Plan v. Glaxosmithkline

Citation737 F.Supp.2d 380
Decision Date07 September 2010
Docket NumberCivil Action No. 04-5898
PartiesSHEET METAL WORKERS LOCAL 441 HEALTH & WELFARE PLAN, et al, Plaintiffs v. GLAXOSMITHKLINE, PLC, et al, Defendants.
CourtU.S. District Court — Eastern District of Pennsylvania
737 F.Supp.2d 380

SHEET METAL WORKERS LOCAL 441 HEALTH & WELFARE PLAN, et al, Plaintiffs
v.
GLAXOSMITHKLINE, PLC, et al, Defendants.


Civil Action No. 04-5898.

United States District Court,
E.D. Pennsylvania.


Sept. 7, 2010.

737 F.Supp.2d 387

Joseph H. Meltzer, Terence S. Ziegler, Barroway Topaz Kessler Meltzer & Check LLP, Radnor, PA, Joshua H. Grabar, Bolognese & Associates, LLC, Philadelphia, PA, Ann D. White, Ann D. White Law Offices, P.C., Jenkintown, PA, for Plaintiffs.

Amy R. Mudge, David P. Gersch, James W. Cooper, Jessica L. Medina, Johnnay D. Schrieber, Bryan M. Marra, Daniel S. Pariser, Gregory M. Gilchrist, Katherine M. Smith, Laura Cofer Taylor, Erika K. Woods, Arnold & Porter, LLP, Darren Nicholson, Washington, DC, Arthur Makadon, Edward D. Rogers, Job Michael Itzkowitz, Leslie E. John, Mark Stephen Stewart, Susanna R. Greenberg, Ballard, Spahr, Andrews And Ingersoll, LLP, Philadelphia, PA, Mark S. Stewart Mark S. Stewart & Associates Fort Worth, TX, for Defendants.

OPINION

STENGEL, District Judge.

In an order dated November 3, 2009, this Court granted in part and denied in part a motion filed by GlaxoSmithKline, et al ("GSK") for judgment on the pleadings, seeking dismissal of the end-payor plaintiffs' amended class action complaint. Plaintiffs, indirect purchasers of Wellbutrin SR, were granted leave to amend their complaint a second time to assert causes of action in those states where they purchased or into which they sent reimbursements for Wellbutrin SR. GSK has filed a motion to dismiss plaintiffs' second amended complaint, which asserts causes of action under eighteen state antitrust and/or consumer protection statutes and under the common law of unjust enrichment in twenty-seven states. For the reasons set forth below, I will grant the motion in part and deny it in part.

TABLE OF CONTENTS
I. INTRODUCTION 388
II. STANDARD OF REVIEW 389
III. PRELIMINARY CHOICE OF LAW QUESTION 390
IV. DISCUSSION OF STATE LAW CLAIMS 393
A. Plaintiffs' Monopolization Claims 393
1. Arizona 393
2. California 393
3. Florida 394
4. Massachusetts 395
5. Michigan 395
6. Minnesota 396
7. Nevada 397
8. New York 398
9. North Carolina 400
10. West Virginia 400
11. Wisconsin 401
B. Plaintiffs' Unfair and Deceptive Trade Practice Claims 402
1. Arizona 403
2. Arkansas 404
3. California 405
4. Colorado 406
5. Florida 408
6. Idaho 409
7. Massachusetts 411
8. Michigan 412
9. Minnesota 413
10. Missouri 414
11. Nevada 417
12. New York 417
13. North Carolina 418
14. Oklahoma 420
15. Pennsylvania 421
16. Rhode Island 422
C. Plaintiffs' Unjust Enrichment Claims 423
a. Can the Plaintiffs Bring Unjust Enrichment Claims in States Where Indirect Purchasers Have Been Barred From Pursuing State Antitrust and Consumer Protection Claims? 424
b. Can the Plaintiffs Bring Unjust Enrichment Claims Where Applicable State Antitrust And Consumer Protection Statutes Do Not Provide for an Equitable Remedy? 426
c. Do Plaintiffs Need to Show Conferral of a Direct Benefit In Order to Maintain an Unjust Enrichment Claim? 428
1. Alabama 429
2. Arkansas 429
3. Arizona 430
4. California 430
5. Colorado 431
6. Florida 432
7. Georgia 432
8. Idaho 433
9. Iowa 434
10. Illinois 435
11. Indiana 435
12. Kentucky 436
13. Louisiana 436
14. Massachusetts 437
15. Michigan 438
16. Minnesota 438
17. Missouri 439
18. Nevada 440
19. New York 441
20. North Carolina 441
21. Oklahoma 442
22. Pennsylvania 443
23. Rhode Island 445
24. Tennessee 445
25. Texas 446
26. West Virginia 447
27. Wisconsin 447
V. CONCLUSION 448
737 F.Supp.2d 388

I. INTRODUCTION

On December 2, 2009, plaintiffs IBEW—NECA Local 505 Health & Welfare Plan, Sheet Metal Workers Local 441 Health & Welfare Plan, MC—UA Local 119 Health and Welfare Plan, A.F. of L.—A.G.C. Building Trades Welfare Plan, United Food and Commercial Workers Unions and Employers Midwest Health Benefits

737 F.Supp.2d 389
Fund, and Sidney Hillman Health Center of Rochester, Inc. ("the plans") filed their second amended class action complaint ("SAC") against GlaxoSmithKline PLC, et al ("GSK"). (Document # 245). These end payor plaintiffs claim GSK filed sham patent litigation against companies seeking to manufacture and market generic versions of Wellbutrin SR in order to maintain their monopoly over sales of the drug.1

Before the Court is GSK's motion to dismiss the second amended complaint, in which the end-payor plaintiffs assert antitrust, consumer protection, and unjust enrichment claims in states in which they, or the members they represent, purchased Wellbutrin SR. In Illinois Brick Co., et al. v. State of Illinois, et al., 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), the Supreme Court faced the question whether indirect purchasers can sue for overcharges resulting from Sherman Act violations by asserting that those overcharges were passed on through the chain of distribution of a product. It ruled in the negative, finding that its decision in Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968), prohibiting antitrust plaintiffs from asserting a pass-on defense in actions brought by direct purchasers applied as well to the offensive use of a pass-on theory. See id. at 735-739, 97 S.Ct. 2061. It reasoned that "permitting the use of pass-on theories ... would essentially transform treble-damages actions into massive efforts to apportion the recovery among all potential plaintiffs that could have absorbed part of the overcharge from direct purchasers to middlemen to ultimate consumers." Id. at 737, 97 S.Ct. 2061. However, when later faced with the question whether "[the rule articulated in Illinois Brick ] limiting recoveries under the Sherman Act also prevents indirect purchasers from recovering damages flowing from violations of state law, despite express state statutory provisions giving such purchasers a damages cause of action," the Court found that it did not. California v. ARC America Corp., 490 U.S. 93, 100, 109 S.Ct. 1661, 1665, 104 L.Ed.2d 86 (1989). It reasoned that the decision in Illinois Brick to protect antitrust defendants from multiple liability was not an express federal policy but rather, was an interpretation of section 4 of the Clayton Act. Id. at 105, 109 S.Ct. 1661 ("When viewed properly, Illinois Brick was a decision construing the federal antitrust laws, not a decision defining the interrelationship between the federal and state antitrust laws.").

The indirect purchasers in this case are therefore barred from asserting federal antitrust claims and assert only statutory state law antitrust and consumer protection and state common law unjust enrichment claims.

II. STANDARD OF REVIEW

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure examines the legal sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The factual allegations must be sufficient to make the claim for relief more than just speculative. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In determining whether to grant a motion to dismiss, a federal court must construe the complaint liberally, accept all factual allegations in

737 F.Supp.2d 390
the complaint as true, and draw all plausible inferences in favor of the plaintiff. Id.; see also D.P. Enters. v. Bucks Cnty. Cmty. Coll., 725 F.2d 943, 944 (3d Cir.1984).

It remains true that the Federal Rules of Civil Procedure do not require a plaintiff to plead in detail all of the facts upon which he bases his claim. Rather, the Rules require "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In recent rulings, however, the Supreme Court has rejected language in Conley stating that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Twombly, 550 U.S. at 561, 127 S.Ct. 1955. Rather, a "complaint must allege facts suggestive of [the proscribed] conduct," Twombly, 550 U.S. at 564, 127 S.Ct. 1955, and it must contain enough factual matters to suggest the required elements of the claim or to "raise a reasonable expectation that discovery will reveal evidence of" those elements. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir.2008) (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955).

In assessing the merits of a motion to dismiss, courts must be careful to recognize that, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 1950 (emphasis added). In recognition of these principles, courts must first identify those allegations in a complaint that are mere conclusions and are therefore not entitled to the assumption of truth, and next, consider whether the complaint's factual allegations, which are entitled to a presumption of truth, plausibly suggest an entitlement to relief. Iqbal, 129 S.Ct. at 1950 (emphasis added).

III. PRELIMINARY CHOICE OF LAW QUESTION

Before reaching the substance of plaintiffs' state law claims, I will address GSK's argument that I should apply the law of the plaintiffs' home states, and not the laws of the states in which they purchased Wellbutrin SR, in resolving this motion. When I granted in part and denied in part GSK's motion for judgment on the pleadings, I ruled, in conformity with decisions of Judges McLaughlin and Brody 2, that the plans may assert causes of action in states where their members purchased Wellbutrin SR. I granted the end-payor plaintiffs leave to amend their complaint to assert causes of action in those states where their members purchased Wellbutrin SR. It is into these states that the plans sent their members reimbursements for the drug.

GSK now argues that plaintiffs' claims should be governed by the laws of their

737 F.Supp.2d 391
home states—the states where they are located.3 It argues that, in deciding...

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