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Meijer, Inc. v. Ranbaxy Inc.

United States District Court, D. Massachusetts

March 28, 2017

Meijer, Inc. and Meijer Distribution, Inc. on behalf of themselves and all others similarly situated, Plaintiffs,
Ranbaxy Inc. and Sun Pharmaceutical Industries Ltd., Defendants.


          Nathaniel M. Gorton, United States District Judge

         This case involves a putative class action brought by plaintiffs Meijer, Inc. and Meijer Distribution, Inc., (jointly, “Meijer” or “plaintiffs”) against Ranbaxy, Inc. and related entities (“Ranbaxy”) and Sun Pharmaceutical Industries, Ltd. (“Sun Pharma”) (jointly, “defendants”) for antitrust and Racketeer Influenced and Corrupt Organizations Act (“RICO”) violations.

         In September, 2015, defendants filed a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), which was referred to United States Magistrate Judge M. Page Kelley for a Report and Recommendation (“R&R”). The R&R was filed with this session on June 16, 2016. It was accepted and adopted whereby defendants' motion to dismiss was denied. On October 7, 2016, defendants filed a motion requesting that this Court certify that Order for interlocutory appeal. For the following reasons, the motion will be allowed.

         I. Background

         In May, 2015, plaintiffs brought this action on behalf of themselves and as representatives of a direct purchaser class. Their complaint contains four counts against defendants: violations of the Sherman Act, 15 U.S.C. § 2, (Counts I and II) and violations of RICO, 18 U.S.C. § 1962(c) and (d) (Counts III and IV, respectively).

         In September, 2015, defendants moved to dismiss plaintiffs' allegations for failure to state a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6). They sought dismissal of plaintiffs' claims by asserting, inter alia, that the claims were precluded by the Federal Drug and Cosmetic Act (“FDCA”), 21 U.S.C. § 301 et. seq. In support of that proposition, defendants relied on the decision of the United States Supreme Court in Buckman Co. v. Plaintiff's Legal Comm., 531 U.S. 341 (2001) and 21 U.S.C. § 337(a).

         In Buckman, the plaintiffs brought state-law tort claims against a consultant for injuries caused by orthopedic bone screws, alleging that the defendant made fraudulent representations to the Food and Drug Administration (“FDA”) in the course of obtaining approval to market the screws. 531 U.S. at 343. The Supreme Court found that federal law preempted state-law tort claims for fraud on the FDA. Id. at 349.

         Here, defendants assert that Buckman should be read expansively to prohibit all claims predicated on fraud on the FDA, not just state-law claims. They note that the Supreme Court in Buckman focused on the explicit bar against private action in 21 U.S.C. § 337(a).

         Furthermore, defendants emphasize the Supreme Court's reasoning that state-law fraud-on-the-FDA claims would conflict with and burden the FDA in ways not contemplated by Congress. They contend that this rationale is applicable regardless of whether the claims are based on state or federal law. By their reading, the key distinction in Buckman is between private litigants and the federal government, not the underlying source of the claims.

         In January, 2016, this Court referred the motion to dismiss to Magistrate Judge M. Page Kelley. After hearing, she entered a R&R, recommending that the motion be allowed on all counts against Ranbaxy Laboratories Limited and Ranbaxy USA, Inc. Plaintiffs did not oppose that dismissal. Magistrate Judge Kelley also recommended that the motion to dismiss be denied as to all counts against Ranbaxy and Sun Pharma. On September 7, 2016, after considering the parties' objections, this session accepted and adopted the R&R, granting, in part, and denying, in part, defendants' motion to dismiss.

         In accepting and adopting the R&R, this Court concluded that plaintiffs' Sherman Act and RICO claims against Ranbaxy and Sun Pharma ought to proceed. Although their claims presented a matter of first impression for which Supreme Court precedent was not precisely on point, this Court found that the Sherman Act and RICO claims were not precluded by the FDCA under Buckman's preemption analysis. Instead, the Court agreed with plaintiffs and applied POM Wonderful LLC v. Coca-Cola Co., 134 S.Ct. 2228 (2014).

         In POM, the Supreme Court analyzed the overlap of the Lanham Act, 15 U.S.C. § 1125, and the FDCA as a matter of statutory interpretation not preclusion. POM Wonderful LLC, 134 S.Ct. at 2236. It noted that

when two statutes complement each other, it would show disregard for the congressional design to hold that Congress nonetheless intended one federal statute to preclude the operation of the other.

Id. Accordingly, in this case, after finding that the relevant statutes do not conflict and that plaintiff appropriately alleged violations of the Sherman Act and RICO, ...

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