Meijer, Inc. et al v. Ranbaxy Inc. et al

Filing 124

Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDER"For the foregoing reasons, defendants motion (Docket No. 103) to certify this Courts September 7, 2016 Order for interlocutory appeal (Docket No. 80) is ALLOWED."(Caruso, Stephanie)

United States District Court
District of Massachusetts
)
Meijer, Inc. and Meijer
)
Distribution, Inc. on behalf of )
themselves and all others
)
similarly situated,
)
)
Plaintiffs,
)
)
v.
)
)
Ranbaxy Inc. and Sun
)
Pharmaceutical Industries Ltd., )
)
Defendants.
)
)

Civil Action No.
15-11828-NMG

MEMORANDUM & ORDER
GORTON, J.
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”).
was filed with this session on June 16, 2016.

-1-

The R&R

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
-2-

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
-3-

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, defendants’
motion to dismiss was denied.
Defendants now move this Court to certify to the First
Circuit Court of Appeals (“First Circuit”) whether 21 U.S.C.

-4-

§ 337(a) and the Supreme Court’s decision in Buckman preclude
plaintiffs’ fraud-on-the-FDA RICO and antitrust claims.
II.

Legal Analysis
A.

Legal Standard

District courts may certify an otherwise non-appealable
order for interlocutory review by the Court of Appeals if the
order 1) involves a controlling question of law 2) as to which
there are grounds for a substantial difference of opinion and
3) an immediate appeal would materially advance the ultimate
termination of the litigation. 28 U.S.C. § 1292(b); CarabelloSeda v. Municipality of Hormigueros, 395 F.3d 7, 9 (1st Cir.
2005).

Generally, the First Circuit will not certify

interlocutory appeals from a denial of a motion dismiss.
Carabello-Seda, 395 F.3d at 9.

Interlocutory appeals may be

necessary, however, “in long-drawn-out cases, such as antitrust
and conspiracy cases.” Milbert v. Bison Lab., 260 F.2d 431, 433
(3rd Cir. 1958) (citing House Report No. 1667, 85 Cong. 2d
Sess., pp. 1, 2).
B.

Application
1.

Controlling Question of Law

A question of law is “controlling” if reversal would
terminate the action. Phillip Morris Inc. v. Harshbarger, 957 F.
Supp. 327, 330 (D. Mass. 1997).

Such questions typically

implicate a pure legal principle that can be resolved without
-5-

extensive consultation to the record. S. Orange Chiropractic
Ctr., LLC v. Cayan LLC, No. 15-13069, 2016 WL 3064054, at *2 (D.
Mass. May 31, 2016).
Here, all of plaintiffs’ claims are predicated on fraud on
the FDA.

If the First Circuit finds those claims precluded by

the FDCA, they will be dismissed, thereby terminating the
action.

Resolution of the preclusion question is therefore

“controlling”.

See Philip Morris, 957 F. Supp. at 330 (finding

this element satisfied where a reversal by the Court of Appeals
would likely terminate the action).
Moreover, the First Circuit can make such a determination
with minimal review of the factual record because it only
requires statutory and case law interpretation. See Ahrenholz v.
Bd. of Tr. of Univ. of Ill., 219 F.3d 674, 676 (7th Cir. 2000)
(concluding that “question of law” refers to “a question of the
meaning of a statutory or constitutional provision, regulation,
or common law doctrine”).
2.

Materially Advance the Termination of Litigation

The requirement that an appeal will materially advance the
ultimate termination of the litigation is “closely tied” to the
controlling-question-of-law element. Philip Morris, 957 F. Supp.
at 330.

This condition is satisfied if reversal of the Court’s

decision advances the termination of the litigation. United Air
Lines, Inc. v. Gregory, 716 F. Supp. 2d 79, 92 (D. Mass. 2010).
-6-

As explained above, if the First Circuit decides that the
rationale underlying Buckman also precludes federal claims
alleging fraud on the FDA, the present case would be terminated.
3.

Substantial Ground for a Difference of Opinion

A substantial ground for a difference of opinion arises
where an issue involves “one or more difficult and pivotal
questions of law not settled by controlling authority.” Phillip
Morris Inc., 957 F. Supp. at 330 (quoting McGillicuddy v.
Clements, 746 F.2d 76, 76 n.1 (1st Cir. 1984)).

The issue must

involve a legal principle rather than an application of a legal
principle to a unique set of facts. United Air Lines Inc., 716
F. Supp. 2d at 92.
As far as this Court can discern, this is the first time a
party has brought antitrust claims predicated on fraud on the
FDA.

The viability of such claims raises a question not

precisely controlled by precedent.

Defendants rely on Buckman

which is arguably distinguishable from this matter because the
Supreme Court found plaintiffs’ state-law claims preempted by
the FDCA. See Buckman, 531 U.S. at 353.
implicated.

Here, state law is not

The question is whether the FDCA, a federal

statute, precludes claims based on two other federal statutes,
the Sherman Act and RICO.
Although, plaintiffs rely on POM, which address the
intersection of two federal statutes as a matter of statutory
-7-

interpretation, the Supreme Court in POM makes no explicit
reference to Buckman, the case does not involve fraud on the FDA
and it does not address the scope of 21 U.S.C. § 337(a). See
generally POM Wonderful, 134 S.Ct. 2228.

The issue raised by

defendants in their motion to dismiss is sufficiently novel and
not necessarily resolved under the onerous McGillicuddy
standard. See Phillip Morris Inc., 957 F. Supp. at 330 (granting
interlocutory appeal where a new statute and the question of its
preemption had not yet been resolved).
Preemption has been recognized as “naturally appropriate”
for interlocutory review. Id.

And preclusion, like preemption,

addresses important questions of federal law and policy as to
competing legislative goals.

Accordingly, the preclusion

question here raises the kind of issue suitable for
interlocutory review. See id.
Finally, defendants point to this Court’s decision in
United Air Lines, asserting that there are no substantial
grounds for a difference of opinion.

In that case, this Court

found that the movants challenged the application of a wellsettled legal standard to a novel set of facts. United Air Lines
Inc., 716 F. Supp. 2d at 92.

Concluding that such a question

did not present a unique or pivotal question of law, this Court
declined to allow interlocutory review.

In contrast, here the

question is which legal principle applies: a broad reading of
-8-

Buckman that prohibits fraud-on-the-FDA claims based on federal
statutes or a narrow reading that restricts its holding to
state-law fraud-on-the-FDA claims.

Unlike the issue in United

Air Lines, this is squarely a legal question, which, for the
reasons already stated, is appropriate for interlocutory review.

ORDER
For the foregoing reasons, defendants’ motion (Docket No.
103) to certify this Court’s September 7, 2016 Order for
interlocutory appeal (Docket No. 80) is ALLOWED.

So ordered.
/s/ Nathaniel M. Gorton
d
Nathaniel M. Gorton
United States District Judge
Dated March 28, 2017

-9-