Biocad JSC v. F. Hoffman La-Roche Ltd. et al
Filing
75
OPINION AND ORDER re: 56 MOTION to Dismiss the Amended Complaint filed by Genentech, Inc., 53 MOTION to Dismiss / Notice of Motion to Dismiss Plaintiff's Amended Complaint filed by R-Farm JSC, 51 MOTION t o Dismiss The Amended Complaint filed by F. Hoffman La-Roche Ltd., Roche Holding AG. Because Plaintiff has failed to plead an antitrust injury, because the foreign locus of Plaintiff's claims place them outside the reach of U.S. an titrust law, and because Plaintiff has not demonstrated a significant threat of injury from an impending violation of the antitrust laws, Defendants' motions to dismiss are GRANTED, and Plaintiff's request for leave to amend the First Amended Complaint is DENIED. The Clerk of Court is respectfully directed to terminate the motions pending at docket numbers 51, 53, and 56, and to close this case. (Signed by Judge Richard J. Sullivan on 9/30/2017) (mro)
principal place of business in Moscow,
Russia.
taking steps to market its biosimilars in the
United States by opening a subsidiary and
hiring personnel in the United States,
securing a lease for space to be used as a
laboratory, budgeting the cost of entry into
the U.S. market, opening a new
manufacturing site in Eastern Europe, hiring
consultants to help ensure that the new site
meets U.S. Food and Drug Administration
(“FDA”) and European Union regulations,
developing a Quality Improvement Plan to
meet FDA requirements, and spending over
$7 million on equipment and incidental fees.
(Id. ¶¶ 68–71, 74–80.) Plaintiff “anticipates
FDA approval to sell biosimilars in the U.S.
and plans to compete head to head against
[Defendants] by dramatically undercutting”
Defendants’ prices for the Drugs. (Id. ¶ 80.)
The First Amended Complaint alleges an
elaborate
conspiracy
whereby
the
Defendants2 engaged in illegal anticompetitive behavior in Russia in order to
sabotage Plaintiff’s nascent efforts to enter
the U.S. market for oncology drugs.
Plaintiff alleges that Defendants maintain a
monopoly in the United States over certain
treatments called monoclonal antibodies,
and in particular, over three drugs:
bevacizumab
(Avastin),
trastuzumab
(Herceptin), and rituximab (Rituxan)
(collectively, the “Drugs”). Plaintiff further
alleges that it is the only pharmaceutical
company in the world able to manufacture
biosimilars of the Drugs and thus compete
directly with Defendants in the United States
and in other countries. (FAC ¶¶ 56, 63.)
Biosimilars are drugs sold at prices lower
than their brand-name equivalents. (Id. ¶¶
82–84.)
However, according to the First
Amended Complaint, Defendants’ illegal
and anti-competitive conduct in Russia has
hampered Plaintiff’s plans to enter the U.S.
market for the Drugs. Plaintiff alleges that
Defendants perpetrated an assortment of
illegal, anticompetitive schemes, including:
Plaintiff alleges that it began developing
biosimilar monoclonal antibodies in 2010,
including biosimilars of the Drugs, and
received approval from the Russian Ministry
of Health for its biosimilars of the Drugs in
late 2014 and 2015.
(Id. ¶¶ 58–62.)
Plaintiff has two production sites for its
drugs in Russia, one in St. Petersburg and
one in Moscow, and has “contracts for the
sale and delivery of its biosimilars valued at
over U.S. $200 million, with distribution
partners in Indonesia, Turkey, Armenia,
Cambodia, Kenya, Kyrgyzstan, Morocco,
Myanmar, Pakistan, South Africa, Ukraine,
Uzbekistan, [Sri] Lanka, and Vietnam.” (Id.
¶¶ 64, 67.) Plaintiff alleges that it has begun
Engaging in predatory pricing by
increasing the prices of the Drugs in
the United States and decreasing the
prices of the Drugs in Russia by 72%
to 84% (id. ¶¶ 121–27);
Selling the Drugs in Russia through a
distributor (Defendant R-Pharm) at a
loss (id. ¶¶ 128–35);
Bribing doctors, pharmacies, and
hospitals in Russia to prescribe and
request the Drugs from statesponsored insurance programs (id. ¶¶
136–80);
Limiting distribution of the Drugs in
order to thwart testing of biosimilars
(id. ¶¶ 181–91);
2
The First Amended Complaint rarely distinguishes
between the acts of each Defendant, and frequently
refers to all four Defendants simply as “Defendants,”
or to the Roche Group as “Roche.” (See, e.g., FAC ¶
4 n.1, 9, 11, 13.)
2
Illegally tying and bundling the drug
Herceptin to another cancer drug,
Perjeta, in Russia (id. ¶¶ 192–205);
Making fraudulent bids for and
misrepresenting the availability of
Avastin in Russia (id. ¶¶ 206–14);
and
Packaging Herceptin in a way that
forced patients to buy, and
eventually discard, more of the drug
than they would if it was packaged
differently (id. ¶¶ 215–22).
bring a claim,3 that the Court lacks subjectmatter jurisdiction over Plaintiff’s Clayton
Act and Robinson-Patman Act claims, and
that
the
Foreign
Trade
Antitrust
Improvements Act of 1982 (“FTAIA”) bars
Plaintiff’s Sherman Act and Donnelly Act
claims.4 The motions were fully briefed by
February 15, 2017.
II. LEGAL STANDARD
On a Rule 12(b)(1) motion to dismiss,
the party seeking to invoke the Court’s
jurisdiction bears the burden of proving that
subject matter jurisdiction exists. Robinson
v. Overseas Military Sales Corp., 21 F.3d
502, 507 (2d Cir. 1994). “A case is properly
dismissed for lack of subject matter
jurisdiction under Rule 12(b)(1) when the
district court lacks the statutory or
constitutional power to adjudicate it.”
Makarova v. United States, 201 F.3d 110,
113 (2d Cir. 2000). In deciding a motion to
dismiss a complaint pursuant to Rule
12(b)(1), “[t]he court must take all facts
alleged in the [pleading] as true and draw all
reasonable inferences in favor of [the
claimant].” Morrison v. Nat’l Australia
Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008)
(citation and quotation marks omitted).
The First Amended Complaint alleges that
the
above-described
anti-competitive
conduct was part of an effort “to foreclose
the U.S. market to biosimilar alternatives” to
the Drugs. (See, e.g., id. ¶ 226.) Plaintiff
alleges that, because of Defendants’ actions,
it has been “deprived of the ability to realize
its substantial investments into the
preparations
undertaken
to
import
biosimilars in[to] the U.S.” (Id. ¶ 230.)
B. Procedural History
Plaintiff commenced this action by filing
a complaint against Defendants FHL Roche
Ltd., Genentech, Inc., and R-Pharm JSC on
June 7, 2016. (Doc. No. 1.) On October 24,
2016, Plaintiff filed the First Amended
Complaint, adding Roche Holding AG as a
Defendant and asserting claims under the
Sherman Act, 15 U.S.C. §§ 1, 2, the Clayton
Act, 15 U.S.C. §§ 15, 26, the RobinsonPatman Act, 15 U.S.C. § 13, and the
Donnelly Act, N.Y. Gen. Bus. Law § 340 et
seq. (Doc. No. 37.) On December 12, 2016,
each Defendant filed a motion to dismiss the
First Amended Complaint (Doc. Nos. 51–
58) arguing, among other things, that
Plaintiff did not allege an antitrust injury
and therefore lacks antitrust standing to
Although Defendant Genentech, Inc.’s brief makes
reference to Plaintiff’s constitutional standing, its
arguments and analysis reflect that it is only
challenging Plaintiff’s antitrust standing.
3
The Court does not reach Defendants’ arguments
that Plaintiff failed to state a claim for each of its
causes of action, that Plaintiff R-Pharm was not
properly served, that the Court lacks personal
jurisdiction over R-Pharm, and that the case should
be dismissed under the doctrine of forum non
conveniens. The Court notes that it may dismiss a
complaint without addressing personal jurisdiction in
cases “with multiple defendants – over some of
whom the court indisputably has personal jurisdiction
– in which all defendants collectively challenge the
legal sufficiency” of the complaint. Chevron Corp. v.
Naranjo, 667 F.3d 232, 246 n.17 (2d Cir. 2012).
4
3
To survive a motion to dismiss pursuant
to Rule 12(b)(6) of the Federal Rules of
Civil Procedure, a complaint must “provide
the grounds upon which [the] claim rests.”
ATSI Commc’ns, Inc. v. Shaar Fund, Ltd.,
493 F.3d 87, 98 (2d Cir. 2007); see also Fed.
R. Civ. P. 8(a)(2) (“A pleading that states a
claim for relief must contain . . . a short and
plain statement of the claim showing that the
pleader is entitled to relief . . . .”). To meet
this standard, plaintiffs must allege “enough
facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “A
claim has facial plausibility when the
plaintiff pleads factual content that allows
the court to draw the reasonable inference
that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). In reviewing a Rule
12(b)(6) motion to dismiss, a court must
accept as true all factual allegations in the
complaint and draw all reasonable
inferences in favor of the plaintiff. ATSI
Commc’ns, 493 F.3d at 98. However, that
tenet “is inapplicable to legal conclusions.”
Iqbal, 556 U.S. at 678. Thus, a pleading that
offers only “labels and conclusions” or “a
formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550
U.S. at 555. If the plaintiff “ha[s] not
nudged [its] claims across the line from
conceivable to plausible, [its] complaint
must be dismissed.” Id. at 570.
pleading-stage inquiry and when a
complaint by its terms fails to establish this
requirement [a court] must dismiss it as a
matter of law.” Gatt Commc’ns Inc. v. PMC
Assocs. L.L.C., 711 F.3d 68, 75 (2d Cir.
2013) (affirming district court’s dismissal of
complaint for lack of antitrust standing
pursuant to Rule 12(b)(6)).
In order to demonstrate antitrust
standing, a plaintiff must allege “(a) that it
suffered a special kind of ‘antitrust injury,’
and (b) that it is a suitable plaintiff to pursue
the alleged antitrust violations and thus is an
‘efficient enforcer’ of the antitrust laws.”
Gatt Commc’ns, Inc. v. PMC Assocs.,
L.L.C., 711 F.3d 68, 76 (2d Cir. 2013)
(quoting Port Dock & Stone Corp. v.
Oldcastle Ne., Inc., 507 F.3d 117, 121 (2d
Cir. 2007)). In order to establish antitrust
injury, “the plaintiff must demonstrate that
its injury is of the type the antitrust laws
were intended to prevent and that flows
from that which makes defendants’ acts
unlawful.” In re Aluminum Warehousing
Antitrust Litig., 833 F.3d 151, 157 (2d Cir.
2016) (quotation marks omitted).
Courts employ a “three-step process for
determining whether a plaintiff has
sufficiently alleged antitrust injury.” Gatt
Commc’ns, 711 F.3d at 76. First, the
plaintiff must identify the anticompetitive
practice of which it complains. See id.
Next, the Court must “identify the actual
injury the plaintiff alleges.” Id. (quotation
marks omitted). Finally, because “[i]t is not
enough for the actual injury to be causally
linked to the asserted violation,” the Court
must “compare the anticompetitive effect of
the specific practice at issue to the actual
injury the plaintiff alleges” in order to
determine whether the injury alleged is “of
the type the antitrust laws were intended to
prevent and that flows from that which
makes or might make defendants’ acts
III. DISCUSSION
A. Plaintiff Has Not Pleaded Antitrust
Standing
An antitrust plaintiff must show both
constitutional standing and antitrust
standing. Gelboim v. Bank of Am. Corp.,
823 F.3d 759, 770 (2d Cir. 2016). Although
constitutional standing is not implicated
here, antitrust standing is “a threshold,
4
unlawful.” Id. (alterations and quotation
marks omitted).
pharmaceutical market. See 21 U.S.C. §
355(a); Kos Pharm., Inc. v. Barr Labs., Inc.,
242 F. Supp. 2d 311, 318 (S.D.N.Y. 2003)
(FDA approval presents a “significant
hurdle” for plaintiff’s “prospects for actual
sales” of its drug). Courts thus require a
plaintiff to allege that FDA approval of the
potential drug is at least “probable.” See,
e.g., Andrx Pharm., Inc. v. Biovail Corp.
Int’l, 256 F.3d 799, 808 (D.C. Cir. 2001),
cert. denied, 535 U.S. 931 (2002) (plaintiff
“could have alleged its intent and
preparedness to enter the market by claiming
that FDA approval was probable”); In re
Ciprofloxacin
Hydrochloride
Antitrust
Litig., 261 F. Supp. 2d 188, 207 (E.D.N.Y.
2003) (finding no antitrust standing when
the complaint “does not allege that
[plaintiffs] filed an ANDA or that FDA
approval was probable”) (citing Andrx
Pharm., Inc., 256 F.3d at 806–808).
Plaintiff contends that its antitrust injury
arises from its exclusion from the U.S.
pharmaceutical
market
caused
by
Defendants’ anticompetitive conduct in
Russia.5 However, Plaintiff acknowledges
that it does not currently participate, and has
never participated, in the U.S. market,
arguing instead that Defendants illegally
“prevent[ed] [it] from engaging in business”
there. Am. Banana Co. v. United Fruit Co.,
166 F. 261, 264 (2d Cir. 1908), aff’d, 213
U.S. 347 (1909). A competitor that has not
yet entered a market may also suffer
antitrust injury if it was illegally prevented
from doing so. See id. However, at the very
least, such a would-be competitor must
demonstrate its “intention and preparedness”
to enter the relevant market. Reaemco, Inc.
v. Allegheny Airlines, 496 F. Supp. 546, 553
(S.D.N.Y. 1980) (quoting Am. Banana Co.,
166 F. at 264).
To be sure, not all courts have required
that a plaintiff allege that it has received or
applied for FDA approval in order establish
preparedness to enter the pharmaceutical
industry with a particular drug. Compare
Bristol–Myers Squibb Co. v. Copley Pharm.,
Inc., 144 F. Supp. 2d 21, 25 (D. Mass. 2000)
(intention
and
preparedness
not
demonstrated when plaintiff had not
obtained the “tentative regulatory approval
required for market entry”), with Xechem,
Inc. v. Bristol-Myers Squibb Co., 274 F.
Supp. 2d 937, 943 (N.D. Ill. 2003)
(declining to find a per se rule requiring a
new drug filing with the FDA), and BristolMyers Squibb Co. v. Ben Venue Labs., 90 F.
Supp. 2d 540, 546 (D.N.J. 2000) (party
“need not demonstrate that the FDA has first
approved its product” to have standing).
However, many of the cases holding that an
application for FDA approval is not required
to plead preparedness involve claims that
FDA applications were delayed or
obstructed as a result of allegedly fraudulent
In the context of claims involving
entrance into the U.S. pharmaceutical
market – a highly regulated industry –
Plaintiffs
alleging
intention
and
preparedness must demonstrate a likelihood
of FDA approval of the would-be
competitive drug, since such approval is a
prerequisite for any drug to enter the U.S.
5
To the extend the FAC can be read to allege injuries
in Russia, those injuries do not give rise to an
antitrust injury for the reasons set forth in Part B of
this opinion. See, e.g., In re Intel Microprocessor
Litig. 452 F. Supp. 2d. 555, 557 (D. Del. 2006)
(dismissing complaint for lack of antitrust standing
when it alleged “foreign injuries that occurred in
foreign markets” that were “not the type of injury that
Congress intended to prevent through the [FTAIA] or
the Sherman Act”); de Atucha v. Commodity Exch.,
Inc., 608 F. Supp. 510, 518 (S.D.N.Y. 1985)
(“Congress did not contemplate recovery under the
antitrust laws by an individual who traded, and was
injured entirely outside of United States commerce.”)
5
“to include any allegations regarding how
far [plaintiff] has gone in the process of
obtaining FDA approval of products . . . [or]
when such approval may be anticipated”).
patent applications or sham litigation by the
defendants – something that is not alleged
here. See, e.g., Rochester Drug Co-op., Inc.
v. Braintree Labs., 712 F.Supp.2d 308, 317
(D. Del. 2010) (plaintiff alleged that “as a
result of [the patent holder]’s scheme, the
ANDA approval process was delayed by the
FDA”); In re Wellbutrin SR/Zyban Antitrust
Litig., 281 F. Supp. 2d 751, 757 (E.D. Pa.
2003) (plaintiffs “alleged that [d]efendants
filed frivolous lawsuits” that “directed
resources away from FDA approval and
toward the defense of the infringement
actions . . . result[ing] in a delay of FDA
approval”).
Here, Plaintiff has not merely failed to
allege that it filed for FDA approval – it has
failed to supply any facts whatsoever
regarding the FDA approval process for its
biosimilars.
Plaintiff provides no
information about the expected timeline for
approval, what clinical trials would be
required, whether it has begun conducting
clinical trials, its expected FDA application
date, whether it has begun preparing an
application, whether it has contacted the
FDA, whether it has ever obtained approval
for other biosimilar drugs from the FDA, or
whether its contemplated approval would
require a New Drug Application or an
Abbreviated New Drug Application. And
while Plaintiff alleges that it has audited and
inspected one of its facilities in Russia in
contemplation of FDA approval, it does not
explain the relevance of that facility to the
approval of its drugs in the United States. In
sum, Plaintiff has provided little information
from which the Court may assess the
likelihood of approval of its biosimilars, and
has thus failed to allege more than “a hope
or expectation” of engaging in the U.S.
pharmaceutical market. Reaemco, Inc., 496
F. Supp. at 554 (quoting Image & Sound
Serv. Corp. v. Altec Serv. Corp., 148 F.
Supp. 237, 239 (D. Mass. 1956)).
But even assuming that a formal
application for FDA approval is not required
to establish preparedness to engage in the
U.S. pharmaceutical market, an antitrust
plaintiff must still demonstrate that FDA
approval is probable.
Consequently,
plaintiffs alleging intent and preparedness to
enter a pharmaceutical market typically
include facts regarding the stage of the
FDA-approval process their product has
reached or the steps the plaintiff has taken
(or plans to take) to secure approval. See,
e.g., Andrx Pharm., Inc., 256 F.3d at 807
(approving district court’s dismissal of
complaint alleging only that plaintiff had
filed an Abbreviated New Drug Application,
but reversing because the court erred in
dismissing with prejudice when the plaintiff
may have been able to cure the deficiency);
Retrophin, Inc. v. Questcor Pharm., Inc., 41
F. Supp. 3d 906, 915 (C.D. Cal. 2014)
(finding sufficient intent and preparedness
when plaintiff alleged to have “a plan to
obtain regulatory approvals” and an
“apparatus to conduct clinical trials to obtain
FDA approval”) (internal quotation marks
omitted); cf. Brotech Corp. v. White Eagle
Int’l Techs. Grp., Inc., No. CIV.A.03-232,
2004 WL 1427136, at *6 (E.D. Pa. June 21,
2004) (dismissing counterclaim that failed
Plaintiff places great emphasis on
Xechem, Inc. v. Bristol-Myers Squibb Co.,
274 F. Supp. 2d 937, for the proposition that
it has sufficiently alleged its preparedness to
engage the U.S. pharmaceutical market. In
that case, like the instant case, the plaintiffs
alleged that they had taken various steps to
prepare for entry into the U.S. market,
including
obtaining
production
and
distribution agreements in other parts of the
6
world. Id. at 941–42. However, in Xechem,
the plaintiffs also alleged that the
defendant’s anti-competitive conduct –
filing fraudulent patents – directly prevented
them from applying for FDA approval
during the relevant time period. Id. at 944
(“Plaintiffs may have been in the position to
file for FDA approval with the ANDA as
early as 1998, but for Defendant’s
purportedly fraudulently-obtained patents.”).
Here, Plaintiff makes no allegation that any
of the Defendants’ anticompetitive conduct
has prevented it from applying for FDA
approval, and in fact provides no
explanation for its failure to take any steps
toward applying for FDA approval to sell its
biosimilars in the United States. Plaintiff’s
emphasis on Kos Pharm., Inc. v. Barr Labs.,
Inc., 242 F. Supp. 2d at 311, is also
unavailing, as that case involved a
declaratory judgment for a patent
infringement claim, not an antitrust claim,
and in any event involved a party that had
already applied for FDA approval of the
potentially-infringing generic medicine. See
id. at 317–18.
of contracts to enter the business of selling
its biosimilars in the United States.
For these reasons, the Court finds that
Plaintiff has failed to set forth facts
demonstrating its intention and preparedness
to engage the U.S. pharmaceutical market,
and thus has failed to allege that it has
suffered an antitrust injury. Defendants’
motions to dismiss for lack of antitrust
standing are therefore granted.
B. The Foreign Locus of Plaintiff’s Claims
Also Bars This Lawsuit
But even if the First Amended
Complaint could clear the bar for antitrust
standing, the foreign locus of Plaintiff’s
allegations would still defeat each of its
causes of action. Put simply, (1) the Clayton
Act and Robinson-Patman Act do not confer
subject-matter jurisdiction over Plaintiff’s
claims, (2) the FTAIA excludes Plaintiff’s
allegations from the reach of the Sherman
Act, and (3) the Donnelly Act does not
extend to claims that are beyond the reach of
the Sherman Act. The Court will address
each of these conclusions in turn.
Although Plaintiff provides other factual
allegations relevant to its intent and
preparedness
to
engage
the
U.S.
pharmaceutical market, including that it has
created a subsidiary in the United States,
leased space in Boston, Massachusetts, and
taken steps to ensure that its new facility in
Russia is FDA-compliant (FAC ¶¶ 68–71,
75–80), none of these allegations overcome
the paucity of facts set forth to demonstrate
that FDA approval of Plaintiff’s biosimilars
is anywhere near likely or “probable.”
Indeed, Plaintiff’s other factual allegations
relate principally to its business in Russia
and in other parts of the world, not efforts to
enter the U.S. market, and in fact underscore
its lack of background and experience in the
U.S. pharmaceutical market and the absence
1. Plaintiff’s Clayton Act and RobinsonPatman Act Claims
The Clayton Act and Robinson-Patman
Act provide a private cause of action for
illegal tying, price discrimination, and other
anticompetitive conduct. However, both
acts contain parallel, jurisdiction-limiting
language that confines their reach to persons
and activities within U.S. commerce,
extending only to conduct involving
commodities sold for “use, consumption, or
resale within the United States,” 15 U.S.C.
§§ 13 (Robinson-Patman Act), 14 (Clayton
Act), and to persons “engaged in
commerce,” id., a phrase the Supreme Court
has determined is “a term of art indicating a
limited assertion of federal jurisdiction,”
7
Circuit City Stores, Inc. v. Adams, 532 U.S.
105, 121 (2001). Specifically, the Supreme
Court has held that the reach of both acts is
limited “to persons and activities that are
themselves ‘in commerce,’” Gulf Oil Corp.
v. Copp Paving Co., 419 U.S. 186, 194
(1974), as opposed to “anticompetitive
acquisitions and activities [that] affect
commerce,” id. at 195 (emphasis added); see
also Rotec Indus., Inc. v. Mitsubishi Corp.,
348 F.3d 1116, 1122 (9th Cir. 2003) (“The
reach of the [Robinson-Patman Act] extends
only to persons and activities which are
themselves within the flow of commerce
among the states or with foreign nations, but
does not extend to all activities which affect
such commerce.”).
Defendants charged prices of 72% to 84%
less in Russia than in the United States,
likewise depends explicitly upon products
sold in Russia. (FAC ¶¶ 124–27). Although
one leg of the alleged price discrimination
scheme took place in the United States, “no
cause of action arises under the [RobinsonPatman] Act unless both commodities
involved in the alleged price discrimination
are ‘sold for use, consumption, or resale
within the United States.’” Zenith Radio
Corp. v. Matsushita Elec. Indus. Co., 402 F.
Supp. 244, 248 (E.D. Pa. 1975) (quoting 15
U.S.C. § 13(a)) (dismissing claims when
“one ‘leg’ of the price discrimination alleged
by plaintiffs involves commodities that are
‘sold for use, consumption, or resale,’ not
within the United States, but within a
foreign country, Japan”); see also C.E.D.
Mobilephone Commc’ns, Inc. v. Harris
Corp., No. 81-cv-4651 (JFK), 1985 WL
193, at *2 (S.D.N.Y. Jan. 14, 1985) (“The
Robinson-Patman Act, 15 U.S.C. § 13(a),
makes it unlawful to discriminate in price
between purchasers of like commodities
only where such commodities ‘are sold for
use, consumption, or resale within the
United States.’”) (emphasis in original).
Plaintiff’s illegal tying claim under the
Clayton Act, which alleges that Defendants
tied and bundled the drug Herceptin to
another cancer drug, Perjeta, in Russia,
unambiguously pertains only to conduct
involving commodities sold in Russia. (See
FAC ¶ 193 (“[Defendants] organized and
orchestrated a classic tying and bundling
scheme, where [Defendants] forced Russian
cancer patients in need of Perjeta . . . to
purchase [Defendants’] Herceptin.”)). This
claim is not actionable under the Clayton
Act, even broadly construed, because it does
not involve the purchase or sale of products
bound for “use, consumption, or resale
within the United States.” See, e.g., Boyd v.
AWB Ltd., 544 F. Supp. 2d 236, 247
(S.D.N.Y. 2008) (Lynch, J.) (dismissing
Clayton Act claim when “[n]othing in the
complaint remotely suggests that the
transactions . . . involved the purchase or
sale of any . . . commodity that was bound
‘for consumption, use, or resale within the
United States’”).
Plaintiff devotes just three sentences in
its 50-page opposition brief to the RobinsonPatman Act, conclusorily asserting that price
discrimination between purchasers in
different geographic markets may violate the
Robinson-Patman Act. (See Opp’n at 49–
50.) But the cases cited by Plaintiff all
involve price discrimination schemes taking
place entirely within the United States. See,
e.g., Utah Pie Co. v. Cont’l Baking Co., 386
U.S. 685, 697, (1967) (discussing price
discrimination for frozen pies primarily in
Salt Lake City, Utah); Porto Rican Am.
Tobacco Co. of Porto Rico v. Am. Tobacco
Co., 30 F.2d 234, 235 (2d Cir. 1929)
(addressing price discrimination in cigarette
sales in Puerto Rico); Checker Motors Corp.
Similarly, Plaintiff’s predatory and
discriminatory pricing claim under the
Robinson-Patman Act, which alleges that
8
v. Chrysler Corp., 283 F. Supp. 876, 881
(S.D.N.Y. 1968), aff’d, 405 F.2d 319 (2d
Cir. 1969) (discussing legality of rebate
program for taxicab purchases in the United
States and primarily in New York City).
These cases do not address the jurisdictional
bar created by the plain language of the
Clayton Act and Robinson-Patman Act
against suits involving foreign conduct.
15 U.S.C. § 6a. Thus, according to the plain
terms of the FTAIA, two types of foreign
commerce remain subject to the Sherman
Act: conduct involving import trade or
import commerce, and “conduct involving
nonimport trade or nonimport commerce
when that conduct (1) has a direct,
substantial, and foreseeable effect on import
trade or import commerce, and (2) the
Sherman Act claim arises out of that effect.”
In re Vitamin C Antitrust Litig., 904 F.
Supp. 2d 310, 317 (E.D.N.Y. 2012). Courts
refer to the first category as the “import
exception” and the second as the “domestic
effects exception.” See, e.g., id. at 316.
Accordingly, the foreign locus of
Plaintiff’s claims excludes them from the
Court’s subject-matter jurisdiction under the
Clayton Act and Robinson-Patman Act.
Those claims are therefore properly
dismissed.
a. Plaintiff’s Claims Do Not Fall Within the
Import Exception
2. Plaintiff’s Sherman Act Claims
The FTAIA provides that the Sherman
When assessing whether allegations fall
within the scope of the import exception to
the FTAIA, “[t]he relevant inquiry is
whether the conduct of the defendants – not
the plaintiffs – involves import trade or
commerce.” Kruman v. Christie’s Int’l
PLC, 284 F.3d 384, 395 (2d Cir. 2002)
abrogated on other grounds by F.
Hoffmann-La Roche Ltd. v. Empagran S.A.,
542 U.S. 155 (2004). Here, the First
Amended Complaint alleges foreign acts
conducted by one domestic and three foreign
Defendants that caused foreign injuries to
the Plaintiff and compromised its future
plans to import biosimilars of the Drugs to
the United States. To the extent the First
Amended Complaint makes reference to
conduct that allegedly occurred in the
United States, it does not allege that those
activities caused an injury in the United
Act
shall not apply to conduct involving
trade or commerce (other than
import trade or import commerce)
with foreign nations unless–
(1) such conduct has a direct,
substantial,
and
reasonably
foreseeable effect–
(A) on trade or commerce which
is not trade or commerce with
foreign nations, or on import
trade or import commerce with
foreign nations; or
(B) on export trade or export
commerce with foreign nations,
of a person engaged in such trade
or commerce in the United
States; and
(2) such effect gives rise to a claim
under the provisions of sections 1 to
7 of this title, other than this section.
9
States or involved U.S. import commerce.6
Rather,
Plaintiff
acknowledges
that
Defendants’ alleged conduct occurred
almost exclusively in Russia, but argues that
its allegations fall within the import
exception because the exception extends to
anticompetitive behavior that is “directed at
the U.S. import market.’” In re Vitamin C
Antitrust Litig., 904 F. Supp. 2d at 316–17.
Norte v. World Business Capital, Inc., 159
F. Supp. 3d 368, 383 (S.D.N.Y. 2015)
Here, Plaintiff has not alleged that
Defendants are involved in import
commerce, that Plaintiff is importing or has
ever imported any product into the United
States, or that import commerce for
biosimilars of the Drugs even exists in the
United States. Instead, Plaintiff argues that
its allegation that Defendants’ conduct has
hampered its anticipated participation in
future import commerce for biosimilars of
the Drugs is sufficient. But none of the
cases cited in Plaintiff’s brief support that
proposition, and in fact each case cited by
Plaintiff involved at least one party who was
engaged in actual import commerce. See,
e.g., Eskofot A/S v. E.I. Du Pont De
Nemours & Co., 872 F. Supp. 81, 83
(S.D.N.Y. 1995) (“[Plaintiff] has average
annual sales of approximately $75 million,
$12 million of which is derived from sales in
the United States.”); In re Vitamin C
Antitrust Litig., 904 F. Supp. 2d at 317
(“The sale contracts provided by the parties
show that defendants specifically contracted
for the delivery of vitamin C to locations
within the U.S.”).
But while Plaintiff is correct that the
import exception does not require “that the
defendants function as the physical
importers of goods,” id. (quoting Animal
Sci. Prod., Inc. v. China Minmetals Corp.,
654 F.3d 462, 470 (3d Cir. 2011), as
amended (Oct. 7, 2011)), a complaint must
still describe conduct that “target[ed] import
goods or services.” Animal Sci. Prod., Inc.,
654 F.3d at 470. Because the import
exception is “given a relatively strict
construction,” Carpet Grp. Int’l v. Oriental
Rug Importers Ass’n, Inc., 227 F.3d 62, 72
(3d Cir. 2000), overruled on other grounds
by Animal Sci. Prod., Inc., 654 F.3d 462,
courts require a close connection between a
defendant’s alleged conduct and the import
trade or import commerce at issue. The
import exception thus applies only to foreign
anticompetitive conduct “with an immediate
impact on U.S. markets.” Maricultura Del
But even if Plaintiff could allege that it
was in the business of importing its
biosimilars into the United States, which it
has not, Plaintiff has not alleged a sufficient
nexus between Defendants’ conduct and the
domestic effects of that conduct to satisfy a
“strict construction” of the FTAIA’s import
exception. That is, the relationship between
Defendants’ acts and their effect on U.S.
import commerce is too attenuated for
Defendants’ acts to be considered “directed
at” a U.S. import market. Rather, Plaintiff’s
allegations indicate that Defendants’ alleged
conduct was targeted at the domestic
Russian pharmaceutical market, not a U.S.
6
The First Amended Complaint alleges that
Defendants packaged Herceptin “worldwide” in a
manner that misrepresents how much patients need to
buy or use (FAC ¶ 216), but not that those
misrepresentations affected Plaintiff’s sales of its
biosimilars in the United States, since Plaintiff does
not sell drugs in the United States. The First
Amended Complaint also alleges that Defendants
reduced the number of wholesalers it uses for the
Drugs in order to limit the availability of samples
necessary for its rivals to obtain FDA approval for
competitive drugs, but as noted above, Plaintiff does
not allege that it has begun – or even contemplated –
clinical trials that require those samples or otherwise
attempted to obtain such samples from Defendants.
(See id. ¶¶ 181–91.)
10
import market, which is not enough to
invoke the FTAIA’s import exception.
for the purposes of the FTAIA must directly
affect those import markets, not merely
reflect an intention to affect them. See also
Animal Sci. Prod., Inc., 654 F.3d at 470
(“Defendants were allegedly involved only
in unlawfully setting extra-territorial
commission rates. Their actions did not
directly increase or reduce imports into the
United States.”) (quotation marks and
citation omitted); Turicentro, S.A. v. Am.
Airlines Inc., 303 F.3d 293, 303 (3d Cir.
2002) overruled on other grounds by Animal
Sci. Prod., Inc., 654 F.3d at 462 (holding
that the import exception was not met when
defendant’s extraterritorial “actions did not
directly increase or reduce imports into the
United States”). Here, the only market that
Defendants allegedly “targeted” was the
Russian market for the Drugs and
biosimilars for the Drugs.
The Second Circuit’s opinion in Kruman
is particularly instructive in this regard. In
Kruman, a class of plaintiffs alleged that the
defendants participated in a price-fixing
scheme for foreign auctions. 284 F.3d at
395. The Second Circuit held that the
import exception did not apply, even though
some of the items purchased at the foreign
auctions were eventually imported into the
United States, because “[t]he plaintiffs did
not describe conduct by the defendants that
was directed at an import market.” Id.
Noting that “the defendants’ conspiracy
appears to have been directed at controlling
the prices they charged for their services in
foreign auctions,” the Circuit concluded that
such conduct did not implicate the import
exception. Id. (emphasis added); see also id.
at 396 (“[T]he object of the conspiracy was
the price that the defendants charged for
their auction services, not any import market
for those goods.”). Here, as in Kruman, the
conduct alleged in the First Amended
Complaint was “directed at” manipulating
prices in a foreign country, Russia, and
would affect import trade and import
commerce into the United States only by a
series of indirect and attenuated steps.
Plaintiff’s reliance on Maricultura Del
Norte v. World Business Capital, Inc., 159
F. Supp. 3d 368, is equally unavailing. In
that case, a bank foreclosed upon the
plaintiffs’ fishing vessels after the plaintiffs,
who were bluefin tuna fishers, defaulted on
a loan. Id. at 372–73. The bank reassigned
the loan to the plaintiffs’ direct competitor
in the fishing industry, which refused to
provide the information required to release
the vessels in an attempt to eliminate its
competition. Id. On defendant’s motion to
dismiss, Judge McMahon held that, because
the plaintiffs alleged “an immediate impact
on the U.S. bluefin tuna market,” the
allegations fell within the import exception
to the FTAIA. Id. at 383. But unlike
Plaintiff here, the plaintiffs in Maricultura
Del Norte were importers who alleged that
they “were, are, and intend to continue being
sellers of bluefin tuna into the United States
market.” Maricultura Del Norte v. World
Bus. Capital, Inc., 14-cv-10143 (CM)
(S.D.N.Y. October 29, 2014), Doc. No. 1 at
¶ 393.
In fact, Judge McMahon
Plaintiff’s conclusory allegations that the
Defendants’ scheme “specifically targeted
U.S. import and domestic commerce” (FAC
¶¶ 95, 105) and “did in fact produce some
substantial effect on the interstate
commerce” (id. ¶ 224) are unfounded and do
not compel a different conclusion. Plaintiff
pleads no facts demonstrating such a
substantial effect and provides no authority
for the proposition that Defendants’ alleged
intentions provide a sufficient causal nexus
to satisfy the import exception. On the
contrary, Kruman clearly requires that action
“targeted” or “directed” at import markets
11
distinguished the facts of that case from
other cases where the alleged impact on U.S.
import commerce was, as here, attenuated
by multiple intermediate steps. Maricultura
Del Norte, 159 F. Supp. 3d at 383.
conduct caused a cognizable domestic
effect, and the other asking whether that
effect caused the plaintiff’s injury.” Lotes
Co. v. Hon Hai Precision Indus. Co., 753
F.3d 395, 414 (2d Cir. 2014).
Unlike the plaintiffs in Maricultura Del
Norte, and like the plaintiffs in Kruman,
Plaintiff here does not and cannot allege that
Defendants’ acts had a direct effect on
imports in the United States. Accordingly,
Plaintiff’s claims do not fall within the
import exception to the FTAIA.
Plaintiff
essentially
alleges
that
Defendants’ conduct in Russia harmed
Plaintiff in Russia, which in turn prevented
Plaintiff from entering the U.S. market,
which in turn will have the eventual
domestic effect of driving up the price of the
Drugs in the United States. For the reasons
discussed above, Plaintiff’s attenuated chain
of causation is insufficient to establish a
“direct,
substantial,
and
reasonably
foreseeable effect” under the FTAIA. But
even if it could be argued that Defendant’s
foreign conduct caused a cognizable
domestic effect, Plaintiff has not alleged that
this effect (i.e., increase in the price of the
Drugs in the United States) caused
Plaintiff’s injuries as required under the
second prong of the domestic effect test.
Rather, to the extent there is a causal
connection between Plaintiff’s injuries and
the alleged domestic effect of Defendants’
conduct, “the direction of causation runs the
wrong way.” Lotes Co., 753 F.3d at 414.
That is, Plaintiff’s injuries caused (or will
cause) the domestic effect, not vice versa.
b. Plaintiff’s Claims Do Not Fall Within the
Domestic Effects Exception
Although Plaintiff does not even argue
the point, the Court also finds that Plaintiff’s
claims fail to meet the FTAIA’s domestic
effects exception because any domestic
effect resulting from Defendant’s alleged
behavior did not “give rise to” Plaintiff’s
claim under the Sherman Act.7 Conduct
falls within the domestic effects exception
when (1) it has a “direct, substantial, and
reasonably foreseeable effect” on U.S.
domestic, import, or certain export
commerce, 15 U.S.C. § 6a(1), and (2) that
effect “gives rise to a claim under” the
Sherman Act, id. § 6a(2). The Supreme
Court has held that the statutory phrase
“gives rise to a claim” means “gives rise to
the plaintiff’s claim.” See Empagran S.A.,
542 U.S. at 173 (concluding that “Congress
would not have intended the FTAIA’s
exception to bring independently caused
foreign injury within the Sherman Act’s
reach”).
Thus, the domestic effects
exception requires two distinct inquiries,
“one asking whether the defendants’ foreign
The Second Circuit’s opinion in Lotes
helps to explain the operation of the
domestic effects exception in this case. Like
Plaintiff here, the plaintiff in Lotes alleged
that the defendants’ foreign anticompetitive
conduct excluded it from the U.S. market,
which would have the eventual effect of
reducing competition and driving up prices.
However, the Second Circuit held that the
domestic effects exception did not apply
because “those higher prices did not cause
[plaintiff’s] injury of being excluded from
the market for USB 3.0 connectors – that
injury flowed directly from the defendant’s
(See Opp’n at 22 (“the relevant inquiry is not the
domestic effects exception, but the import
exception”) (quoting Maricultura, 159 F. Supp. 3d at
316).)
7
12
exclusionary foreign conduct.” Id. at 414.
The Second Circuit thus clarified that the
exception applies only when the domestic
effects of a defendant’s anticompetitive
foreign conduct causes a plaintiff’s injury,
not when defendant’s conduct causes
plaintiff’s injury, which also results in
domestic effects.
C. Plaintiff Is Not Entitled to Injunctive
Relief
In an apparent last-ditch effort to secure
relief from the Court, Plaintiff makes the
conclusory argument that it is entitled to
injunctive relief under Section 16 of the
Clayton Act because, “[a]t the very least,
Plaintiff demonstrated threatened injury of
direct exclusion from the U.S. market.”
(Opp’n at 18.) Section 16 of the Clayton
Act confers a private right of action on
plaintiffs who allege “threatened loss or
damage by a violation of the antitrust laws.”
15 U.S.C. § 26. Section 16 injunctive relief
is therefore “characteristically available
even though the plaintiff has not yet suffered
actual injury.”
Zenith Radio Corp. v.
Hazeltine Research, Inc., 395 U.S. 100, 130
(1969) (citation omitted). Instead, to state a
claim for injunctive relief under Section 16,
a plaintiff must merely “demonstrate a
significant threat of injury from an
impending violation of the antitrust laws or
from a contemporary violation likely to
continue or recur.” Id.
Here, Plaintiff’s alleged injuries flow
from Defendants’ allegedly anticompetitive
foreign conduct, not the domestic effect of
that conduct, and is therefore the type of
“independently caused foreign injury” that
falls outside of the reach of the domestic
effects exception.
Id. at 414 (quoting
Empagran, 542 U.S. at 173.)
3. Plaintiff’s Donnelly Act Claims
Because Plaintiff’s claims are beyond
the reach of the Sherman Act, its state-law
claim under the Donnelly Act must also be
dismissed. The Donnelly Act does not reach
foreign conduct deliberately placed by
Congress “beyond the Sherman Act’s
reach.” In re Foreign Exch. Benchmark
Rates Antitrust Litig., 74 F. Supp. 3d 581,
601 (S.D.N.Y. 2015) (citing Global Reins.
Corp. U.S. Branch v. Equitas Ltd., 18
N.Y.3d 722, 735 (2012) (holding that a
claim barred by the FTAIA cannot be
brought under the Donnelly Act because,
among other reasons, “[t]he established
presumption is . . . against the extraterritorial
operation of New York law . . . and we do
not see how it could be overcome in a
situation where the analogue federal claim
would be barred by congressional
enactment”)). For the reasons set forth
above, Plaintiff’s claims are beyond the
reach of the Sherman Act. Accordingly,
Plaintiff’s Donnelly Act claim is also
properly dismissed.
But, for the reasons set forth above,
Plaintiff has not alleged a “significant threat
of injury from an impending violation of the
antitrust laws” since it has failed to allege
conduct that falls within the reach of U.S.
antitrust law. Because the foreign locus of
its claims excludes Plaintiff’s claims from
coverage under that law, there is no
“threatened loss of damage” from a violation
of those laws alleged here.
D. Plaintiff’s Request for Leave to Amend
Is Denied
Finally, the Court considers Plaintiff’s
request for leave to amend. (Opp’n 50.)
Although “Rule 15(a) of the Federal Rules
of Civil Procedure provides that leave to
amend ‘shall be freely given when justice so
requires,’ it is within the sound discretion of
13
the [Court] to grant or deny leave to
amend.” McCarty v. Dun & Bradstreet
Corp., 482 F.3d 184, 200 (2d Cir. 2007)
(quoting Fed. R. Civ. P. 15(a)). In addition,
the Second Circuit has consistently stated
that district courts may deny leave to amend
when plaintiffs request such leave in a
cursory sentence on the last page of an
opposition to a motion to dismiss, without
any justification or an accompanying
suggested amended pleading. See, e.g., City
of Pontiac, 752 F.3d at 188 (affirming denial
of leave to amend where plaintiffs already
had one opportunity to amend their
complaint and had “identified no additional
facts or legal theories” to support their
request to amend); Food Holdings Ltd. v.
Bank of Am. Corp., 423 F. App’x 73, 76 (2d
Cir. 2011) (affirming district court’s denial
of leave to amend where plaintiff requested
leave to amend “on the final page of their
brief in opposition to defendants’ motion to
dismiss, in boilerplate language and without
any explanation as to why leave to amend
was warranted”); Porat v. Lincoln Towers
Cmty. Ass’n, 464 F.3d 274, 275–76 (2d Cir.
2006).
(quoting Porat, 464 F.3d at 276)).
Moreover, this is not Plaintiff’s first attempt
at re-pleading in this action.
To the
contrary, on October 24, 2016, after the
parties had exchanged pre-motion letters and
the Court had held a pre-motion conference
concerning
Defendants’
contemplated
motions to dismiss (Doc. Nos. 22, 32),
Plaintiff sought and received leave to amend
for the purpose of addressing deficiencies in
the complaint that the Court and Defendants
addressed at some length. Notwithstanding
the benefit of Defendants’ pre-motion letter
and an extensive colloquy with the Court at
the pre-motion conference, in which these
very deficiencies were discussed (see Doc.
No. 33 at 12:15–31:14), Plaintiff’s amended
pleading still fails to allege facts sufficient
to withstand a motion to dismiss.
As Judge Lynch aptly noted when he
was on the district court, “[w]hile pleading
is not a game of skill in which one misstep
may be decisive to the outcome, neither is it
an interactive game in which plaintiffs file a
complaint, and then bat it back and forth
with the Court over a rhetorical net until a
viable complaint emerges.” In re Refco
Capital Mkts., Ltd. Brokerage Customer
Sec. Litig., Nos. 06-cv-643, 07-cv-8686, 07cv-8688 (GEL), 2008 WL 4962985, at *2
(S.D.N.Y. Nov. 20, 2008) (citations and
internal quotation marks omitted); see also
Ruotolo v. City of New York, 514 F.3d 184,
191 (2d Cir. 2008) (noting that courts can
deny leave to amend where there has been
“repeated failure to cure deficiencies by
amendments previously allowed” (quoting
Foman v. Davis, 371 U.S. 178, 182 (1962));
NRW, Inc. v. Bindra, No. 12-cv-8555 (RJS),
2015 WL 3763852, at *1 (S.D.N.Y. June 16,
2015) (“To grant leave to amend after a
plaintiff has had ample opportunity to
amend would be condoning a strategy
whereby plaintiffs hedge their bets . . . in the
hopes of having another bite at the
Here, in the final sentence of its
opposition to Defendants’ motions to
dismiss, Plaintiff, without any legal or other
support, states in a single sentence that
“[e]ven if, arguendo, the Court finds any
deficiencies in Plaintiff’s pleadings in the
Amended Complaint, Plaintiff should be
afforded the right to correct such
deficiencies.” (Opp’n 50.) Significantly,
Plaintiff offers no basis for its request for
leave to amend nor does it attach a proposed
amended complaint.
See Loreley Fin.
(Jersey) No. 3 Ltd. v. Wells Fargo Sec.,
LLC, 797 F.3d 160, 190 (2d Cir. 2015)
(noting that a court may deny leave to
amend, on notice grounds, “where the
request gives no clue as to how the
complaint’s defects would be cured”
14
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