Delcor Asset Corporation et al v. Glenmark Pharmaceuticals Limited et al

Filing 90

MEMORANDUM ORDER: The Partial Motion to Dismiss Glenmark's Third Counterclaim (D.I. 28 ) is GRANTED. Signed by Judge Richard G. Andrews on 9/21/2018. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

DELCOR ASSET CORPORATION and
MYLAN PHARMACEUTICALS INC.,
Plaintiffs,
V.

Civil Action No. 1:17-cv-01653-RGA

GLENMARK PHARMACEUTICALS
LIMITED, GLENMARK
PHARMACEUTICALS INC. , USA and
STIFEL WEST COAST, LLC,
Defendants.

MEMORANDUM ORDER

Presently before me is Plaintiffs' Partial Motion to Dismiss Glenmark's Third
Counterclaim pursuant to Federal Rule of Civil Procedure 12(b)(6). (D.I. 28). The parties have
briefed the issues. (D.I. 29, 42, 44). Defendants' Third Counterclaim alleges Monopolization
and Attempted Monopolization by Plaintiffs in the "market for treatment with topical
clindamycin foam" under Section 2 of the Sherman Antitrust Act, 15 U.S .C. § 2. (D.I. 12,
Counterclaim at ,r,r 51-64). For the reasons set forth below, Plaintiffs' Motion is GRANTED.
I.

LEGAL STANDARD

When reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the
complaint's factual allegations as true. See Bell At!. Corp. v. Twombly, 550 U.S. 544, 555-56
(2007). Rule 8(a) requires "a short and plain statement of the claim showing that the pleader is
entitled to relief." Id. at 555. The factual allegations do not have to be detailed, but they must
provide more than labels, conclusions, or a "formulaic recitation" of the claim elements. Id.

("Factual allegations must be enough to raise a right to relief above the speculative level ... on
the assumption that all the allegations in the complaint are true (even if doubtful in fact) .").
Moreover, there must be sufficient factual matter to state a facially plausible claim to relief.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The facial plausibility standard is satisfied when the
complaint' s factual content "allows the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged." Id. ("Where a complaint pleads facts that are merely
consistent with a defendant' s liability, it stops short of the line between possibility and
plausibility of entitlement to relief." (internal quotation marks omitted)).

II.

DISCUSSION
To state an antitrust monopolization claim, a claimant must plead "(1) the [accused' s]

possession of monopoly power in the relevant market and (2) the [accused' s] willful acquisition
or maintenance of that power" through exclusionary conduct. Broadcom Corp. v. Qualcomm

Inc., 501 F.3d 297, 306-07 (3d Cir. 2007) (quoting United States v. Grinnell Corp., 384 U.S .
563 , 570-71 (1966)). To state a claim for attempted monopolization, a claimant must plead that
the accused " (1) had the specific intent to monopolize the relevant market, (2) engaged in
anticompetitive or exclusionary conduct, and (3) possessed sufficient market power to come
dangerously close to success." BarrLabs., Inc. v. Abbott Labs., 978 F.2d 98, 112 (3d Cir. 1992).
"Monopoly power is the ability to control prices and exclude competition in a given market."

Broadcom, 501 F.3d 307. However, monopoly power can only be assessed after the claimant
has defined the "relevant market." See Queen City Pizza, Inc. v. Domino's Pizza, Inc. , 124 F .3d
430, 436 (3d Cir. 1997); Tunis Bros. Co. v. Ford Motor Co. , 952 F.2d 715, 722 (3d Cir. 1991)
("The relevant product market is defined as those ' commodities reasonably interchangeable by

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consumers for the same purposes."' (quoting United States v. E.l Du Pont de Nemours & Co.,
351 U.S. 377,395 (1956))).
Although the ultimate determination of the relevant market is factual, at the pleading
stage it is incumbent upon the claimant to "define its proposed relevant market with reference to
the rule of reasonable interchangeability and cross-elasticity of demand." Queen City Pizza, 124
F.3d at 436. Products are reasonably interchangeable if "one product is roughly equivalent to
another for the use to which it is put." Id. at 437. "[C]ross-elasticity of demand [means] the rise
in the price of a good within a relevant product market ... tend[ s] to create a greater demand for
other like goods in that market." Tunis Bros. , 952 F.2d at 722. Absent a market definition that
accounts for interchangeability and cross-elasticity of demand, "the [alleged] relevant market is
legally insufficient and a motion to dismiss may be granted." Queen City Pizza, 124 F.3d at 436.
Defendants have not met their burden of pleading a relevant market under Section 2 of
the Sherman Antitrust Act. Defendants' Counterclaim states, "the relevant product market is the
market for treatment with topical clindamycin foam. " (D.I. 12, Counterclaim at ,r 53).
Defendants do not go on to address reasonable interchangeability by, for example, articulating
why the relevant market covers clindamycin foam, but excludes roughly similar products such as
clindamycin creams. They do not allege that there is no cross-elasticity of demand by, for
example, claiming that an increase in the price of Plaintiffs' product would not drive consumers
to purchase alternative acne medications. In fact, Defendants do not make any allegations at all
in support of their claimed relevant market. Thus, Defendants' "relevant market" is a factually
unsupported conclusion which falls short of the pleading requirements of Rule 8(a). I will grant
Plaintiffs' Partial Motion to Dismiss Glenmark's Third Counterclaim.

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III.

CONCLUSION
Plaintiffs' Partial Motion to Dismiss Glenmark' s Third Counterclaim (D.I. 28) is

GRANTED .

IT IS SO ORDERED this

11

day of September 2018.

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