Lakeland Regional Medical Center, Inc. v. Astellas US, LLC et al

Filing 150

ORDER denying 116 Motion to Certify Class. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 9/24/2012. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
LAKELAND REGIONAL MEDICAL CENTER,
INC.,
Plaintiff,
v.

Case No.

ASTELLAS US, LLC
PHARMA US, INC.,

and

8:10-cv-2008-T-33TGW

ASTELLAS

Defendants.
______________________________/
ORDER
This cause comes before the Court pursuant to Plaintiff
Lakeland Regional Medical Center’s Motion and Brief in Support
of Class Certification (Doc. # 116), which was filed on July
13, 2012. Defendants Astellas US, LLC and Astellas Pharma US,
Inc. (collectively, “Astellas”) filed a Response and Brief in
Opposition to Class Certification (Doc. # 138) on August 27,
2012, and Lakeland Regional filed a Reply Memorandum (Doc. #
144) on September 4, 2012.

For the reasons that follow, the

Court denies Class Certification in this antitrust case.
I.

Background
Lakeland Regional, a full-service hospital, is a not-for-

profit Florida corporation with its headquarters in Lakeland,
Florida. (Doc. # 11 at ¶ 7).

Astellas, incorporated in

Delaware with its headquarters in Deerfield, Illinois, is the
exclusive

licensee

of

two

relevant

patents

involving

adenosine, a naturally occurring substance found in the human
body. Id. at ¶ 8. Lakeland Regional alleges that Astellas has
engaged

in

unlawful,

anticompetitive,

monopolistic,

and

exclusionary activity with respect to adenosine in violation
of the Sherman Antitrust Act, 15 U.S.C. §§ 1 and 2, the
Clayton Antitrust Act, 15 U.S.C. § 14, Florida antitrust law,
and Florida common law.
A.

The Patents

Physicians use a test known as myocardial perfusion
imaging to diagnose a condition known as cardiac artery
disease, one of the leading causes of death in the United
States. (Doc. # 11 at ¶ 9).

Myocardial perfusion imaging is

usually done while the patient is placed under “stress” in
order to maximize the accuracy of the test. Id. at ¶ 10.
Physicians induce stress by requiring patients to exercise on
a treadmill. Id.

When patients are unable to exercise on a

treadmill, physicians create “pharmacological stress” through
the administration of adenosine. Id. Adenosine is a naturally
occurring compound that induces the dilation of blood vessels.
Id. at ¶ 12.
Even when patients are capable of exercise, physicians
often use adenosine to further stress the heart, in order to
increase the accuracy of the stress test. Id.
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Administration

of adenosine is the medically recognized standard of care when
pharmacologic

stress

is

required

to

perform

myocardial

perfusion imaging. Id.
During the time relevant to the present suit, the use of
adenosine during myocardial perfusion imaging has been covered
by two separate method of use patents: the 5,070,877 patent
and the 5,731,296 patent. (Levitt Decl. Doc. # 138-3 at ¶ 4).
The ‘877 Patent expired on May 18, 2009. (Berneman Rpt. at ¶
16).1

The ‘296 Patent will not expire until March 24, 2015.

(Levitt Decl. Doc. # 138-3 at ¶ 4).

Astellas is the exclusive

licensee of such Patents. Id. Therefore, any health care
provider

who

administers

adenosine

to

a

patient

during

myocardial perfusion imaging must have a license to do so from
Astellas. Id.
Astellas sells an adenosine drug known as Adenoscan, and
it is the only drug approved by the United States Food and
Drug

Administration

for

use

during

imaging. (Berneman Rpt. at ¶ 15).

myocardial

perfusion

Adenoscan was launched in

1995, and by 2001, it had become the most commonly used drug

1

A majority of the parties’ submissions regarding class
certification were filed under seal.
The Court has
accordingly referred to such materials by title, rather than
by a docket number.
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for inducing stress for myocardial perfusion imaging. (McQuire
Rpt. at ¶ 97).
B.

Astellas’s Communications with Lakeland Regional

Lakeland Regional does not dispute the validity of the
‘296 Patent, but, nevertheless, began using an adenosine
product other than Adenoscan during myocardial perfusion
imaging.

On July 31, 2008, Astellas transmitted a letter to

Lakeland Regional indicating that Lakeland Regional must
purchase Adenoscan for use in myocardial perfusion imaging
procedures and that use of “generic” adenosine during such
procedures would constitute infringement of the ‘296 Patent.
(Doc. # 11 at ¶ 24).

Among other things, Astellas’ letter

stated:
[S]ale of . . . an Adenoscan substitute for that
use [in myocardial perfusion imaging] is currently
protected by two independent United States patents
. . . . When Adenoscan is purchased from Astellas,
the purchaser is given permission to use the drug
as an adjunct for [myocardial perfusion imaging].
But when adenosine from an unauthorized source is
used for [myocardial perfusion imaging] . . . the
seller and the user are infringing both the ‘877
and the ‘296 patents and thus could be liable for
patent infringement . . . . [E]ven after May 18,
2009, only Astellas . . . will be legally permitted
to use adenosine as an adjunct for [myocardial
perfusion imaging].
Id. at ¶ 26.

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In a letter dated September 14, 2009, Astellas explained
to Lakeland Regional:
While there is no patent that covers the
composition, adenosine, this method of use patent
precludes the use of generic adenosine for
[myocardial perfusion imaging] as a substitute for
Adenoscan.
Astellas is the only party that can
authorize the patented use of an adenosine infusion
for [myocardial perfusion imaging] studies. Such
permission is only granted when Adenoscan is
purchased . . . from Astellas.
Id. at ¶ 28 (emphasis in original).
C.

Lakeland Regional’s Complaint

Lakeland Regional initiated this action against Astellas
on September 13, 2010, and filed an Amended Class Action
Complaint on October 19, 2010. (Doc. ## 1, 11).

Lakeland

Regional’s Amended Complaint arrays the following counts
against

Astellas:

unlawful

tying

(count

one),

exclusive

dealing (count two), attempt to monopolize (count three),
unreasonable

restraint

of

trade

(count

four),

attempted

monopolization (count five), and tortious interference with a
prospective economic advantage (count six). (Doc. # 11).
Lakeland

Regional’s

expert

explains

the

essence

Lakeland Regional’s antitrust claims:
Astellas extends its monopoly by use of a tied
sale.
A tied sale occurs when the seller of a
product or service (the tying product) over which
it has market or monopoly power requires a consumer
to also buy another product (the tied product) the
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of

seller produces. . . . In this matter, the tying
product/service is Astellas’ ‘296 method of
infusing adenosine in connection with [myocardial
perfusion imaging] testing; the tied product is
adenosine as Adenoscan. Astellas has used the ‘296
patent for the method of infusing adenosine for
[myocardial perfusion imaging] to force Class
members to purchase its adenosine (Adenoscan) at
prices much above those for other adenosine
products.
(McGuire Rpt. at ¶ 63).
Lakeland Regional seeks certification of the following
national class pursuant to Rule 23(b)(2), (3), Fed.R.Civ.P.:
All health care providers who were consumerpurchasers of Astellas’ adenosine products within
four years prior to the filing of this action, and
who would have used adenosine sold by a provider
other than defendant Astellas for myocardial
perfusion imaging (MPI) but for the defendant’s
claim that generic adenosine could not be used for
this procedure (even though it was available on the
market).
(a) Those health care providers referenced above
still in business on the date that final
judgment is entered in this action;
(b) Those health care providers referenced above
who do not have pending [] against defendant
Astellas, on the date of the Court’s
certification order, any individual action
wherein the recovery sought is based in whole
or in part on the type of claim asserted
herein;
(c) Health care providers are excluded from the
class as to defendant Astellas who have
previously obtained a judgment; or settled any
claims against the defendant concerning the
type [of] claims asserted herein; or have
previously executed releases releasing any
such claims against the defendant; or who have
signed any arbitration agreement with the
defendant concerning settlement claims.
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(Doc.

#

116

at

25).

Lakeland

Regional

also

requests

certification of a state subclass defined identically but
limited to members located in the State of Florida.
After

due

consideration,

the

Court

denies

class

certification.
II.

Class Action Analysis
A.

Legal Standard

As explained in Valley Drug Co. v. Geneva Pharms., Inc.,
350 F.3d 1181, 1187 (11th Cir 2003), “Rule 23 establishes the
legal roadmap courts must follow when determining whether
class certification is appropriate.”

Under Rule 23(a), a

class may be certified only if (1) the class is so numerous
that joinder of all members would be impracticable; (2) there
are questions of fact and law common to the class; (3) the
claims or defenses of the representatives are typical of the
claims and defenses of the unnamed members; and (4) the named
representatives will be able to represent the interests of the
class adequately and fairly. The burden of proof to establish
the propriety of class certification rests with the advocate
of the class, and failure to establish any one of the four
Rule 23(a) factors and at least one of the alternative

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requirements of Rule 23(b) precludes class certification.
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615-18 (1997).2
This Court must conduct a “rigorous analysis” of the Rule
23 prerequisites before certifying a class. Gen. Tel. Co. of
the S.W. v. Falcon, 457 U.S. 147, 161 (1982).

See also

Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1978)(“[T]he
class determination generally involves considerations that are
enmeshed in the factual and legal issues comprising the
plaintiff’s

cause

of

action

.

.

.

.

The

more

complex

determinations required in Rule 23(b)(3) class actions entail
even

greater

entanglement

with

the

merits.”)(internal

citations omitted).
B.

Standing

to

Assert

Claim

for

Damages

and

Rule

23(b)(3)
“Any analysis of class certification must begin with the
issue of standing.” Griffin v. Dugger, 823 F.2d 1476, 1482

2

Lakeland Regional seeks certification under Rules
23(b)(2) and (3). Subsection (2) is satisfied if “the party
opposing the class has acted or refused to act on grounds that
apply generally to the class, so that final injunctive relief
or corresponding declaratory relief is appropriate respecting
the class as a whole.” Subsection (3) is satisfied if “the
court finds that the questions of law or fact common to class
members predominate over any questions affecting only
individual members, and that a class action is superior to
other
available
methods
for
fairly
and
efficiently
adjudicating the controversy.”
-8-

(11th Cir. 1987). “Whether the named plaintiffs have standing
to assert their claims is a threshold legal issue” that should
be addressed prior to delving into the Rule 23(a) analysis of
numerosity,

commonality,

typicality,

and

adequacy

of

representation. Hines v. Widnall, 334 F.3d 1253, 1256 (11th
Cir. 2003).
Astellas asserts that the Motion for Class Certification
should be denied because Lakeland Regional lacks standing to
assert antitrust claims for money damages against Astellas
under the holding of Illinois Brick Co. v. Illinois, 431 U.S.
720 (1977).

Even if the required elements of numerosity and

commonality are satisfied, Lakeland Regional’s claims cannot
be “typical” of the class if Lakeland Regional lacks standing
to pursue such claims.
adequately

represent

Likewise, Lakeland Regional cannot

the

class

as

its

representative

if

Lakeland Regional lacks standing.
Lakeland Regional’s case rests on the position that it
was overcharged for Astellas’ Adenoscan product.

However,

Lakeland Regional’s corporate representative, Linda Nelson,
testified that Lakeland Regional has never purchased Adenoscan
directly from Astellas; all purchases of Adenoscan were from
two wholesalers. (Nelson Dep. at 13:22-14:8; 19:22-20:6;
25:11-16).

Regardless

of

how

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Lakeland

Regional

has

characterized its claim, the crux of Lakeland Regional’s
damages

claim

is

inevitably

that

Astellas

charged

the

wholesalers excessively for Adenoscan, and the wholesalers
passed the overcharge on to Lakeland Regional.
Lakeland Regional’s “pass on” claim is precisely the kind
addressed by and barred by Illinois Brick, 431 U.S. at 735.
Pursuant to Illinois Brick, only direct purchasers may bring
a claim for overcharges in the context of the antitrust laws,
with only narrow exceptions that do not apply in this case.
The Supreme Court reaffirmed the reasoning of Illinois Brick
in Kansas v. Utilicorp United, Inc., 497 U.S. 199, 216 (1990),
where the Court characterized Illinois Brick as a brightline
rule barring pass-on claims by indirect purchasers.

The

Utilicorp case also held that only direct purchasers have
standing to bring federal antitrust claims, even where the
direct purchasers may pass the entire unlawful overcharge to
downstream purchasers.

497 U.S. at 206-09.

It should be noted that in its July 25, 2011, Order
denying Astellas’ Rule 12(b)(6) motion to dismiss, this Court
held that Illinois Brick did not bar Lakeland Regional’s
antitrust claims at the pleadings stage. (Doc. # 66). At that
point in the proceedings, the Court’s analysis was confined to
the four corners of the Amended Complaint, and Lakeland
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Regional’s Amended Complaint contained allegations of direct
purchase of Adenoscan from Astellas.

In contrast, at the

present juncture, the Court has before it the deposition
testimony of Nelson, in which she clearly states that Lakeland
Regional

has

Astellas.3

never
This

purchased

uncontested

Adenoscan
fact

directly

eviscerates

from

Lakeland

Regional’s standing and its ability to meet the requirements
of Rule 23(a).

Lakeland Regional is not a direct purchaser

and therefore has no antitrust standing to pursue damages
claims

against

Astellas,

as

a

class

representative

or

otherwise.
A number of courts have come to the same conclusion in
the context of cases in which health care providers desire to
sue drug manufacturers for antitrust injuries, but purchase
the relevant drugs and medical devices from third parties. See

3

In its prior Order at the motion to dismiss stage, the
Court also noted that Lakeland Regional’s claims may survive
the Illinois Brick rule pursuant to Lowell v. American
Cyanamid Co., 177 F.3d 1228 (11th Cir. 1999). In Lowell, the
Eleventh Circuit reversed the district court’s application of
Illinois Brick to dismiss an antitrust action. The Eleventh
Circuit reasoned, among other things, that because the
complaint contained no allegations of “pass on” overcharges,
At this
the holding of Illinois Brick did not apply.
juncture, Lakeland Regional’s claims have been crystallized
and the Court ascertains that Lakeland Regional does sue based
on “pass on” overcharges.
Accordingly, Lowell does not
preclude application of the Illinois Brick rule in this case.
-11-

In re Hypodermic Prods. Antitrust Litig., No. 11-cv-3122, 2012
WL 1995047, at *4-5 (3d Cir. June 5, 2012)(reversing district
court’s finding that a health care provider was a direct
purchaser of medical device when the record showed that the
health care provider purchased the medical devices from a
distributor and health care provider’s claim was therefore
barred by Illinois Brick); Warren Gen. Hosp. v. Amgen, Inc.,
643 F.3d 77, 79-80 (3d Cir. 2011)(affirming dismissal of
antitrust action pursuant to Illinois Brick when plaintiff
hospital

purchased

drugs

directly

from

antitrust

the

from

a

wholesaler,

defendant);

rather

Delaware

than

Valley

Surgical Supply, Inc. v. Johnson & Johnson, 523 F.3d 1116,
1122-24 (9th Cir. 2008)(affirming district court’s application
of Illinois Brick to find that a health care provider who
purchased drugs from a third-party distributor did not have
standing to pursue an antitrust claim against such drug
manufacturer).

The result here is no different.

As Lakeland Regional has not cleared the first hurdle by
establishing its standing, the Court denies the Motion for
Class Certification to the extent Lakeland Regional seeks to
certify a class action pursuant to Rule 23(b)(3) for money
damages.

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C. Declaratory and Injunctive Relief and Rule 23(b)(2)
Lakeland Regional correctly asserts that its requests for
declaratory and injunctive relief are not barred by the
holding of Illinois Brick.

See In re Beef Indus. Litig., 600

F.2d 1148, 1167 (5th Cir. Aug. 17, 1979) (“[T]he Illinois
Brick

rule

relief”).4

has

no

application

to

claims

for

injunctive

However, Lakeland Regional has not sufficiently

briefed the Court as to the substance of its claims for
declaratory

and

injunctive

relief

certification pursuant to Rule 23(b)(2).

to

justify

class

Lakeland Regional’s

expert devotes all of his opinions to the damages claims and
provides no comment on the impact of prospective injunctive or
declaratory relief.
In its submissions to the Court concerning certification
pursuant to Rule 23(b)(2), Lakeland Regional indicates that
“we ask for certification under [Rule 23(b)(2)] in the event
that we reach a point where only non-monetary claims remain
. . . .” (Doc. # 144 at 13).

The Court has, indeed,

determined that only non-monetary claims remain.

Yet, the

Amended Complaint is silent as to the details of any requested

4

In Bonner v. City of Prichard, 661 F.2d 1206, 1209
(11th Cir. 1981), the Eleventh Circuit adopted all cases
decided by the Fifth Circuit Court of Appeals prior to the
close of business on September 30, 1981, as binding precedent.
-13-

injunctive or declaratory relief sought and asserts only a
generic demand for injunctive and declaratory relief.
In its Motion for Class Certification, Lakeland Regional
indicates that it seeks “declaratory and injunctive relief
preventing Astellas from continuing to tie its method patent
to the adenosine used in that method and from continuing to
engage in conduct designed to maintain and attain monopoly
power in the sale of adenosine and its adjuncts.” (Doc. # 116
at 8).

In addition, Lakeland Regional asserts that such

relief could possibly include:
(1)

(2)

(3)

A declaration that Astellas’ conduct, as set
forth in Counts I through VI of the First
Amended Complaint, is unlawful, in violation
of Federal and state antitrust laws, and has
caused injury to Lakeland Regional and the
class members, and an accompanying order for
Astellas to cease such conduct.
An order to provide and not contest access to
and the use of the [‘296 Patent] . . . without
threat
of
litigation,
and
without
the
requirement to purchase any other product
from Astellas, or not to purchase any other
product from a competing seller.
An order declining and providing that Astellas
must alternatively notify competing sellers of
adenosine that [Lakeland Regional] and class
members have the legal right to purchase
adenosine from such competing sellers, without
threat of litigation by Astellas against the
adenosine sellers or [Lakeland Regional] and
class members, including a release of any
threatened
claims
by
Astellas
against
[Lakeland
Regional],
class
members,
or
adenosine sellers.

-14-

(Doc. # 116 at 13).
It appears that Lakeland Regional is still developing its
theories

regarding

injunctive

and

declaratory

relief.

Lakeland Regional has presented only vague possibilities
concerning non-monetary relief, rather than concrete examples
supported by expert opinions or other evidence.

Neither

Lakeland Regional nor its expert has explained with any
specificity how injunctive or declaratory relief will benefit
the class absent the possibility of recovering money damages.
“Rule 23(b)(2) applies only when a single, indivisible remedy
would provide relief to each class member.” Wal-Mart Stores v.
Dukes, 131 S. Ct. 2541, 2545 (2011).

Lakeland Regional has

not met its burden.
Lakeland Regional has asserted that it seeks $867 million
in damages on behalf of the putative class. This Court agrees
with Astellas that “this lawsuit is about the damages claim,
and elevating an illusory injunction over a damages claim of
$867 million would be the tail wagging the dog.” (Doc. # 138
at 24).

The amorphous injunctive and declaratory relief

sought appears to be completely incidental to the damages
claim – a claim that this Court has determined Lakeland
Regional lacks standing to pursue. In addition, the Court
questions whether such relief, if granted, would benefit the
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class because Astellas has asserted that any claims for
injunctive relief will be moot as of October 2012, when a
generic version of Adenoscan will be made available: “With or
without this lawsuit, a generic version of Adenoscan will be
on the market by October, 2012.

As a result, the injunction

[Lakeland Regional] seeks will become irrelevant long before
such relief could ever be ordered by this Court.” (Doc. # 138
at 24).
Accordingly, Lakeland Regional has not persuaded the
Court

that

certification

of

a

Rule

23(b)(2)

class

is

appropriate. Based on the submissions before the Court, the
Court denies the Motion for Class Certification.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
Plaintiff Lakeland Regional’s Motion and Brief in Support
of Class Certification (Doc. # 116) is DENIED.
DONE and ORDERED in Chambers, in Tampa, Florida, this
24th day of September, 2012.

Copies to: All Counsel of Record

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