In re ACTOS Antitrust Litigation

Filing 331

OPINION AND ORDER re: #321 MOTION to Stay proceedings pending interlocutory appeal, filed by Takeda Pharmaceutical Company Limited, Takeda Pharamceuticals, U.S.A., Inc., Takeda Development Center Americas, Inc., Takeda America Holdings, Inc. For the foregoing reasons, Takeda's motion to stay all proceedings in these coordinated actions pending appellate consideration of Takeda's petition for interlocutory appeal and any subsequent appeal on the merits is GRANTED. The Court hereby adjourns sine die the status conference that currently is scheduled for March 30, 2020. SO ORDERED. (Signed by Magistrate Judge Stewart D. Aaron on 3/9/2020) (kl)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

3/9/2020

IN RE ACTOS ANTITRUST LITIGATION
THIS DOCUMENT RELATES TO:

Master File No. 1:13-cv-09244 (RA) (SDA)

ALL ACTIONS
STEWART D. AARON, United States Magistrate Judge:
Pending before the Court is a motion by Defendants Takeda Pharmaceutical Company
Limited, Takeda America Holdings, Inc., Takeda Pharmaceuticals U.S.A., Inc. and Takeda
Development Center Americas, Inc. (collectively, “Takeda”) for an Order staying all proceedings
in these coordinated actions pending appellate consideration of Takeda’s petition for
interlocutory appeal and any subsequent appeal on the merits. (Not. of Mot., ECF No. 321.) For
the reasons set forth below, Takeda’s motion is GRANTED.1
BACKGROUND
Takeda’s motion is made in the two related, coordinated actions, In re Actos End-Payor
Antitrust Litig., No. 13-CV-09244 (the “EP Action”), and In re Actos Direct Purchaser Antitrust
Litig., No. 15-CV-03278 (the “DP Action”). The EP Action concerns whether Takeda is liable to the
indirect purchasers of Takeda’s diabetes medication called ACTOS (“End-Payor Plaintiffs” or
“EPPs”) for unlawfully inflating that drug’s prices in violation of state antitrust laws. In re Actos
End-Payor Antitrust Litig., 2019 WL 4805843, at *1 (S.D.N.Y. Sept. 30, 2019). The DP Action

In deciding the pending motion, the Court has reviewed and considered the Declaration of Alexander J.
Scolnik, together with its exhibits (Scolnik Decl., ECF No. 322); Takeda’s memorandum of law in support
of its motion (Takeda Mem., ECF No. 323); Plaintiffs’ memorandum of law in opposition to Takeda’s
motion (Pl. Opp. Mem., ECF No. 328); the Reply Declaration of Andrew J. Scolnik, together with its exhibit
(Scolnik Reply Decl., ECF No. 330); and Takeda’s reply memorandum of law. (Takeda Reply, ECF No. 329.)

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concerns whether several pharmaceutical companies, including Takeda, are liable to the direct
purchasers of brand and generic versions of two diabetes drugs, called ACTOS and ACTOplus met
(“Direct-Purchaser Plaintiffs” or “DPPs”), for unlawfully inflating those drugs’ prices in violation
of federal antitrust laws. See In re ACTOS Direct Purchaser Antitrust Litig., 414 F. Supp. 3d 635,
635-36 (S.D.N.Y. 2019).
On September 30, 2019, District Judge Abrams issued an Order in the EP Action denying
Takeda’s motion to dismiss (the “EPP Order”). See In re Actos End-Payor Antitrust Litig., 2019 WL
4805843, at *20. On October 8, 2019, Judge Abrams issued an Order in the DP Action granting
Defendants’ motions to dismiss Counts II through VIII of the Complaint, but denying Takeda’s
motion to dismiss Count I (i.e., the DPPs’ monopolization claim against Takeda) (the “DPP
Order”). See In re ACTOS Direct Purchaser Antitrust Litig., 414 F. Supp. 3d at 650.
On January 28, 2020, Judge Abrams certified the EPP Order and the DPP Order for
interlocutory appeal. See In re Actos End-Payor Antitrust Litig., No. 13-CV-09244 (RA), 2020 WL
433710, at *3 (S.D.N.Y. Jan. 28, 2020). On February 13, 2020, Takeda filed the instant motion to
stay. (See Not. of Mot.)
LEGAL STANDARDS
Courts weigh four factors when considering a motion to stay pending an appeal: “(1)
whether the stay applicant has made a strong showing that he is likely to succeed on the merits;
(2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the
stay will substantially injure the other parties interested in the proceeding; and (4) where the
public interest lies.” Nken v. Holder, 556 U.S. 418, 434 (2009) (quotation omitted); see also In re
World Trade Ctr. Disaster Site Litig., 503 F.3d 167, 170 (2d Cir. 2007). “The first two factors of
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[this] standard are the most critical,” Nken, 556 U.S. at 434, and bear an inversely proportional
relationship to one another. Thapa v. Gonzales, 460 F.3d 323, 334 (2d Cir. 2006). Where the
likelihood of success on the merits is significant, less irreparable harm must be shown, and vice
versa. Id. In no case, however, is it “enough that the chance of success be better than negligible,”
or that there be a mere “possibility of irreparable injury.” Nken, 556 U.S. at 434. (quotations
omitted).
The issuance of a stay is “an exercise of judicial discretion,” and “[t]he propriety of its
issue is dependent upon the circumstances of the particular case.” Nken, 556 U.S. at 433
(quotation omitted). “The party requesting a stay bears the burden of showing that the
circumstances justify an exercise of [this] discretion.” Id. at 433-34.
APPLICATION
The Court considers below each of the relevant factors.
1. Likelihood Of Success
Takeda has shown more than a “mere possibility” that relief will be granted on appeal.
See Nken, 556 U.S. at 434. In granting Takeda’s motion to certify the EPP and DPP Orders for
interlocutory appeal, Judge Abrams noted “the absence of controlling authority, as well as the
novelty and complexity” of one of the central issues on appeal. See In re Actos End-Payor Antitrust
Litig., 2020 WL 433710, at *2. Thus, this factor weighs in favor of granting a stay. See Kinkead v.
Humana, Inc., No. 15-CV-01637 (JAM), 2016 WL 9453808, at *3 (D. Conn. Oct. 13, 2016) (granting
stay where “appeal raises a nuanced legal question of apparent first impression”).

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2. Irreparable Injury
Takeda argues that it will be irreparably harmed by the cost and burden of continuing this
litigation while the appeal is pending. (See Takeda Mem. at 4-6.) This is not sufficient to establish
irreparable injury. See Strougo v. Barclays PLC, 194 F. Supp. 3d 230, 234 (S.D.N.Y. 2016) (“the
prospect of incurring litigation costs, even if substantial, is not sufficient to constitute irreparable
injury”). However, Takeda also argues that it would be “be irreparably harmed because, in the
absence of a stay, Takeda may needlessly be required to waive privilege over certain
communications with its attorneys before the Second Circuit decides the current appeal.”
(Takeda Mem. at 5.) The Court finds that this unique issue regarding privilege waiver weighs in
favor of granting a stay.
Under the schedule set by the Court, Takeda must elect whether to rely on an advice-ofcounsel defense by October 1, 2020. (Takeda Mem. at 5.) Takeda asserts that, “[w]ithout a stay,
Takeda may be required to invoke the advice of counsel as a defense—which could, in turn,
necessitate disclosure of otherwise highly sensitive and privileged documents to Plaintiffs—that
may be rendered completely unnecessary if the Second Circuit rules in Takeda’s favor.” (Id.) Given
the “overriding importance of the attorney-client privilege to our system of jurisprudence,”
United States v. Sabbeth, 34 F. Supp. 2d 144, 152 (E.D.N.Y. 1999), the Court finds that this factor
favors granting a stay.
3. Injury To Plaintiffs
Plaintiffs argue that they will be injured by the granting of a stay given the fact that the
first of the two coordinated cases was filed in 2013 and that “discovery is only now beginning.”
(Pl. Opp. Mem. at 9.) However, Plaintiffs in the coordinated cases only are seeking money
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damages and do not allege any continuing harm. If they ultimately prevail, Plaintiffs will recover
for their financial injuries. Thus, this factor is neutral. See Strougo, 194 F. Supp. 3d at 234; see
also Kinkead, 2016 WL 9453808, at *3 (“Plaintiff will not be substantially injured by a stay, given
that she is seeking past wages for a discrete time period and is not suffering continuing harm.”).2
4. Public Interest
The public interest favors granting a stay. Plaintiffs already have served subpoenas for the
production of documents on twenty-one pharmaceutical companies. (See Scolnik Decl., Exs. 525.) Moreover, Takeda is preparing a subpoena to the FDA. (See Takeda Mem. at 8.) Granting a
stay would avoid burdening these non-parties with discovery obligations that may be
unnecessary. In addition, “the motivation underlying [Judge Abrams’] decision to grant
certification—the desire to resolve this issue before the parties engage in potentially unnecessary
litigation—would be undermined without an accompanying stay.” Kinkead, 2016 WL 9453808, at
*3. As Judge Abrams held, “any ‘risk of short-term delay’ of the resolution of this case by
certifying an interlocutory appeal is ‘outweighed by the potential advantage of materially
advancing the ultimate termination of the litigation.’” In re Actos End-Payor Antitrust Litig., 2020
WL 433710, at *3 (citing In re Trace Int’l Holdings, Inc., No. 04-CV-01295 (KMW), 2009 WL
3398515, at *3 (S.D.N.Y. Oct. 21, 2009) (emphasis in original)).
Weighing all the relevant factors, the Court finds, in its discretion, that a stay is warranted.

Plaintiffs also allege that they will be irreparably harmed by the granting of a stay because there is a risk
of “witnesses’ memories fading with time.” (Pl. Opp. Mem. at 9.) However, as Takeda notes in reply, many
of the key events in this case took place over ten years ago, such that memories already have faded. (See
Reply at 6.)
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CONCLUSION
For the foregoing reasons, Takeda’s motion to stay all proceedings in these coordinated
actions pending appellate consideration of Takeda’s petition for interlocutory appeal and any
subsequent appeal on the merits is GRANTED.
The Court hereby adjourns sine die the status conference that currently is scheduled for
March 30, 2020.
SO ORDERED.
DATED:

New York, New York
March 9, 2020
______________________________
STEWART D. AARON
United States Magistrate Judge

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