The opinion of the court was delivered by: Anita B. Brody, J.
THIS DOCUMENT RELATES TO: Indirect Purchaser Actions
On May 21, 2009, Plaintiffs A.F. of L.- A.G.C. Building Trades Welfare Plan ("AFL"), International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers Local No. 79 Health Fund ("IABORI"), IBEW-NECA Local 505 Health and Welfare Plan ("IBEW"), Painters District Council No. 30 Health & Welfare Fund ("Painters"), Sheet Metal Workers Local 441 Health and Welfare Plan ("Sheet Metal"), and Andrea Kehoe ("Kehoe"), collectively "Plaintiffs," filed a corrected second amended class action complaint ("SAC") against Defendant SmithKline Beecham Corporation, doing business as GlaxoSmithKline, Inc. ("GSK").
Plaintiffs are indirect purchasers of the prescription drug Flonase. They allege that GSK filed sham citizen petitions with the Food and Drug Administration ("FDA") to delay the entry of a generic version of Flonase (fluticasone propionate)*fn1 into the market. Plaintiffs bring claims against GSK under several states' laws: (1) Monopolization under the law of Arizona, Iowa, North Carolina, and Wisconsin; (2) Unfair and Deceptive Trade Practices under the law of Arizona, Florida, Illinois, Iowa, Massachusetts and North Carolina; and (3) Unjust Enrichment under the law of Arizona, Florida, Illinois, Iowa, Massachusetts, North Carolina, and Wisconsin. Plaintiffs maintain that they sustained injury when they "purchased and/or provided reimbursement for Flonase purchases" in the respective states. (Compl. ¶¶ 5-9.) On June 19, 2009, GSK filed a Motion to Dismiss the second amended complaint.
Under the Federal Food, Drug and Cosmetic Act ("FDCA"), drug manufacturers must receive FDA approval before selling a new drug. The manufacturer of a new drug who obtains FDA approval enjoys a period of market exclusivity during which their patent is protected. Once this period expires, other ("generic") manufacturers may market and sell the drug. Before the generic version is approved for sale, a prospective manufacturer of a generic drug must file an Abbreviated New Drug Application ("ANDA") with the FDA. The manufacturer must demonstrate to the FDA that the generic version is the "bioequivalent" of the brand name drug; in other words, the generic version must contain the same active ingredient(s), dosage form, route of administration, and strength. Once a generic drug enters the market, the price and sales volume of the name-brand drug typically drop. While the approval of a generic version is pending, "citizen petitions" may be filed with the FDA to express legitimate concerns regarding a product and to request that the FDA take, or refrain from taking, administrative action. Because citizen petitions can delay a generic drug's approval, they are open to abuse by pharmaceutical companies attempting to prolong their monopoly in the market.*fn3
Plaintiffs contend that in 2004, as the end of GSK's exclusivity period for Flonase approached, GSK filed four successive sham citizen petitions solely to delay the FDA's approval of generic versions of the drug, and with no reasonable basis for objecting to the approval. Plaintiffs allege that because of this unlawful behavior, their ability to purchase lower-priced generic versions of Flonase was delayed and they were denied the benefits of unrestrained competition.
Jurisdiction over this action is proper under the Class Action Fairness Act of 2005, which grants district courts original jurisdiction over "any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interests and costs, and is a class action in which . . . any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C. § 1332(d)(2); See Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144, 148 (3d Cir. 2009).
Under Federal Rule of Civil Procedure 12(b)(1), a court must grant a motion to dismiss if it lacks subject matter jurisdiction to hear a claim. "A motion to dismiss for want of standing is also properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter."
Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007). Pursuant to Rule 12(b)(1), "the Court must accept as true all material allegations set forth in the complaint, and must construe those facts in favor of the nonmoving party." Id. On a motion to dismiss for lack of standing, "the plaintiff bears the burden of establishing the elements of standing, and each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation." Id. (internal quotations omitted). However, "general factual allegations of injury resulting from the defendant's conduct may suffice." Id. (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).
Under Federal Rule of Civil Procedure 12(b)(1), a court must grant a motion to dismiss if it lacks subject matter jurisdiction to hear a claim. "A motion to dismiss for want of standing is also properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter." Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007). Pursuant to Rule 12(b)(1), "the Court must accept as true all material allegations set forth in the complaint, and must construe those facts in favor of the nonmoving party." Id. On a motion to dismiss for lack of standing, "the plaintiff bears the burden of establishing the elements of standing, and each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation." Id. (internal quotations omitted). However, "general factual allegations of injury resulting from the defendant's conduct may suffice." Id. (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).
Under Federal Rule of Civil Procedure 12(b)(6), a court must grant a motion to dismiss if the plaintiff fails "to state a claim upon which relief can be granted." In deciding a motion to dismiss pursuant to Rule 12(b)(6), the court must accept as true the well-pleaded allegations of the complaint and draw all reasonable inferences in the plaintiff's favor. Brown v. Card Serv. Ctr., 464 F.3d 450, 452 (3d Cir. 2006). While a complaint "does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). To survive a motion to dismiss, a complaint must contain "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (internal quotations omitted).
A. Standing Under 12(b)(1): The Named Plaintiffs have Standing in States Where They are Located or Where They Purchased Flonase or Reimbursed for Purchases of Flonase
Article III of the Constitution requires that a plaintiff has standing to assert his or her claims. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). In a class action, "[t]he initial inquiry . . . is whether the lead plaintiff individually has standing." Winer Family Trust v. Queen, 503 F.3d 319, 326 (3d Cir. 2007). See also O'Shea v. Littleton, 414 U.S. 488, 494 (1974). The issue before me is whether the named plaintiffs in the present action have standing in the states where they make their claims. I find that they do.*fn4
At a minimum, constitutional standing requires three elements: (1) injuryin-fact, which is an invasion of a legally protected interest that is concrete and particularized, and actual or imminent; (2) causation; and (3) likelihood that the injury will be redressed by a favorable decision. Winer, 503 F.3d at 325; Lujan, 504 U.S. at 560-61.
Plaintiffs' allegations meet the requirements of constitutional standing. They have experienced an injury-paying too much for Flonase-in states where they are located, in states where they purchased Flonase and in states where they reimbursed members for purchases of Flonase. Defendant allegedly caused this injury by wrongfully filing citizen petitions, and thereby unfairly extending its monopoly on the market by preventing the entry of generic versions of Flonase. The injury is likely to be redressed by a favorable court decision. Therefore, each named plaintiff has standing to bring a claim under the laws of the states where they are located, and where they purchased Flonase or reimbursed their members for Flonase purchases.
Case law supports the position that Plaintiffs suffered injury and have standing in states where they purchased a drug or reimbursed their members for purchases of a drug. See In re Wellbutrin XL Antitrust Litig., 260 F.R.D. 143, 156-57 (E.D. Pa. 2009) (McLaughlin, J) (holding that indirect purchaser plaintiffs had standing to bring claims under the laws of states where their members resided, and stating that "[r]eimbursement for the purchase of drugs . . . constitutes a monetary injury to the plaintiffs" and "the plaintiffs' claims have clear connection to the states where the plaintiffs themselves are located and the states where their members made purchases."); Ferrell v. Wyeth-Ayerst Labs, Inc., No. C-1-01-447, 2004 U.S. Dist. LEXIS 15127, at *13 (S.D. Ohio, June 30, 2004) (holding that indirect purchaser funds had standing in states where the funds paid or co-paid for [i.e. where their members purchased] the drug Premarin); In re Terazosin Hydrochloride Antitrust Litig., 160 F. Supp. 2d 1365, 1370-71 (S.D. Fla. 2001) (dismissing the plaintiffs' claims based on standing only in states where the plaintiffs neither resided nor purchased the drug terazosin).
In other cases, the judges-and the defendants-have simply assumed that plaintiffs possessed standing where they made purchases. E.g., In re Relafen Antitrust Litig., 221 F.R.D. 260, 267-69 (D. Mass. 2004) ("Smithkline did not challenge the representatives' standing to assert personal claims under the laws of states in which they resided or purchased medication"); In re Buspirone Antitrust Litig., 185 F. Supp. 2d 363, 377 (S.D.N.Y. 2002). In both cases, the judges refused to dismiss claims even in states where named plaintiffs neither resided nor purchased the drug. In re Relafen, 221 F.R.D. at 267-68; In re Buspirone, 185 F. Supp. 2d at 377. The courts deferred the standing decision regarding such states until the class certification stage, relying in part on the Supreme Court's decision in Ortiz v. Fireboard Corp., 527 U.S. 815(1999).
Defendant fails to cite any cases that specifically deny indirect purchaser plaintiffs standing in states where they purchased a drug. Defendant cites In re OSB Antitrust Litig., Master File No. 06-826, 2007 WL 2253425 (E.D. Pa., Aug. 3, 2007), which simply held that plaintiffs did not have standing where class representatives failed to allege any particular injury in specified states, and the states' laws required at least some part of the injury to have occurred in their state. Id. at *15-16. In contrast, here the Plaintiffs have alleged injury in each of the relevant states through purchase and/or reimbursement. See also In re Ditropan XL Antitrust Litig., 529 F. Supp. 2d 1098, 1107 (N.D. Cal. 2007) (dismissing claims in 24 states because plaintiffs bore the burden of demonstrating standing and had not done so, where plaintiffs failed to assert that they had standing in states where they did not reside and instead merely argued that the standing determination should be deferred).
Furthermore, there is no reason to defer the standing determination until after class certification. The Supreme Court, in Ortiz v. Fireboard Corp., 527 U.S. 815(1999), deferred the standing determination of the class because class certification was "logically antecedent" to the standing issues in the case. Ortiz, 527 U.S. at 830-31. The standing issues involved the class as a whole or many of the class members, rather than the named plaintiffs. The Court found that the District Court had improperly certified the class, and in holding that the class should never have been certified, the Court obviated the need to decide all of the standing issues that might have been presented if the class had been certified. The jurisdictional issues did not exist but for the class-action certification; thus certification was logically antecedent to the standing issues. See id. at 831. See also Amchem Prods. v. Windsor, 521 U.S. 591, 612 (1997).
Our case presents a different posture. Here, the Defendant attacks the standing only of the named plaintiffs. Named plaintiffs must have case or controversy standing; the potential standing problem in this case is not created by class certification. Therefore class certification is not logically antecedent to the standing problem. Unlike Ortiz, there is no reason to defer the standing determination in this case.
Named plaintiffs have standing to pursue claims in states where they reside, and where they purchased Flonase or reimbursed for purchases of Flonase. Therefore the named Plaintiffs have standing in Arizona, Florida, Illinois, Iowa, Massachusetts, North Carolina and Wisconsin.
B. The Question of Whether Plaintiffs may Represent a Nationwide Class is One to be Determined at the Class Certification Stage
Defendant argues in its Motion to Dismiss that Plaintiffs may not represent a nationwide class. This argument is premature; the question of who will comprise the proposed class (i.e. whom named plaintiffs may represent) should be determined at class certification. Further, choice-of-law issues may be determined at or after class certification. See Maywalt v. Parker & Parsley Petroleum Co., 147 F.R.D. 51, 58 (S.D.N.Y. 1993); In re Synthroid Mktg. Litig., 188 F.R.D. 295, 302 (N.D. Ill. 1999) (declining to make a choice of law determination at the class certification stage). In addition, class certification is logically antecedent to a determination of the standing of proposed class members in certain states. See Ortiz, 527 U.S. at 831. Defendant's motion is therefore denied without prejudice.
C. Plaintiffs' Claims Under 12(b)(6)
Plaintiffs allege monopolization, unfair and deceptive trade practices, and unjust enrichment under several states' laws.
At least one named plaintiff alleges monopolization under each of Arizona, Iowa, North Carolina and Wisconsin law. Defendant moves to dismiss plaintiffs' monopolization claims under North Carolina and Wisconsin law.*fn5
In their Complaint, Plaintiffs Count for monopolization refers generally to N.C. Gen. Stat. §§ 75-1, et seq. (Compl. ¶ 34). Chapter 75 is titled "Monopolies, Trusts and Consumer Protection," and has over thirty sections. Section 75-1.1 is know as the North Carolina Unfair and Deceptive Trade Practices Act ("NCUDTPA"). Section 75-2.1 is titled "Monopolizing and Attempting to Monopolize Prohibited." Plaintiffs do not specify under which provision they make their monopolization claim. Further, they have not differentiated their North Carolina monopolization claim from their North Carolina unfair and deceptive trade practices claim, which alleges violations of Section 75-1.1. Defendant's Motion to Dismiss the monopolization claim briefs only Section 75-1.1,*fn6 and Plaintiffs' response does the same. Neither party has briefed a potential claim under N.C. Gen. Stat. § 75-2.1. It is conceivable that Plaintiffs' monopolization claim under North Carolina law could come under Section 75-1.1 or 75-2.1. I do not dismiss plaintiffs' claims under N.C. Gen. Stat. § 75-1.1 (See infra Part C.2.f below), because the facts alleged by Plaintiffs may support a claim under Section 75-1.1. Defendant has apparently not moved to dismiss any claim under N.C. Gen. Stat. § 75-2.1. Thus, there is no basis for me to dismiss Plaintiffs' monopolization claim under the law of North ...