Endo Pharmaceuticals Inc. et al v. Actavis Inc., et al.

Filing 171

MEMORANDUM OPINION regarding Motions to Dismiss (D.I. 147 and D.I. 149 ). Signed by Judge Richard G. Andrews on 2/8/2017. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

ENDO PHARMACEUTICALS INC. and
MALLINCKRODT LLC,
Plaintiffs,
V.

ACTAVIS INC., ACTA VIS SOUTH
ATLANTIC LLC, ACTAVIS PHARMA,
INC., ACTAVIS ELIZABETH LLC,
ACTAVIS HOLDCO U.S., INC., and TEVA
PHARMACEUTICALS USA, INC.

Civil Action No. 14-1381-RGA

Defendants.

MEMORANDUM OPINION

Jack B. Blumenfeld, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE;
Derek J. Fahnestock, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE;
Stephen J. Kraftschik, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE;
Jonathan D. Loeb, Esq., DECHERT LLP, Mountain View, CA; Martin J. Black, Esq.,
DECHERT LLP, Philadelphia, PA; Sharon K. Gagliardi, Esq., DECHERT LLP, Philadelphia,
PA; Julie Latsko, Esq., DECHERT LLP, Philadelphia, PA; Joseph Gribbin, Esq., DECHERT
LLP, Philadelphia, PA; Robert D. Rhoad, Esq., DECHERT LLP, Princeton, NJ; Brian M.
Goldberg, Esq., DECHERT LLP, Princeton, NJ.
Attorneys for Plaintiff Endo Pharmaceuticals Inc.
Jack B. Blumenfeld, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE;
Derek J. Fahnestock, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE;
Stephen J. Kraftschik, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE;
Jeffrey J. Toney, Esq., KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, Atlanta, GA;
Rodney R. Miller, Esq., KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, Atlanta, GA;
Paul G. Williams, Esq., KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, Atlanta, GA;
Marcus A. Barber, Esq., KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, Redwood
Shores, CA.
Attorneys for Plaintiff Mallinckrodt LLC.

Adam W. Poff, Esq., YOUNG CONWAY STARGATT & TAYLOR LLP, Wilmington, DE;
Robert M. Vrana, Esq., YOUNG CONWAY STARGATT & TAYLOR LLP, Wilmington, DE;
Charles A. Weiss, Esq., HOLLAND & KNIGHT LLP, New York, NY; Howard S. Suh, Esq.,
HOLLAND & KNIGHT LLP, New York, NY; Eric H. Yecies, Esq., HOLLAND & KNIGHT
LLP, New York, NY; Nicholas P. Chiara, Esq., HOLLAND & KNIGHT LLP, New York, NY.
Attorneys for Defendants Actavis Inc., Actavis South Atlantic LLC, Actavis Pharma, Inc.,
Actavis Elizabeth LLC, and Actavis Holdco U.S., Inc.
Adam W. Poff, Esq., YOUNG CONWAY STARGATT & TAYLOR LLP, Wilmington, DE;
Robert M. Vrana, Esq., YOUNG CONWAY STARGATT & TAYLOR LLP, Wilmington, DE;
James F. Hurst, Esq., KRIKLAND & ELLIS LLP, Chicago, IL; Jeanna M. Wacker, Esq.,
KIRKLAND & ELLIS LLP, New York, NY; John C. O'Quinn, Esq., KIRKLAND & ELLIS LLP,
Washington, DC.
Attorneys for Defendant Teva Pharmaceuticals USA, Inc.
February <j'__, 2017

Presently before the Court are Defendant Actavis' Partial Motion to Dismiss Counts I,
III, IV, VI, and VII (D.I. 147) and related briefing (D.I. 148, 161, 164) and Defendant Teva's
Motion to Dismiss for Failure to State a Claim and for Lack of Subject Matter Jurisdiction (D.I.
149) and related briefing (D.I. 150, 161, 165).
As an initial matter, Plaintiffs represent that the parties have agreed to file for partial final
judgment with respect to the Counts involving the '737 patent (D.I. 161 at 11), which was
invalidated in my previous order of November 17, 2015. (D.I. 67). Therefore, Plaintiffs argue,
the motions as to Counts I, III, and IV are moot. Regardless, they need to be dismissed. I think
the effect is the same.
Defendant Teva has moved under Rule 12(b)(6) to dismiss Counts II and V for failure to
state a claim. A Rule 12(b)(6) motion may be granted only if, accepting the well-pleaded
allegations in the complaint as true and viewing them in the light most favorable to the
complainant, a court concludes that those allegations "could not raise a claim of entitlement to
relief." Bell At!. Corp. v. Twombly, 550 U.S. 544, 558 (2007).
As to Counts II and VI, Defendant Teva argues that it is not a proper defendant because
"all alleged infringing activity had ceased" prior to Teva's acquisition of Defendant Actavis.
(D.I. 150 at 16). Plaintiffs counter that as "owner and real party in interest ... it is plausible that
Teva is liable for the past infringements." (D.I. 161 at 35). While Teva may ultimately be
financially liable for the past infringements, Plaintiffs have not pled that Teva is itself an
infringer. Therefore, Defendant Teva is not a proper defendant as to counts based on acts of
infringement that occurred prior to Teva's acquisition of Actavis. Counts II and VI are
dismissed as to Defendant Teva.

As to Count V, Defendant Teva argues that it is not a proper defendant because "it did
not prepare or file this ANDA." (D.I. 150 at 14). Plaintiffs counter that Defendant "Teva is the
corporate parent of the current defendants and intends to manufacture, market, and sell the
infringing drug itself." (D.I. 161 at 16; D.I. 140 at ififl0-13). There is no explicit requirement in
§ 271(e) that a party must have prepared or filed the ANDA itself in order to be a proper
defendant. See In re Rosuvastatin Calcium Patent Litig., 703 F.3d 511, 527-28 (Fed. Cir. 2012)
(finding "inten[t] to directly benefit from the ANDA" supports liability for infringement).
Plaintiffs' allegations that Defendant Teva is the owner and real party in interest of the ANDA
and will benefit from the ANDA if it is approved are sufficient to plead a claim of infringement
under§ 271(e). Therefore, Defendant Teva's Motion to Dismiss Count Vis denied.
As to Count VI, Defendant Actavis argues that the Court does not have jurisdiction
because the filing of an ANDA does not confer declaratory judgment jurisdiction as to§ 271(a).
(D.I. 148 at 9-10). Plaintiffs counter by attempting to craft a split in district court decisions on
this issue. (D.I. 161 at 17). The cases Plaintiffs cite are distinguishable from this case, however,
and I do not believe Plaintiffs have established the requisite immediacy to warrant exercising
declaratory judgment jurisdiction. Therefore, Defendant Actavis's Motion to Dismiss Count VI
is granted.
As to Count VII, Defendant Actavis argues that Plaintiffs have failed to plead the
requisite privity and identity of cause of action. (D.I. 148 at 11 ). Defendant Teva argues that
Plaintiffs have not "invoke[d] an independent basis for seeking relief under the Act." (D.I. 150
at 21). I agree with both Defendants. Res judicata and collateral estoppel are affirmative
defenses that do not, on their own, create an actual controversy appropriate for resolution under
the Declaratory Judgment Act. Furthermore, nothing in Plaintiffs' Amended Complaint has

caused me to change my opinion as to the merits of Plaintiffs' claim and issue preclusion
theories. (D.I. 139 at 1). Defendants Actavis and Teva were, at the time the earlier case was
litigated, two separate companies, and there is no allegation that Actavis participated in or in any
way controlled the earlier lawsuit. In addition, the ANDA at issue in this case is different from
the ANDA at issue in the earlier litigation. Therefore, Defendants' Motions to Dismiss Count
VII are granted.
Finally, Defendant Actavis has moved to dismiss Plaintiffs' amendments adding Actavis
Pharma, Inc., Actavis Elizabeth LLC, and Actavis Holdco U.S., Inc. because it contends these
entities are improper parties that Plaintiffs did not seek leave to add. (D.I. 148 at 15). Plaintiffs
counter that these entities were referenced in their November 21, 2016 letter and, therefore, they
have not violated my previous Order limiting amendments to issues raised in their letter. (D.I.
161 at 36; D.I. 139 at 2). I have searched in vain for Plaintiffs' purported references to these
entities in their letter. 1 (D.I. 128). Finding none, I will grant Defendant Actavis's Motion to
Dismiss the additional Actavis entities.
For the reasons set forth herein, Defendants' Motions to Dismiss are GRANTED IN
PART and DENIED IN PART. The Motions to Dismiss Claims I, III, and IV are GRANTED

as to all Defendants. Defendant Teva' s Motion to Dismiss Claims II, VI, and VII is
GRANTED. Defendant Teva's Motion to Dismiss Claim Vis DENIED. Defendant Actavis's

Motion to Dismiss Claims VI and VII are GRANTED. Defendant Actavis's Motion to Dismiss
the Additional Actavis Entities is GRANTED.
An appropriate order will be entered.

1
Plaintiffs also cite thirty pages of exhibits at D.I. 128-1. (See D.I. 161 at 36). I would think Plaintiffs' lawyers
were sufficiently experienced to understand that a letter that does not mention adding additional Actavis defendants
is not magically converted into a request to add additional Actavis defendants simply because the existence of other
Actavis entities is mentioned in a lengthy appendix.