Law360, New York (October 24, 2013, 6:34 PM ET), by Melissa Lipman — A Georgia federal judge said Wednesday that he would overturn his dismissal of so-called pay-for-delay claims against Actavis Inc. and others in a putative class action over AndroGel in light of a recent U.S. Supreme Court ruling — if the Eleventh Circuit agrees to remand the case. U.S. District Judge Thomas W. Thrash Jr. said that the justices’ ruling in the Federal Trade Commission’s related case over the testosterone replacement gel — which overturned his decision and held that Hatch-Waxman Act patent settlements could be challenged under federal antitrust law — was a big enough development to merit granting the plaintiffs’ request for relief from judgment in the case.
The suit is similar to the FTC’s claim that Solvay Pharmaceuticals Inc. paid several generics makers to delay the market entry of cheaper generic versions of AndroGel. Like the FTC’s claims, the private plaintiffs’ claims were eventually dismissed but the private suit is still pending appeal to the Eleventh Circuit.
The plaintiffs want the judgment vacated and the entire matter sent back to the district court for further proceedings in light of the Supreme Court’s ruling, but the defendants have argued that the Eleventh Circuit should first consider a separate issue not involved in the FTC case on appeal.
But Judge Thrash ruled Wednesday that denying the plaintiffs’ request would only delay the inevitable district court review of the case, saying that “everyone knows who profits from that.”
“The defendants say that a post-judgment change in the law is not sufficiently extraordinary to justify Rule 60(b) relief,” Judge Thrash wrote. “Well, it seems pretty extraordinary to me because the change in the law resulted from reversal of a judgment I entered in this case. That does not happen every day.”
Both the claims brought by the FTC and those brought by direct purchasers such as the Louisiana Wholesale Drug Co. Inc., Walgreen Co. and others claim that Solvay — now known as AbbVie Products LLC — anti-competitively paid off Actavis, Paddock Laboratories Inc. and Par Pharmaceutical Cos. to drop their challenges to the AndroGel patents and delay the market entry of their generic versions of the drug.
The FTC’s case argued simply that the settlements should be presumed anti-competitive and worked its way up to the Eleventh Circuit and eventually the Supreme Court. The private case, however, also claimed that settlements stemmed from sham litigation, which was one of the exceptions to the scope of the patent test.
That test had been endorsed by the Eleventh Circuit and several other appeals courts before the Supreme Court took up the matter, and held that Hatch-Waxman settlements were generally legal as long as they did not exceed the scope of the patent or stem from sham litigation or fraudulently obtained patents.
Because that claim was not at issue in the FTC’s case, the Eleventh Circuit has yet to address the argument. As a result, the defendants argued that the appeals court should resolve the issue before sending it back to the district court.
The drugmakers also pointed out that the Eleventh Circuit had already denied the plaintiffs’ request to vacate and remand in light of the Supreme Court decision. But the appeals court did explicitly note in its ruling that the plaintiffs were free to seek Rule 60(b) relief from the judgment from the district court.
And Judge Thrash said he would grant that relief if the appeals court remanded, pointing out that the Eleventh Circuit would inevitably have to reverse the dismissal of the plaintiffs’ pay-for-delay claims regardless of the fate of the sham litigation claims.
He also voiced skepticism that allowing the case to proceed on appeal would result in further guidance from the Eleventh Circuit about how the Supreme Court’s decision should be applied to the private plaintiffs claims.
“As much as I would love some guidance from the Eleventh Circuit on how in the heck a trial judge (and a jury) is supposed to apply the Actavis decision to an actual case, I doubt that the Eleventh Circuit is going to jump into that briar patch until it has to,” the judge wrote. “The Court of Appeals has the luxury of saying to me ‘You do it.’”
Moreover, Judge Thrash pointed out that if the Eleventh Circuit “really wants to jump in the briar patch, [it] can refuse to remand the case now.”
An attorney for Par and Paddock declined to comment on the matter.
Representatives for the plaintiffs and the other defendants were not immediately available for comment Thursday.
The plaintiffs are represented by Doffermyre Shields Canfield & Knowles LLC, Berger & Montague PC and Garwin Gerstein & Fisher LLP, among others. Actavis is represented by Skadden Arps Slate Meagher & Flom LLP and Morris Manning & Martin LLP. Solvay is represented by Munger Tolles & Olson LLP and Alston & Bird LLP.Par and Paddock are represented by White & Case LLP and Greenberg Traurig LLP.
To read more about the case and Wexler Wallace’s representation, please click here.