Mylan Laboratories v. Pharmaceutical Basics
| Decision Date | 08 December 1992 |
| Docket Number | Civ. A. No. S 90-1096. |
| Citation | 808 F. Supp. 446 |
| Parties | MYLAN LABORATORIES, INC., Plaintiff, v. PHARMACEUTICAL BASICS, INC., et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
W. Stephen Cannon and Joseph H. Gibson, Wunder, Diefenderfer, Ryan, Cannon & Thielen, Washington, DC, Michael C. Silverberg, Morvillo, Abramowitz, Grand, Iason & Silverberg, P.C., New York City, Andrew G. Fusco, Fusco & Newbraugh, Morgantown, WV, Price O. Gielen, Neuberger, Quinn & Gielen, Baltimore, MD, for plaintiffs, Mylan Laboratories, Inc.
Donald J. Mulvihill, Cahill, Gordon & Reindel, Washington, DC, for defendants Pharmaceutical Basics, Inc.
Richard M. Cooper, Richard S. Hoffman, and David Kiernan, Williams & Connolly, Washington, DC, for defendants Par Pharmaceutical, Inc., and Quad Pharmaceuticals, Inc.
Ty Cobb and Janet McDavid, Hogan & Hartson, Washington, DC, for defendants American Therapeutics, Inc.
John Sullivan, Lord, Day & Lord, Barrett Smith, New York City, for defendants Vitarine Pharmaceuticals, Inc.
Peter Zimroth and Kenneth Handal, Arnold & Porter, New York City for defendants American Home Products Corp. and Quantum Pharmics, Ltd.
Hamilton P. Fox, III, Sutherland, Asbill & Brennan, Washington, DC, for defendant Raj Matkari.
Andrew Krulwich and Walter Andrews, Wiley, Rein & Fielding, Washington, DC, for defendant Ashok Patel.
Steve Salky, Zuckerman, Spaeder, Goldstein, Taylor & Kolker, Washington, DC, for defendant Dilip Shah.
Michael P. Bell, Selzer & Roberge, Rockville, MD, for defendant Salvatore J. Pinella.
This case is currently before the Court on multiple defense motions: defendant Pharmaceutical Basics, Inc.'s ("PBI") Motion to Dismiss Count Three of Plaintiff's Third Amended Complaint for Failure to State a Claim or, in the alternative, for Partial Summary Judgment, and its Motion for Judgment on the Pleadings; defendants American Home Products Corporation's ("AHP") and Quantum Pharmics, Ltd.'s ("Quantum") Motion to Dismiss the Third Amended Complaint for Failure to State a Claim; defendants Par Pharmaceutical, Inc.'s ("Par") and Quad Pharmaceuticals, Inc.'s ("Quad") Motion for Judgment on the Pleadings, as well as their Motion to Join the Motions to Dismiss of PBI, AHP and Quantum; defendant Dilip Shah's Motion for Judgment on the Pleadings and to Join Motions of Other Defendants; defendant Salvatore J. Pinella's Motion to Dismiss the Third Amended Complaint and to Join Motions of Other Defendants; and defendant Raj Matkari's Motion for Judgment on the Pleadings, and Motion to Join the Motions of AHP and Quantum to Dismiss the Third Amended Complaint, as well as his Motion to Join the Motions of Par and Quad for Judgment on the Pleadings. The plaintiff, Mylan Laboratories, Inc. ("Mylan") has responded, and many of the defendants have replied. No oral hearing is necessary. Local Rule 105.6 (D.Md.).
The facts of this case were set out in detail in an earlier opinion of the court. Mylan Laboratories, Inc. v. Akzo, N.V., 770 F.Supp. 1053, 1057-58 (D.Md.1991) (Ramsey, J.). Briefly, the plaintiff, Mylan, is a corporation which is in the business of developing, manufacturing, selling and distributing prescription drugs. The defendants include corporations which develop, manufacture, sell and distribute generic drugs (defendants PBI, AHP, Quantum, Par, Quad, Vitarine Pharmaceuticals, Inc. ("Vitarine") and American Therapeutics, Inc. ("ATI")), individuals who, at all relevant times, were employees or officers of these corporate defendants (defendants Raj Matkari, Ashok Patel, Dilip Shah, Raju Vegesna, Mohammed Azeem, Steven F. Colton and Jin-Shung Chang), and individuals who, at all relevant times, were employees of the Food and Drug Administration ("FDA") (Charles Chang, David Brancato, Walter Kletch, Jan Sturm and Salvatore Pinella).
Mylan alleges that the corporate defendants paid illegal gratuities to the FDA defendants, with the knowledge, direction, or participation of the corporate officers or employee defendants, in order to facilitate FDA approval of the corporate defendants' abbreviated new drug applications ("ANDA") for generic drugs. Mylan also alleges that the same defendants impeded FDA approval of Mylan's ANDAs for the same drugs, and that non-public information, obtained from the ANDAs of Mylan and other drug manufacturers, was transmitted to the corporate defendants by the FDA defendants. Mylan further alleges that some corporate defendants made false representations that they had produced a generic equivalent of a particular drug (Maxzide) without infringing Mylan's patent; that corporate defendants submitted false data to the FDA in order to obtain approval for ANDAs to which they were not entitled; and, finally, that corporate defendants unfairly competed with Mylan by use of false and misleading commercial advertising.
Mylan's first complaint in this case was filed on June 8, 1989, in the United States District Court for the District of Columbia. On March 27, 1990, Judge Hogan of that court determined that the case had been improperly filed in the District of Columbia and transferred the case to this Court.
Mylan filed a First Amended Complaint, consisting of 41 counts, with this Court on July 26, 1990. In an opinion dated August 15, 1991, Judge Ramsey dismissed Count 2 of Mylan's complaint as to defendants Matkari, Patel, Shah and Vegesna, as well as defendants AHP, Quantum and J. Chang. Judge Ramsey also dismissed Counts 3 through 40 of the complaint as against all defendants.
On March 9, 1992, Mylan moved to file a Second Amended Complaint. Judge Ramsey, however, denied the motion because of Mylan's failure to comply with Local Rule 103.6.c regarding the highlighting of amendments. Mylan supplied a highlighted copy of its complaint on June 11, 1992, as well as a revised Motion to Amend. In the interim, the case had been transferred from Judge Ramsey to me. After requiring Mylan to conform its Complaint to Judge Ramsey's ruling dismissing a former defendant from the case, Mylan's Motion to Amend was granted. On July 23, 1992, Mylan filed its Third Amended Complaint, which is the subject of the current gaggle of defense motions.
In the Third Amended Complaint, Mylan has alleged four counts against nineteen defendants. Counts One and Two arise under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. Count One is asserted against all of the defendants. Count Two is asserted against defendants PBI, Quad, ATI, Vitarine, AHP, Quantum, Azeem, J. Chang, C. Chang, Brancato, Kletch and Sturm.
Count Three arises under the Lanham Act, 15 U.S.C. § 1125, and is asserted against defendants AHP, Quantum, PBI and Par. Count Four arises under Maryland state law, with jurisdiction of this Court arising under 28 U.S.C. § 1332; it is a claim of unfair business competition and malicious interference with business relations, asserted against all of the defendants.
A motion to dismiss for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6), should not be granted unless the plaintiff can prove no set of facts which support his claim and which entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). In making this determination, the Court should construe the complaint, and the allegations contained therein, favorably to the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). The Court must not, however, consider conclusions of law or unwarranted deductions of fact. Mylan, 770 F.Supp. at 1059. Nor can the Court consider any facts, allegations or assertions made by the plaintiff which are contained in legal memoranda other than the complaint. It is well-founded that a complaint cannot be amended by the briefs in opposition to a motion to dismiss. Mylan, 770 F.Supp. at 1068.
Defendants Matkari, Pinella, Par, and Quad have made various motions to join, pursuant to Fed.R.Civ.P. 12(g). These motions will be granted, by an order to be entered separately.
The Court also notes that there have been several changes made by Mylan when preparing the Third Amended Complaint to conform with the removal of the former defendant Akzo N.V. from the case. See AHP's and Quantum's Motion to Dismiss, at 6, n. 3.1 These changes were brought to the Court's attention by the defendants in this case, and not by Mylan, which had a responsibility under Local Rule 103.6.c to highlight all changes made to the complaint. Indeed, Mylan simply acknowledges their existence, dismissing them as "minor errors." Mylan Response Memorandum, at 5, n. 3.
Mylan's cavalier attitude to its failure to alert this Court to yet another violation of the local rule against non-highlighted changes to the complaint, especially in the face of this Court's previous ruling, is astounding. Arduous though the task of checking every word of the complaint for additions may be, it was the task of Mylan, and not the defendants, to do so. Mylan's failure to draw the Court's attention to these changes, or to apologize for its actions, while not necessarily sufficient to merit a dismissal of this case for non-compliance with the Court's earlier ruling, or a sanctioning of those attorneys involved in the preparation of this deficient complaint, does no credit to any of those responsible for this present incarnation of Mylan's complaint.
Defendants AHP, Quantum, and PBI have moved for dismissal of Mylan's complaint for a violation of this Court's prior order. The defendants claim that Mylan's complaint is fundamentally, and fatally, flawed, that it has been from the inception of this litigation, and that Mylan, having been afforded multiple opportunities to produce a viable complaint, has failed to...
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