to dismiss both Barr Laboratories' and the class plaintiffs' claims for failure to state a claim upon which relief could be granted under Fed. R. Civ. P. 12(b)(6).

The District Court granted in part and denied in part DuPont's motion to dismiss Barr Laboratories' lawsuit.² The class complaints were dismissed in their entirety.

The only issue relevant to this appeal is the District Court's decision that the class plaintiffs lack standing to seek injunctive relief under section 16 of the Clayton Act. The District Court summarily concluded that because the class had not sufficiently alleged either antitrust injury or a causal connection between DuPont's alleged unlawful activity and the supposed injury of Coumadin users, it failed to assert injury of the type the Sherman Act was designed to prevent. As such, the class did not have standing to request injunctive relief.

Our jurisdiction to review this dismissal is authorized by 28 U.S.C. S 1291.

II.

Rule 12(b)(6)

We first explore whether the District Court erroneously considered matters beyond the scope of the complaints in rendering its antitrust standing determination. Our review of a District Court's decision to dismiss a lawsuit for failure to state a claim upon which relief can be granted under Fed. R. Civ. P. 12(b)(6) is plenary. Port Authority of New York and New Jersey v. Arcadian Corp., 189 F.3d 305, 311 (3d Cir. 1999). The motion to dismiss should be granted only if "after accepting as true all of the facts alleged in the complaint, and drawing all reasonable inferences in the plaintiff 's favor, no relief could be granted under any set of facts consistent with the allegations in the complaint."

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Trump Hotels and Casino Resorts, Inc. v. Mirage Resorts, Inc., 140 F.3d 478, 483 (3d Cir. 1998).

Although the District Court recited this Rule 12(b)(6) standard in making its decision, the court impermissibly cited and relied on facts beyond the corners of the complaints. Excerpts from the District Court opinion illustrate this point:

Although class plaintiffs do not discuss third party payor arrangements, it is almost certain that most of the 1.8 million class members had some sort of health insurance.

* * *

If defendants' monopolization of the oral anticoagulant market resulted in supracompetitive prices for Coumadin, the insurance and third party payor organizations most likely absorb some or all of that overcharge.

* * *

Moreover, the sheer variety of third party payor plans would render the apportionment of damages among the class plaintiffs incredibly complex.

(Emphasis added.)

While these factors loomed large in the District Court's conclusion regarding the absence of a significant nexus between DuPont's activity and the classes' injury, the complaints are notably silent regarding the impact of third party payor and prescription drug insurance plans on the price paid for Coumadin. The complaints instead alleged that the class members paid inflated prices for Coumadin because DuPont thwarted the generic's market entry. The District Court should have accepted this as true, analyzed if DuPont's preclusive conduct was violative of antitrust laws, and then decided whether to dismiss the complaints. Instead, in granting the motion, the District Court considered facts gleaned from counsel's argument and from its own experience, factors not contemplated by the dictates of Rule 12(b)(6).

DuPont submits a number of reasons why the District Court's consideration of factual assumptions de hors the...