State v. Teva Pharm. Indus., Ltd.

• Decision Date: 08 February 2018
• Docket Number: 2017 CA 0448
• Parties: STATE of Louisiana, BY AND THROUGH its Attorney General James D. CALDWELL v. TEVA PHARMACEUTICALS INDUSTRIES, LTD., Teva Pharmaceuticals USA, Inc., Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc., Ranbaxy Laboratories, Ltd., Ranbaxy Pharmaceuticals, Inc., Cephalon, Inc.
• Court: Court of Appeal of Louisiana — District of US

242 So.3d 597

STATE of Louisiana, BY AND THROUGH its Attorney General James D. CALDWELL

v.TEVA PHARMACEUTICALS INDUSTRIES, LTD., Teva Pharmaceuticals USA, Inc., Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc., Ranbaxy Laboratories, Ltd., Ranbaxy Pharmaceuticals, Inc., Cephalon, Inc.

2017 CA 0448

Court of Appeal of Louisiana, First Circuit.

Judgment Rendered: FEBRUARY 08, 2018

Jeff Landry, Attorney General, Keetsie T. Gunnels, Nicholas J. Diez, Stacie Deblieux, Assistant Attorneys General, Baton Rouge, Louisiana, John Alden Meade, Adam G. Young, New Orleans, Louisiana, Attorneys for Plaintiff/Appellant, State of Louisiana

T. MacDougall Womack, Lauren Rivera, Baton Rouge, Louisiana, Jay P. Lefkowitz, Devora W. Allon, Elliot Harvey Schatmeier, New York, New York, Attorneys for Defendant/Appellee, Teva Pharmaceuticals USA, Inc.

Glen R. Petersen, Baton Rouge, Louisiana, J. Douglas Baldridge, Danielle R. Foley, Vincent Verrocchio, Washington, D.C., Attorneys for Defendants/Appellees, Ranbaxy Laboratories, Ltd. and Ranbaxy Pharmaceuticals, Inc.

James R. Swanson, Alysson L. Mills, New Orleans, Louisiana, Dane S. Ciolino, Metairie, Louisiana, Evan R. Chesler, David Marriott, New York, New York, Attorneys for Defendants/Appellees, Mylan Pharmaceuticals, Inc. and Mylan Laboratories, Inc. (now known as Mylan, Inc.)

BEFORE: HIGGINBOTHAM, HOLDRIDGE, AND PENZATO, JJ.

PENZATO, J.

Appellant, State of Louisiana, by and through its Attorney General Jeff Landry (State),¹ appeals two judgments of the trial court, which this court assigned two different appellate numbers, sustaining the defendants' exceptions of no right of action and no cause of action and granting a motion to strike. In this matter, and in the companion case to this appeal, State of Louisiana, by and through its Attorney General James D. "Buddy" Caldwell v. Teva Pharmaceuticals Industries, Ltd., et al, 2017–0449 (La. App. 1 Cir. 2/8/18), 242 So.3d 595, also handed down this date, defendants filed a motion for partial dismissal with this court. For the reasons that follow, we dismiss the appeal and deny the motion for partial dismissal as moot.

FACTS AND PROCEDURAL HISTORY

This matter arises out of a petition filed by the State on July 10, 2015, against numerous defendants, Teva Pharmaceutical Industries, Ltd., Teva Pharmaceuticals, USA Inc. (Teva), Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc. (collectively Mylan), Ranbaxy Laboratories, Ltd., Ranbaxy Pharmaceuticals, Inc. (Ranbaxy), and Cephalon, Inc., who was subsequently purchased by Teva in 2011 (collectively all referred to as defendants).² The State claims that the defendants intentionally delayed entry of a generic equivalent to the brand-name drug Provigil into the Louisiana market, in violation of state antitrust and consumer protection laws. The petition alleges that defendants maintained monopoly power in the market for Provigil for six years. Further, the petition alleges that the defendants sold more than $4 billion of Provigil during that period of time, while maintaining the price of the drug at supra-competitive levels, causing the State to overpay millions of dollars by depriving it of the benefits of unrestricted competition and access to less expensive generic versions.

The petition further maintains that after the Federal Drug Administration (FDA) approved the New Drug Application for Provigil, defendants filed a patent infringement suit against other companies that manufacture the generic drugs in New Jersey federal court, despite knowledge that the suit was frivolous as a result of intentional concealment of material facts to the U.S. Patent and Trademark Office during the application process. Later, when facing the imminent loss of exclusivity granted by the FDA, the defendants settled with each of the generic manufacturers in the New Jersey federal court case in return for agreements to delay marketing the generic drug until 2011 or 2012. The State claims that the profit from the defendants' monopoly and deceptive practice came at a cost of millions of dollars to the State, which was forced to purchase a brand name drug instead of a less expensive generic drug, but for the defendants' wrongful conduct.

The State sought damages and injunctive relief for injuries allegedly sustained by the Louisiana Medicaid Program as a result of an alleged unlawful conspiracy to prevent or delay the generic, less expensive drug from entering the Louisiana market for a six-year period. The State alleged that the conspiracy violated the Louisiana Monopolies Act (LMA), La. R.S. 51:121, et seq. (Count I), the Louisiana Unfair Trade Practices Act (LUTPA), La. R.S. 51:1401, et seq. (Count II), and alternatively, violated the law of unjust enrichment (Count III). LMA prohibits parties from monopolizing, or attempting to monopolize, or combine, or conspire with any other party to monopolize any part of the trade or commerce within Louisiana. La. R.S. 51:123. LUTPA outlaws unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. La. R.S. 51:1405. Louisiana Revised Statute 51:1407(A) provides that whenever the attorney general has reason to believe that any person is using, has used, or is about to use any method, act, or practice declared to be unlawful under La. R.S. 51:1405, he may bring any action for injunctive relief in the name of the state against such person to restrain and enjoin the use of such method, act, or practice. Louisiana Revised Statute 51:1407(B) provides that the attorney general may also request, and the trial court may impose, a civil penalty against any person found by the trial court to have engaged in any method, act, or practice declared to be unlawful under La. R.S. 51:1405. Louisiana Revised Statute 51:1409 provides that any person who suffers any ascertainable loss of money or movable property, corporeal or incorporeal, as a result of the use or employment by another person of an unfair or deceptive method, act, or practice declared unlawful by La. R.S. 51:1405 may bring an action individually, but not in a representative capacity, to recover actual damages.

On September 14, 2015, Ranbaxy filed declinatory exceptions of insufficient service of process and lack of personal jurisdiction. Teva and Ranbaxy filed joint peremptory exceptions of no right of action and no cause of action on the same date. On September 16, 2015, Mylan filed peremptory exceptions of no cause of action, no right of action, and prescription, as well as a declinatory exception of no personal jurisdiction.

All the exceptions were tried by the trial court on May 16, 2016. On June 1, 2016, the trial court signed a judgment granting in part in favor of the defendants the exception of no right of action with respect to the LUTPA claims brought pursuant to La. R.S. 51:1409, a private right of action, and denying in part defendants' exceptions with respect to the LUTPA claims brought pursuant to La. R.S. 51:1407, for injunctive relief. The trial court granted the defendants' exceptions of no cause of action with respect to the LUTPA claims, "with the exception of any claim for injunctive relief under [La. R.S. 51:] 1407." The trial court granted the defendants' exceptions of no cause of action with respect to the LMA, "subject to the State being given thirty (30) days ... to amend its Petition to state a cause of action under the [LMA]." The exception of prescription was deferred pending the State's thirty days to replead. Mylan's exception of lack of personal jurisdiction was also deferred. The trial court granted the Defendants' exception of no cause of action with respect to the unjust enrichment claims. The only claims dismissed by the June 1, 2016 judgment were the claims for unjust enrichment.

After the trial court denied the State's motion for new trial, on June 30, 2016, the State filed a first supplemental and amending petition (amended petition), reasserting all of its claims, including additional factual allegations and expressly retaining the prayer in the original petition. In response to the amended petition, the defendants filed joint peremptory exceptions of no right of action, prescription, no cause of action, and lack of subject matter jurisdiction. On the same date, the defendants filed a joint motion to strike the State's amended petition. In the motion to strike, the defendants claimed that all of the State's claims were dismissed by the June 1, 2016 judgment and the State was only permitted to amend the LMA claims within the thirty (30) days permitted by the trial court.

The trial court held a hearing on the exceptions and motion to strike on November 14, 2016. On December 8, 2016, the trial court issued a judgment granting the motion to strike "with respect to all paragraphs in the [amended petition] except paragraphs 143(A), 153(A), and 166(A)." The trial court granted the defendants' exception of no cause of action with regard to the State's LUPTA claim for injunctive relief pursuant to La. R.S. 51:1407. The trial court granted the defendants' exception of no cause of action with respect to the State's LMA and unjust enrichment claims. The trial court further dismissed the State's amended petition in its entirety with prejudice. The defendants appealed both the June 1, 2016 judgment and the December 8, 2016 judgment on the same date.

FINALITY OF JUDGMENTS

On April 5, 2017 this court's Clerk issued separate show cause orders addressing apparent deficiencies in both judgments. As to the June 1, 2016 judgment, the Clerk observed that the appeal taken February 17, 2017, appeared to be untimely pursuant to La. C.C.P. art. 2087(A)(2). Furthermore, that judgment appeared to be a partial judgment that had not been certified under La. C.C.P. art. 1915(B). As to the December 8, 2016 judgment, the Clerk observed that the judgment appeared to be a partial judgment that had not been certified under La. C.C.P. art. 1915(B).

The State and the defendants...