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In re Androgel Antitrust Litigation

United States District Court, N.D. Georgia, Atlanta Division

July 16, 2018

UNIMED PHARMACEUTICALS INC., et al., Defendants. ROCHESTER DRUG CO-OPERATIVE INC., on behalf of itself and all others similarly situated, Plaintiff, LOUISIANA WHOLESALE DRUG CO. INC. on behalf of itself and all others similarly situated, Plaintiff,
UNIMED PHARMACEUTICALS INC., et al., Defendants. MEIJER INC., et al., Plaintiffs,
UNIMED PHARMACEUTICALS INC., et al., Defendants. MDL No. 2084



         This is an antitrust action brought by the Federal Trade Commission and private antitrust actions transferred to this Court by the Judicial Panel on Multidistrict Litigation. The private actions are before the Court on the Direct Purchaser Class Plaintiffs'[1] Motion to Certify Class [MDL Doc. 1652]. For the following reasons, the Direct Purchasers' Motion to Certify Class is DENIED.

         I. Background

         Given that the facts of this case have been extensively described in the Court's other opinions, most recently regarding the parties' motions for summary judgment, [2] a brief summary of only those facts that are relevant is sufficient here. The Defendant Solvay is the distributor of brand-name AndroGel, a testosterone replacement drug. Solvay previously settled patent litigation with the Defendants Actavis and Par/Paddock. As part of those settlements, the Private Plaintiffs and the FTC allege that Solvay agreed to pay Actavis and Par/Paddock substantial amounts of money in exchange for Actavis and Par/Paddock agreeing to drop their challenges to Solvay's AndroGel patent and delay entry of their generic versions of AndroGel until 2015. The Plaintiffs argue that these settlements violated the antitrust laws. The Direct Purchaser Class Plaintiffs, in particular, are drug wholesalers (or assignees) who claim that they paid substantially more money for brand and generic AndroGel due to the Defendants' coordinated delay of generic versions of AndroGel. They now seek to certify and represent a class of other similarly situated purchasers.

         II. Class Certification Standard

         To maintain a case as a class action, the party seeking class certification must satisfy each of the prerequisites of Rule 23(a) and at least one of the provisions of Rule 23(b).[3] Rule 23(a) sets forth the four prerequisites to maintain any claim as a class action:

One or more members of a class may sue or be sued as representative parties on behalf of all members only if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.[4]

         These prerequisites are commonly referred to as: (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation.[5] Failure to establish any one of the four factors precludes certification. In addition, under Rule 23(b), the individual plaintiffs must show that: (1) prosecuting separate actions by or against individual members of the class would create a risk of prejudice to the party opposing the class or to those members of the class not parties to the subject litigation; (2) the party opposing the class has refused to act on grounds that apply generally to the class, necessitating final injunctive or declaratory relief; or (3) questions of law or fact common to the members of the class predominate over any questions affecting only individual members and that a class action is superior to other available methods for fair and efficient adjudication of the controversy.[6] The party seeking class certification bears the burden of proving that these requirements are satisfied.[7]

         The decision to grant or deny class certification lies within the sound discretion of the district court.[8] When considering the propriety of class certification, the court should not conduct a detailed evaluation of the merits of the suit.[9] Nevertheless, the court must perform a “rigorous analysis” of the particular facts and arguments asserted in support of class certification.[10]Frequently, that “rigorous analysis” will entail some overlap with the merits of the plaintiff's underlying claim.[11]

         III. Discussion

         The first prong of Rule 23(a) requires Courts to find that the proposed class is “so numerous that joinder of all members is impracticable.”[12] “[W]hile there is no fixed numerosity rule, generally less than twenty-one is inadequate, more than forty adequate, with numbers between varying according to other factors.”[13] These other factors include the “ease of identifying its numbers and determining their addresses, facility of making service on them if joined and their geographic dispersion.”[14] The Plaintiffs have proposed a class of thirty-three members, although the Defendants argue that the proposed class should be less than twenty-one members.[15] As discussed below, the Plaintiffs have failed to show that joinder would be impracticable even with their larger proposed class, a conclusion that would only be strengthened were the class trimmed down any less. Therefore, the Court need not determine the appropriate size of the class.

         The Plaintiffs' proposed class of thirty-three members places it squarely in the middle of the Eleventh Circuit's gray area. Whether joinder would be impracticable in this case therefore depends on the other factors outlined in Kilgo.[16] Here, the first two factors - ease of identification and feasibility of service - weigh against certification. The Plaintiffs already know each and every one of the potential plaintiffs.[17] They are all domestic companies whose addresses are fixed and known.[18] Serving them with papers would be straightforward.

         The only factor potentially weighing in favor of certification is the geographic dispersion of the class. These companies are widely distributed across the United States, from San Francisco to Burlington, Vermont.[19]However, unlike the typical class action, in which there are a number of individual plaintiffs with relatively small claims, the Plaintiffs' proposed class consists of very large, sophisticated companies with very large claims. The vast majority of the proposed class members seem to have revenue of at least tens of millions of dollars per year, including at least ten members that have revenue in the billions.[20] Further, two-thirds of the class has alleged treble damages of over $1 million, and only six proposed members of the class have alleged treble damages of less than $100, 000.[21] In addition, most of these companies have also litigated similar actions before.[22] This means that even though these proposed plaintiffs are widely distributed, they also have the means and the motivation to join this action if they so choose, unlike the typical class plaintiffs described above.

         The Plaintiffs counter that some of the proposed Plaintiffs have relatively small claims, and that litigating these claims individually would cost substantially more than any potential damages they would receive if they won. They also argue that the class members with these smaller claims would likely be too worried over their relationships with suppliers to pursue their claims outside of a class action. These arguments do not alter the fundamental result.[23]

         First, although the Plaintiffs assert that many of their proposed class members would have negative claims, they fail to provide any evidence to support that assertion. The Plaintiffs argue that “antitrust litigation is expensive, often requiring millions of dollars in costs, ” and they point to the costs of retaining experts in this case, which have now exceeded $4.6 million.[24]They then include the following table to suggest that if a class member's claim is below $1 million or $4.6 million, their claim is therefore negative[25]:

If damages are found to be . . .

. . . then this is the number of Class members having:

a claim size below

a trebled claim size below

$1 million

$4.6 million $1 million $4.6 million


26 (79%)

30 (91%) 20 (61%) 28 (85%)


15 (45%)

22 (67%) 12 (36%) 16 (48%)

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