Apotex Corp. v. Hospira Healthcare India Private Limited

Filing 124

OPINION AND ORDER: In short, Apotex's own allegations make clear that it cannot state a plausible claim for monopolization or attempted monopolization. In the final analysis, Apotex is essentially trying to recast a claim for breach of contract a contract that restricts competition, no less as an antitrust claim, which it may not do. See, e.g., In re Adderall, 754 F.3d at 135 ("The mere existence of a contractual duty to supply goods does not by itself give rise to an antitrust &# 039;duty to deal.'"); RxUSA Wholesale Inc. v. Alcon Labs., 391 F. App'x 59, 61 (2d Cir. 2010) (summary order) ("A refusal to deal with competitors does not constitute anticompetitive conduct in violation of Section 2 except in limited circumstances not present here."). Accordingly, Apotex's antitrust claims must be and are dismissed. That leaves two interrelated issues: amendment and jurisdiction. Apotex requests, in the event that its antitrust claims are dis missed, "a conference to address next steps, including amendment." Pl.'s Opp. 25. Construing this as a cursory request for leave to amend, the Court. concludes that leave to amend would be futile. See, e.g., Rincon v. Covidien, No. 1 6-CV-10033 ( JMF), 2017 WL 2242969, at *2 (S.D.N.Y. May 22, 2017) ("Although courts' should freely give leave when justice so requires, a court need not grant leave to amend when further amendment would be futile." (quoting Fed. R. Ci v. P. 15(a)(2)); see also Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir. 1993) (per curiam) ("Where it appears that granting leave to amend is unlikely to be productive...it is not an abuse of discretion to deny leave to amend." ). The defects in Apotex's antitrust claims are "substantive" and arise from Apotex's own allegations, not from inadequate or inartful pleading. See Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000). Moreover, Apotex has not po inted to additional facts it could allege that would cure these defects, and it did not do so previously when Hospira challenged its proposed amended allegations. See ECF Nos. 60-61. Accordingly, leave to amend the antitrust claims is denied. With out the prospect of antitrust claims, however, it is not clear that this case should remain in federal court. Dismissal of the antitrust claims leaves only state-law claims and Apotex, a Delaware corporation, destroyed diversity by adding Hospira, Inc., another Delaware corporation, as a Defendant in the Second Amended Complaint. Compare SAC, with ECF No. 1, and ECF No. 34. Under 28 U.S.C. § 1367, the Court has discretion to exercise supplemental jurisdiction over the remaining state-l aw claims, and must balance the "traditional 'values of judicial economy, convenience, fairness, and comity'" to determine whether to do so. Kolari v. New York-Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006) (quoting Carneg ie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988)). The balance ordinarily does not support exercising jurisdiction "if all federal claims have been dismissed at the pleading stage." Haynes v. Zaporowski, 521 F. App'x 24, 28 (2d Cir. 2013) (summary order) (internal quotation marks omitted). Indeed, the Second Circuit recently reiterated that, "in the usual case in which all federal law claims are eliminated before trial, the balance of factors to be considered under t he pendent jurisdiction doctrine judicial economy, convenience, fairness, and comity will point toward declining to exercise jurisdiction over the remaining state-law claims." Pension Ben. Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. R et. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712F. 3d 705, 727 (2d Cir. 2013) (internal quotation marks omitted); see, e.g., Francis v. Hartford Bd. of Educ., 760 F. App' x 34, 38 (2d Cir. 2019) (summary order). Unfortunately, the parties have no t adequately briefed the question of subject-matter jurisdiction in the absence of the antitrust claims. In its memorandum of law in support of its motion, Hospira indicated, with little elaboration, that "the Court properly may elect to retain jurisdiction...or decline to do so." Defs. Mem. 24 Apotex did not address the issue at all in its opposition brief, and Hospira provided no further discussion in its reply brief. Accordingly, the Court will reserve judgment on whether it should exercise supplemental jurisdiction over the remaining state-law claims (and, by extension, reach Hospira's argument with respect to the punitive damages claim) or dismiss the case without prejudice to refiling the state-law claims in state court pending further briefing. No later than January 17, 2020, each side shall submit a supplemental brief, not to exceed five pages, addressing the issue. The Clerk of Court is directed to terminate ECF. No. 84. SO ORDERED. (Signed by Judge Jesse M. Furman on 1/6/2020) (jca)

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1 8- C V- 4 9 0 3 (J M F)
O PI NI O N A N D O R D E R

J E S S E M. F U R M A N, U nit e d St at es Distri ct J u d g e:
Pl ai ntiff A p ot e x C or p. ( “ A p ot e x ”) bri n gs cl ai ms a g ai nst D ef e n d a nts H os pir a H e alt h c ar e
I n di a Pri v at e Lt d. ( “ H os pir a I n di a ”) a n d H os pir a, I n c. (t o g et h er wit h H os pir a I n di a, “ H os pir a ”),
s u c c ess ors of a n e ntit y t h at h a d a gr e e d wit h A p ot e x t o j oi ntl y d e v el o p a n d m ar k et c ert ai n g e n eri c
p h ar m a c e uti c al pr o d u cts f or s al e i n t h e U nit e d St at es. I n a n e arli er O pi ni o n a n d Or d er, t h e C o urt
gr a nt e d i n p art a n d d e ni e d i n p art a m oti o n t o dis miss A p ot e x ’s cl ai ms, a n d gr a nt e d A p ot e x l e a v e
t o fil e a s e c o n d a m e n d e d c o m pl ai nt. S e e A p ot e x C or p. v. H os pir a H e alt h c ar e I n di a Pri v at e Lt d.,
N o. 1 8- C V - 4 9 0 3 (J M F), 2 0 1 9 W L 3 0 6 6 3 2 8 ( S. D. N. Y. J ul y 1 2, 2 0 1 9). T h er e aft er, A p ot e x fil e d
t h e o p er ati v e S e c o n d A m e n d e d C o m pl ai nt, w hi c h i n cl u d es cl ai ms a g ai nst H os pir a f or br e a c h of
c o ntr a ct; u nf air c o m p etit i o n u n d er t h e Fl ori d a D e c e pti v e a n d U nf air Tr a d e Pr a cti c es A ct
( “ F D U T P A ”), Fl a. St at. A n n. § § 5 0 1. 2 0 1 et s e q. ; a n d m o n o p oli z ati o n a n d att e m pt e d
m o n o p oli z ati o n u n d er S e cti o n 2 of t h e S h er m a n A ntitr ust A ct, 1 5 U. S. C. § 2. E C F N o. 7 4
( “ S A C ”). H os pir a n o w m o v es, p urs u a nt t o R ul e 1 2( b)( 6) of t h e F e d er al R ul es of Ci vil
Pr o c e d ur e, t o dis miss A p ot e x’s a ntitr ust cl ai ms a n d its cl ai m f or p u niti v e d a m a g es f or br e a c h of
c o ntr a ct. E C F N os. 8 4- 8 5 . F or t h e r e as o ns t h at f oll o w, H os pir a’s m oti o n is G R A N T E D as t o t h e

a nt itr ust cl ai ms. T h e C o urt r es er v es j u d g m e nt o n t h e p u niti v e d a m a g es cl ai m p e n di n g f urt h er
bri efi n g o n s u bj e ct-m att er j uris di cti o n i n li g ht of t h e dis miss al of t h e a ntitr ust cl ai ms .
B A C K G R O U N D
T h e r el e v a nt b a c k gr o u n d is s et f ort h i n t h e C o urt’s pri or O pi ni o n a n d will b e s u m m ari z e d
o nl y bri efl y h er e. I n 2 0 0 3, A p ot e x e nt er e d i nt o a n a gr e e m e nt — t h e D e v el o p m e nt,
M a n uf a ct uri n g, S u p pl y a n d C o m m er ci ali z ati o n A gr e e m e nt ( “ A gr e e m e nt ”), s e e E C F N o. 3 9, at 58 — wit h H os pir a’s pr e d e c ess or , Or c hi d C h e mi c als a n d P h ar m a c e uti c als, Lt d. ( “ Or c hi d ”) . S A C
¶ 1. T h e A gr e e m e nt pr o vi d e d t h at Or c hi d w o ul d s u p pl y A p ot e x wit h c ert ai n dr u gs, i n cl u di n g
c ef a z oli n, c eftri a x o n e, c ef o xiti n, c ef e pi m e, a n d pi p er a cilli n -t a z o b a ct a m ( “ pi p/t a z ”). I d. I n
a d diti o n, t h e A gr e e m e nt pr o hi bit e d Or c hi d fr o m s u p pl yi n g t h e c o v er e d dr u gs t o A p ot e x’s
c o m p etit ors a n d fr o m dir e ctl y c o m p eti n g wit h A p ot e x i n t h e U nit e d St at es. I d. ¶ ¶ 4 7 - 5 0; s e e
als o i d. ¶ 5 3 ( d es cri bi n g a m e n d m e nt cr e ati n g a n e x c e pti o n f or c ert ai n c ust o m ers) . O n M ar c h 2 3,
2 0 1 0, H os pi r a s u c c e e d e d Or c hi d t hr o u g h a c o ntr a ct u al n o v ati o n ( “ N o v ati o n ”), s e e E C F N o. 3 9,
at 1 1 - 1 3, a n d t h us b e c a m e s u bj e ct t o t h e A gr e e m e nt’s e x cl usi v e s u p pl y pr o visi o n a n d ot h er
r estri cti o ns o n c o m p etiti o n wit h A p ot e x, s e e S A C ¶ ¶ 5 8- 6 4.
O n J u n e 1, 2 0 1 8, A p ot e x s u e d H os pir a I n di a f or br e a c h of t h e A gr e e m e nt a n d N o v ati o n
a n d a v ari et y of r el at e d cl ai ms . S e e E C F N o. 1. O n J ul y 1 2, 2 0 1 9, t h e C o urt gr a nt e d i n p art a n d
d e ni e d i n p art a m oti o n t o dis miss t h es e cl ai ms. E C F N o. 7 0. I n bri ef, t h e C o urt r ul e d t h at
A p ot e x’s t h r e e fr a u d-b as e d cl ai ms a n d cl ai ms f or u nf air c o m p etiti o n, br e a c h of t h e i m pli e d
c o v e n a nt of g o o d f ait h a n d f air d e ali n g , t orti o us i nt erf er e n c e, a n d u nj ust e nri c h m e nt f ail e d as a
m att er of l a w , b ut its cl ai m u n d er t h e F D U T P A di d n ot. S e e 2 0 1 9 W L 3 0 6 6 3 2 8, at * 4- 8. I n
a d diti o n, t h e C o urt r ul e d t h at A p ot e x m a y s e e k o nl y b e n efit - of-t h e- b ar g ai n d a m a g es, att or n e y’s
f e es, a n d c osts f or its F D U T P A cl ai m; t h at A p ot e x is b o u n d b y t h e A gr e e m e nt a n d N o v ati o n’s

2

li mit ati o n o n d a m a g es; a n d t h at it w as a m bi g u o us w h et h er t h e li mit ati o n o n d a m a g es pr e cl u d e d
l ost pr ofit d a m a g es f or A p ot e x’s c o ntr a ct cl ai m. I d. at * 8 - 9. M ost r el e v a nt f or pr es e nt p ur p os es,
t h e C o urt r es er v e d j u d g m e nt o n w h et h er A p ot e x a d e q u at el y pl e a d e d a cl ai m f or p u niti v e
d a m a g es f or br e a c h of c o ntr a ct a n d w h et h er a n y s u c h cl ai m w a s b arr e d b y t h e li mit ati o n o n
d a m a g es, se e i d. at * 8 n. 5, a n d gr a nt e d A p ot e x l e a v e t o fil e a s e c o n d a m e n d e d c o m pl ai nt a d di n g
“ n e w all e g ati o ns a n d cl ai ms . . . r e g ar di n g m o n o p oli z ati o n a n d att e m pt e d m o n o p oli z ati o n, ” i d. at
* 1 0. T h e r e aft er, A p ot e x fil e d t h e S e c o n d A m e n d e d C o m pl ai nt, a d di n g H os pir a, I n c. as a n e w
D ef e n d a nt a n d all e gi n g cl ai ms u n d er t h e S h er m a n A ntitr ust A ct. S e e S A C ¶ ¶ 1 6 9 - 1 9 2.
T h e S e c o n d A m e n d e d C o m pl ai nt all e g es t h at H os pir a m o n o p oli z e d t h e U. S. m ar k et f or
c ef e pi m e, a t y p e of c e p h al os p ori n a nti bi oti c, a n d att e m pt e d t o m o n o p oli z e t h e U. S. m ar k et f or
s e v er al ot h er dr u gs. S e e S A C ¶ ¶ 1 6 9- 1 9 2. A p ot e x all e g es t h at H os pir a di d s o b y br e a c hi n g its
o bli g ati o ns u n d er t h e p arti es’ a gr e e m e nt t o a ct as A p ot e x’s e x cl usi v e s u p pli er f or t h es e dr u gs,
a n d b y s elli n g its o w n v ersi o n of t h e dr u gs t o A p ot e x’s c o m p etit ors a n d dir e ctl y t o A p ot e x’s
c ust o m ers . S e e i d. ¶ ¶ 1 7 6, 1 8 4. F or e x a m pl e, H os pir a all e g e dl y c ut off A p ot e x’s s u p pl y of
c ef e pi m e a n d m a n uf a ct ur e d a n d s ol d its o w n br a n d- n a m e v ersi o n of t h e dr u g, M a xi pi m e, t o
A p ot e x’s c o m p etit ors a n d c ust o m ers . I d. at ¶ ¶ 1 7 6, 1 8 0. H os pir a all e g e dl y us e d “ c o nfi d e nti al
a v er a g e pri c e ” i nf or m ati o n o bt ai n e d t hr o u g h t h e p arti es’ p art n ers hi p t o s ell M a xi pi m e “ o n p ar
wit h or n e ar A p ot e x’s c o ntr a ct pri c e. ” I d. at ¶ 1 7 6( d).

T hr o u g h t his all e g e d s c h e m e, H os pir a’s

s h ar e of t h e c ef e pi m e m ar k et “s o ar e d fr o m n e gli gi bl e t o a m aj orit y m ar k et s h ar e, ” r e a c hi n g
5 6. 5 8 % i n A u g ust 2 0 1 6. I d. at ¶ ¶ 1 7 3, 1 7 8. I n a d diti o n, H os pir a ulti m at el y cl os e d “t h e o nl y
f a cilit y at w hi c h it m a n uf a ct ur es Pr o d u cts f or A p ot e x, ” k n o w n as t h e I K K T f a cilit y, l e a vi n g
A p ot e x e ntir el y “ u n a bl e t o c o m p et e. ” I d. at ¶ ¶ 8, 2 0 3. H os pir a all e g e dl y us e d t h e s a m e s c h e m e
i n a n att e m pt t o m o n o p oli z e t h e U. S. m ar k et f or ot h er dr u gs — n a m el y, c eftri a x o n e , c ef a z oli n ,

3

c ef o xiti n, a n d pi p/t a z. S e e i d. at ¶ ¶ 1, 1 8 9- 9 1. H os pir a all e g e dl y g ai n e d 4 3. 7 5 % of t h e m ar k et
f or c eftri a x on e “ as of J a n u ar y 2 0 1 7, ” a n d 3 0. 7 6 % of t h e m ar k et f or c ef a z oli n “ as of J a n u ar y
2 0 1 6. ” I d. ¶ 1 9 1. (It is u n cl e ar w h at, if a n y, m ar k et s h ar e H os pir a g ai n e d f or t h e ot h er dr u gs.)
O n t h e b asis of t h es e all e g ati o ns, A p ot e x n o w s e e ks, i nt er ali a, tr e bl e d a m a g es, pl us c osts a n d
att or n e y’s f e es, f or t h e all e g e d a ntitr ust vi ol ati o ns a n d p u niti v e d a m a g es f or t h e all e g e d br e a c h of
c o ntr a ct. S e e S A C at Pr a y er f or R eli ef ¶ 1( a), ( c). 1
L E G A L S T A N D A R DS
I n e v al u ati n g a m oti o n t o dis miss p urs u a nt t o R ul e 1 2( b)( 6), a c o urt m ust a c c e pt all f a cts
s et f ort h i n t h e c o m pl ai nt as tr u e a n d dr a w all r e as o n a bl e i nf er e n c es i n t h e pl ai ntiff’s f a v or. S e e ,
e. g. , K as h ef v. B N P P ari b as S. A. , 9 2 5 F. 3 d 5 3, 5 8 ( 2 d Cir. 2 0 1 9). A cl ai m will s ur vi v e a R ul e
1 2( b)( 6) m oti o n, h o w e v er, o nl y if t h e pl ai ntiff all e g es f a cts s uffi ci e nt “t o st at e a cl ai m t o r eli ef
t h at is pl a usi bl e o n its f a c e. ” B ell Atl a nti c C or p. v. T w o m bl y , 5 5 0 U. S. 5 4 4, 5 7 0 ( 2 0 0 7). A cl ai m
is f a ci all y pl a usi bl e “ w h e n t h e pl ai ntiff pl e a ds f a ct u al c o nt e nt t h at allo ws t h e c o urt t o dr a w t h e
r e as o n a bl e i nf er e n c e t h at t h e d ef e n d a nt is li a bl e f or t h e mis c o n d u ct all e g e d. ” As h cr oft v. I q b al ,
5 5 6 U. S. 6 6 2, 6 7 8 ( 2 0 0 9) ( citi n g T w o m bl y , 5 5 0 U. S. at 5 5 6). A pl ai ntiff m ust s h o w “ m or e t h a n a
s h e er p ossi bilit y t h at a d ef e n d a nt h as a ct e d u nl a wf ull y, ” i d., a n d c a n n ot r el y o n m er e “l a b els a n d
c o n cl usi o ns ” t o s u p p ort a cl ai m, T w o m bl y , 5 5 0 U. S. at 5 5 5. If t h e pl ai ntiff’s pl e a di n gs “ h a v e n ot
n u d g e d [ his or h er] cl ai ms a cr oss t h e li n e fr o m c o n c ei v a bl e t o pl a usi bl e, [t h e] c o m pl ai nt m us t b e
dis miss e d. ” T w o m bl y , 5 5 0 U. S. at 5 7 0.

1

A p ot e x s e e ks p u niti v e d a m a g es s ol el y i n c o n n e cti o n wit h its c o ntr a ct cl ai ms. S e e E C F
N o. 8 7, at 2 n. 2. T h us, t h e C o urt n e e d n ot a n d d o es n ot a d dr ess H os pir a’s m oti o n t o t h e e xt e nt
t h at it s e e ks dis miss al of a cl ai m f or p u niti v e d a m a g es u n d er t h e F D U T P A.

4

DI S C U S SI O N
T h e C o urt b e gi ns wit h t h e m oti o n t o dis miss A p ot e x’s a ntitr ust cl ai ms, its s ol e f e d er al
cl ai ms. S e cti o n 2 of t h e S h er m a n A ntitr ust A ct pr o hi bits “ m o n o p oli z[i n g], or att e m pt[i n g] t o
m o n o p oli z e . . . a n y p art of t h e tr a d e or c o m m er c e a m o n g t h e s e v er al St at es. ” 1 5 U. S. C. § 2.

A

cl ai m of m o n o p oli z ati o n “r e q uir es, i n a d diti o n t o t h e p oss essi o n of m o n o p ol y p o w er i n t h e
r el e v a nt m ar k et, t h e willf ul a c q uisiti o n or m ai nt e n a n c e of t h at p o w er as disti n g uis h e d fr o m
gr o wt h or d e v el o p m e nt as a c o ns e q u e n c e of a s u p eri or pr o d u ct, b usi n ess a c u m e n, or hist ori c
a c ci d e nt. ” I n r e A d d er all X R A ntitr ust Liti g. , 7 5 4 F. 3 d 1 2 8, 1 3 3 ( 2 d Cir. 2 0 1 4) (i nt er n al
q u ot ati o n m ar ks o mitt e d) ( q u oti n g V eriz o n C o m m c’ ns I n c. v. L a w Offi c es of C urtis V. Tri n k o,
L L P , 5 4 0 U. S. 3 9 8, 4 0 7 ( 2 0 0 4)). “ T o st at e a n att e m pt e d m o n o p oli z ati o n cl ai m, a pl ai ntiff m ust
est a blis h ‘( 1) t h at t h e d ef e n d a nt h as e n g a g e d i n pr e d at or y or a nti c o m p etiti v e c o n d u ct wit h ( 2) a
s p e cifi c i nt e nt t o m o n o p oli z e a n d ( 3) a d a n g er o us pr o b a bilit y of a c hi e vi n g m o n o p ol y p o w er.’ ”
P e psi C o., I n c. v. C o c a- C ol a C o. , 3 1 5 F. 3 d 1 0 1, 1 0 5 ( 2 d Cir. 2 0 0 2) ( p er c uri a m) ( q u oti n g
S p e ctr u m S p orts, I n c. v. M c Q uill a n , 5 0 6 U. S. 4 4 7, 4 5 6 ( 1 9 9 3)). T h e t w o cl ai ms “ ar e
s u bst a nti all y i d e nti c al, wit h t h e e x c e pti o n t h at att e m pt e d m o n o p oli z ati o n r e q uir es a s h o wi n g of
s p e cifi c i nt e nt t o m o n o p oli z e. ” N e w Y or k v. A ct a vis, P L C , N o. 1 4-C V - 7 4 7 3 ( R W S), 2 0 1 4 W L
7 0 1 5 1 9 8, at * 3 5 ( S. D. N. Y. D e c. 1 1, 2 0 1 4), aff’ d s u b n o m. N e w Y or k e x r el. S c h n ei d er m a n v.
A ct a vis P L C , 7 8 7 F. 3 d 6 3 8 ( 2 d Cir. 2 0 1 5).
H os pir a ar g u es t h at A p ot e x’s cl ai ms f ail f or at l e ast t w o r e as o ns: first, b e c a us e A p ot e x
f ails t o m a k e a s h o wi n g of “ a nti c o m p etiti v e c o n d u ct, ” E C F N o. 8 5 ( “ D efs.’ M e m. ”), at 1 0- 1 4 ;

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a n d s e c o n d, b e c a us e A p ot e x f ails t o pl a usi bl y all e g e t h at H os pir a a ct u all y m o n o p oli z e d or
d a n g er o usl y t hr e at e n e d t o d o s o, i d. 1 9- 2 2. 2 T h e C o urt a gr e es o n b ot h fr o nts.
A. A nti c o m p etiti v e C o n d u ct
A cl ai m u n d er t h e S h er m a n A ct m ust all e g e a nti c o m p etiti v e c o n d u ct, as f e d er al a ntitr ust
l a ws w er e “ e n a ct e d f or t h e pr ot e cti o n of c o m p etiti o n n ot c o m p etit ors. ” Br u ns wi c k C or p. v.
P u e bl o B o wl- O- M at, I n c. , 4 2 9 U. S. 4 7 7, 4 8 8 ( 1 9 7 7) (i nt er n al q u ot ati o n m ar ks o mitt e d).
“[ A] nti c o m p etiti v e c o n d u ct is c o n d u ct wit h o ut a l e g iti m at e b usi n ess p ur p os e t h at m a k es s e ns e
o nl y b e c a us e it eli mi n at es c o m p etiti o n. ” I n r e A d d er all, 7 5 4 F. 3 d at 1 3 3 (i nt er n al q u ot ati o n
m ar ks o mitt e d) . A “ pr ot ot y pi c al v ali d b usi n ess p ur p os e ” is e x p a n di n g i nt o a n e w m ar k et t o
c o m p et e o n t h e b asis of i n cr e as e d effi ci e n c y. S e e P ort D o c k & St o n e C or p. v. Ol d c astl e
N ort h e ast, I n c. , 5 0 7 F. 3 d 1 1 7, 1 2 4- 2 5 ( 2 d Cir. 2 0 0 7) ( h ol di n g t h at a m a n uf a ct ur er ’s br e a c h of a
distri b ut ors hi p a gr e e m e nt w as n ot a nti c o m p etiti v e b e c a us e t h e m a n uf a ct ur er “ e x p e ct e d t o
p erf or m t h e s e c o n d l e v el s er vi c e m or e effi ci e ntl y t h a n t h e ol d tr a di n g p art n ers ”).

C o n d u ct

u n d ert a k e n f or s u c h a p ur p os e c a n n ot , as a m att er of l a w, b e t h e b asis f or a n a ntitr ust cl ai m .
I n t his c as e, A p ot e x’s o w n all e g ati o ns r e v e al t h at H os pir a’s c o n d u ct w as u n d ert a k e n f or
l e giti m at e, pr o- c o m p etiti v e p ur p os es. T h e pri m ar y c o n d u ct all e g e d i n t h e S e c o n d Am e n d e d
C o m pl ai nt is H os pir a ’s d e cisi o n t o br e a c h t h e e x cl usi v e s u p pli er a gr e e m e nt wit h A p ot e x i n or d er
t o c o m p et e dir e ctl y wit h A p ot e x a n d t o s u p pl y A p ot ex’s c o m p etit ors. S e e, e. g. , S A C ¶ ¶ 8 4
( “ H os pir a h as s ol d or ot h er wis e s u p pli e d t o t hir d p arti es i n t h e T errit or y c ert ai n dr u gs t h at

2

H os pir a als o c o nt e n ds t h at A p ot e x f ails t o all e g e a ntitr ust i nj ur y a n d, b y e xt e nsi o n,
a ntitr ust st a n di n g. S e e D efs.’ M e m. 8- 1 0; E C F N o. 8 8 ( “ D efs.’ R e pl y ”), at 2- 3 & 3 n. 5. D es pit e
its n a m e, a ntitr ust st a n di n g is “ n ot j uris di cti o n al i n n at ur e b ut r at h er r el at es t o t h e m erits of a
cl ai m. ” Bili ns ki v. K eit h H ari n g F o u n d., I n c. , 9 6 F. S u p p. 3 d 3 5, 4 3 n. 7 ( S. D. N. Y. 2 0 1 5).
A c c or di n gl y, t h e C o urt n e e d n ot a n d d o es n ot a d dr ess it h er e. S e e, e. g. , Bi o c a d J S C v. F.
H off m a n n- L a R o c h e, Lt d. , 9 4 2 F. 3 d 8 8, 9 4 n. 5 ( 2 d Cir. 2 0 1 9).

6

dir e ctl y c o m p et e wit h A p ot e x’s s al e of t h e Pr o d u cts. ”), 8 8 ( d es cri bi n g “ H os pir a’s d eli b er at e
d e cisi o n t o di v ert s u p pl y of Pr o d u cts t o its o w n us e i n c o m p etiti o n wit h A p ot e x ”) ; s e e als o i d. ¶ 2
(all e gi n g t h at “ H os pir a di d c o m p et e wit h A p ot e x i n t h e U nit e d St at es p h ar m a c e uti c als m ar k et ”
pri or t o t h e p arti es’ a gr e e m e nt). T h at d e cisi o n is c o nsist e nt wit h c o m p etiti v e b usi n ess b e h a vi or:
“ Li k e a n y s ell er of a pr o d u ct, ” H os pir a “ w o ul d pr ef er m ulti pl e c o m p eti n g b u y ers u nl ess a n
e x cl usi v e distri b ut ors hi p arr a n g e m e nt pr o vi d es ot h er b e n efits. ” E & L C o ns ulti n g, Lt d. v. D o m a n
I n d us. Lt d., 4 7 2 F. 3 d 2 3, 3 0 ( 2 d Cir. 2 0 0 6). E n g a gi n g i n c o m p eti ti o n w as es p e ci all y r ati o n al
gi v e n H os pir a’s c o m p etiti v e a d v a nt a g e o v er A p ot e x. A p ot e x all e g es t h at “ m a n y ” fir ms pr o d u c e
“ virt u all y i d e nti c al dr u gs , ” w hi c h m e a ns t h at fir ms m ust c o m p et e o n f a ct ors li k e “ c o nsist e n c y of
s u p pl y. ” I d. ¶ ¶ 3 9- 4 0 . H os pir a, as a m a n uf a ct ur er, h as dir e ct a c c ess t o a c o nsist e nt s u p pl y of
pr o d u cts, u nli k e a r es ell er li k e A p ot e x. H os pir a’s d e cisi o n t o c a pit ali z e o n t his a d v a nt a g e is n ot
t h e t y p e of a nti c o mp etiti v e c o n d u ct pr o hi bit e d b y f e d er al a ntitr ust l a ws. S e e P ort D o c k , 5 0 7 F. 3 d
at 1 2 5 ( “[ A] c o m pl ai nt pl e a di n g t h at a d ef e n d a nt e x p a n d e d v erti c all y a n d as a r es ult, d e ci d e d t o
dis c o nti n u e d oi n g b usi n ess wit h its erst w hil e tr a di n g p art n ers at t h e n e xt l e v el d o w n, d o es n ot
pl e a d a n a cti o n a bl e r ef us al t o d e al. ”).
I n ar g ui n g ot h er wis e, A p ot e x a ss erts t h at “t h er e is n o l e giti m at e b usi n ess j ustifi c ati o n f or
a c a m p ai g n t o wit h h ol d irr e pl a c e a bl e s u p pl y fr o m a c o m p etit or, mis a p pr o pri at e its c o nfi d e nti al
i nf or m atio n t o t ar g et c ust o m ers a n d s ull y t h e c o m p etit or’s r e p ut ati o n s o c ust o m ers will a b a n d o n
it. ” E C F N o. 8 7 ( “ Pl.’s O p p. ”), at 1 4. I n s u p p ort, A p ot e x r eli es h e a vil y o n Ass o ci at e d R a di o
S er vi c e C o. v. P a g e Air w a ys, I n c. , 6 2 4 F. 2 d 1 3 4 2 ( 5t h Cir. 1 9 8 0), f or t h e pr o p ositi o n t h at “s o m e
u nf air b usi n ess pr a cti c es c a n b e e x cl usi o n ar y. ” Pl. ’s O p p. 1 5 ( q u oti n g P a g e Air w a ys , I n c., 6 2 4
F. 2 d at 1 3 5 4). B ut as t h e Fift h Cir c uit h as st at e d m or e r e c e ntl y, t h e “ disti n cti o n b et w e e n u nf air
c o n d u ct a n d a nti c o m p etiti v e c o n d u ct is criti c al t o m ai nt ai n b e c a us e t h e a ntitr ust l a ws ‘ d o n ot

7

cr e at e a f e d er al l a w of u nf air c o m p etiti o n.’ ” R etr a ct a bl e T e c hs., I n c. v. B e ct o n Di c ki ns o n & C o. ,
8 4 2 F. 3 d 8 8 3, 8 9 2 ( 5t h Cir. 2 0 1 6) ( q u oti n g Br o o k e Gr p. Lt d. v. Br o w n & Willi a ms o n T o b a c c o
C or p. , 5 0 9 U. S. 2 0 9, 2 2 5 ( 1 9 9 3) (n oti n g t h at “ Br o o k e Gr p. , of c o urs e, p ost d at es P a g e Air w a ys ”).
T h e c o n d u ct t h at A p ot e x all e g es m a y w el l gi v e ris e t o cl ai ms f or u nf air c o m p etiti o n a n d br e a c h
of c o ntr a ct, b ut it d o es n ot gi v e ris e t o a n a ntitr ust cl ai m . S e e L a. W h ol es al e Dr u g C o. v. S hir e
L L C , 9 2 9 F. S u p p. 2 d 2 5 6, 2 6 2 ( S. D. N. Y. 2 0 1 3) (“[ N] ot e v er y s h ar p -el b o w e d b usi n ess pr a cti c e
— t h o u g h p ot e nti all y wr o n gf ul as a br e a c h of c o ntr a ct or e v e n fr a u d — n e c ess aril y a m o u nts t o
a n a ntitr ust vi ol ati o n. ”) ; s e e als o, e. g., H u nt v. M o bil Oil C or p. , 4 6 5 F. S u p p. 1 9 5, 2 3 5 n. 1 0 2
( S. D. N. Y. 1 9 7 8) ( “[ T] h e a ntitr ust l a ws ar e n ot pr o p erl y i n v o k e d e v er y ti m e a p art y t o a c o ntr a ct
cl ai ms i nj ur y b e c a us e of a n ot h er p art y’s all e g e d n o n p erf or m a n c e of t h e a gr e e m e nt. ”) , aff’ d , 6 1 0
F. 2 d 8 0 6 ( 2 d Cir. 1 9 7 9).
Citi n g As p e n S kii n g C o. v. As p e n Hi g hl a n ds S kii n g C or p. , 4 7 2 U. S. 5 8 5 ( 1 9 8 5), A p ot e x
als o ar g u es t h at H os pir a’s c o n d u ct c o nstit ut es a n a nti c o m p etiti v e r ef us al t o d e al. Pl. ’s O p p. 1 61 9. Pri v at e b usi n ess es , h o w e v er, e nj o y a “l o n g r e c o g ni z e d ri g ht ” t o e x er cis e “i n d e p e n d e nt
dis cr eti o n as t o t h e p arti es wit h w h o m [t h e y] will d e al. ” I n r e A d d er all, 7 5 4 F. 3 d at 1 3 4 ( q u oti n g
U nit e d St at es v. C ol g at e & C o. , 2 5 0 U. S. 3 0 0, 3 0 7 ( 1 9 1 9)). As p e n S kii n g est a blis h e d a “li mit e d ”
e x c e pti o n t o t h at pri n ci pl e f or sit u ati o ns i n w hi c h t h e “ u nil at er al t er mi n ati o n of a v ol u nt ar y ( a n d
t h us pr es u m a bl y pr ofit a bl e) c o urs e of d e ali n g s u g g est e d a willi n g n ess t o f ors a k e s h ort-t er m
pr ofits t o a c hi e v e a n a nti c o m p etiti v e e n d. ” Tri n k o , 5 4 0 U. S. at 4 0 9 ( e m p h asis o mitt e d); s e e
C h ar y c h v. Siri us w ar e, I n c. , N o. 1 7-C V - 4 6 8 (J S) ( G R B), 2 0 1 8 W L 4 8 7 0 9 0 6, at * 7 ( E. D. N. Y.
J ul y 3 0, 2 0 1 8) ( n oti n g t h at t h e As p e n S kii n g e x c e pti o n is “ n arr o w ”). I n t h at c as e , t h e S u pr e m e
C o urt u p h el d a n a ntitr ust v er di ct a g ai nst a s ki r es ort o p er at or t h at h a d dis c o nti n u e d a
l o n gst a n di n g a gr e e m e nt wit h a s m all er ri v al t o j oi ntl y s ell “ all -As p e n ” r es ort a c c ess ti c k ets. 4 7 2

8

U. S. at 6 0 4, 6 1 1. T h e C o urt n ot e d t h at s u c h a d e cisi o n w as “ n ot n e c ess aril y a nti c o m p etiti v e, ”
b ut f o u n d t h at e vi d e n c e i n t h e r e c or d s u p p ort e d t h e j ur y’s c o n cl usi o n t h at “t h er e w er e n o v ali d
b usi n ess r e as o ns f or t h e r ef us al ” t o d e al e x c e pt t o eli mi n at e c o m p etiti o n. I d. at 6 0 4, 6 1 0- 1 1.
B e c a us e t h e l ar g er s ki r es ort’s d e cisi o n “ w as n ot m oti v at e d b y effi ci e n c y c o n c er ns, ” t h e C o urt
c o n cl u d e d t h at t h e r es ort w as “s a crifi ci n g s h ort-r u n b e n efits a n d c o ns u m er g o o d will i n e x c h a n g e
f or a p er c ei v e d l o ng- r u n i m p a ct o n its s m all er ri v al. ” I d. at 6 1 0- 1 1.
T w o k e y el e m e nts of As p e n S kii n g ar e a bs e nt fr o m t his c as e. First, As p e n S kii n g ’s
h ol di n g w as dri v e n b y t h e C o urt’s c o n cl usi o n t h at t h e d ef e n d a nt h a d dis c o nti n u e d its pri or,
“ pr es u m a bl y pr ofit a bl e ” c o urs e of d e ali n g i n a n eff ort “t o f ors a k e s h ort-t er m pr ofits t o a c hi e v e a n
a nti c o m p etiti v e e n d. ” Tri n k o , 5 4 0 U. S. at 4 0 9; s e e As p e n S kii n g, 4 7 2 U. S. at 6 1 0- 1 1. H er e, b y
c o ntr ast, A p ot e x affir m ati v el y all e g es t h at H os pir a br e a c h e d its c o ntr a ct u al o bli g ati o ns i n p urs uit
of c o m p etiti v e pr ofits. S e e S A C ¶ 4 ( all e gi n g t h at H os pir a w as “ usi n g its br e a c h es of t h e
A gr e e m e nt as a m e a ns t o c a pt ur e f or its elf all of t h e v er y pr ofits t h e p arti es h a d a gr e e d t o
s h ar e ”). A p art y d oes n ot — at l e ast as a m att er of a ntitr ust l a w

— h a v e a d ut y t o d e al wit h a

c o m p etit or w h e n, as h er e, gr e at er pr ofits ar e a v ail a bl e t hr o u g h dir e ct c o m p etiti o n. S e e , e. g., I n r e
A d d er all , 7 5 4 F. 3 d at 1 3 1, 1 3 4-3 5 ( dis missi n g a ntitr ust cl ai ms b as e d o n a dr u g m a k er’s br e a c h of
“ u n pr ofit a bl e ” a gr e e m e nts t o “ gi v e its c o m p etit ors b ot h t h e ri g hts a n d t h e s u p pli es n e c ess ar y t o
p arti ci p at e i n t h e m ar k et ”).
S e c o n d, t h e As p e n S kii n g d e cisi o n r eli e d o n t h e f a ct t h at t h e d ef e n d a nt c o ul d us e its
si g nifi c a nt m ar k et p o w er t o e x cl u d e its s m all er ri v al. S e e I n r e A d d er all, 7 5 4 F. 3 d at 1 3 4 ( n oti n g
t h at As p e n S kii n g h el d “t h at a b usi n ess wit h m ar k et p o w er

m a y b e s u bj e ct t o a d ut y t o d e al wit h a

s m all er c o m p etit or ” ( e m p h asis a d d e d)). B e c a us e t h e d ef e n d a nt i n As p e n S kii n g c o ntr oll e d t hr e e
of t h e f o ur r es orts i n t h e ar e a, t h e d ef e n d a nt w as a bl e t o s h ar pl y c ur b b usi n ess f or its c o m p etit or

9

b y s elli n g a “ 3 -ar e a ” ti c k et t o its o w n r es orts w hil e d e n yi n g t h e s m all er o p er at or a c c ess, e v e n at
r et ail pri c e. As p e n S kii n g , 4 7 2 U. S. at 6 1 0. H er e, b y c o ntr ast, u ntil H os pir a all e g e dl y br e a c h e d
t h e p arti es’ c o ntr a ct, H os pir a h a d al m ost n o pr es e n c e i n t h e m ar k et f or c ef e pi m e, as H os pir a w as
c o ntr a ct u all y b arr e d fr o m c o m p eti n g wit h A p ot e x a n d H os pir a’s br a n d dr u g w as s u bj e ct t o
“ g e n eri c s u bstit uti o n l a ws, ” w hi c h e ns ur e d t h at “s al es . . . w er e n e gli gi bl e. ” S A C ¶ ¶ 6 3, 9 3. I n
t h es e c o n diti o ns, H os pir a’s c o n d u ct d o es n ot s u g g est a n anti c o m p etiti v e m oti v e . It s u g g ests t h e
o p p osit e: t h at H os pir a s o u g ht t o, a n d di d, p arti ci p at e i n t h e m ar k et as a c o m p etit or.
Fi n all y, A p ot e x ar g u es t h at , “[i] n t his Cir c uit, t h e b ar f or s h o wi n g t h at a p art y h as
e n g a g e d i n u nl a wf ul a nti c o m p etiti v e c o n d u ct ‘is a l o w o n e.’ ” Pl. ’s O p p. 1 4 ( q u oti n g
Pr o v e p h ar m, I n c. v. A k or n, I n c. , N o. 1 7-C V - 7 0 8 7 ( SJ F) ( A K T), 2 0 1 9 W L 2 4 4 3 1 8 5, at * 1 0
( E. D. N. Y. J u n e 1 1, 2 0 1 9)). T h at m a y b e tr u e, b ut it d o es n ot s al va g e A p ot e x’s cl ai ms b e c a us e
A p ot e x “f ails t o all e g e a n y f a c ts r e g ar di n g m o n o p olisti c c o n d u ct — as o p p os e d t o s el e cti v e
a g gr essi v e c o n d u ct a g ai nst a ri v al. ” F ull Cir cl e U nit e d, L L C v. S k e e - B all, I n c., N os. 1 1-C V 5 4 7 6 ( L B), 1 1- C V -6 2 7 7 ( L B), 2 0 1 4 W L 1 2 8 2 9 1 9 5, at * 1 1 ( E. D. N. Y. M a y 1 3, 2 0 1 4) ( “ T h e
gr a v a m e n of [ a n a nti tr ust] off e ns e is n ot t h e e nl ar g e m e nt of t h e d ef e n d a nt’s m ar k et s h ar e at t h e
pl ai ntiff’s e x p e ns e or e v e n t h e d estr u cti o n of pl ai ntiff b y u nf air m e a ns. ” ( alt er ati o ns o mitt e d)).
T h at is , A p ot e x d o es n ot m e e t t h e b ar, h o w e v er l o w it m a y b e. S e e Al as k a El e c. P e nsi o n F u n d v.
B a n k of A m. C or p. , 1 7 5 F. S u p p. 3 d 4 4, 6 0 n. 2 ( S. D. N. Y. 2 0 1 6) ( “[ A] c o m p etit or c a n n ot us e t h e
a ntitr ust l a ws t o r e c o v er l ost pr ofits as a r es ult of b ei n g c o nfr o nt e d wit h a n i n cr e as e i n
c o m p etiti o n. ”). I n s h ort, A p ot e x’s a ntitr ust cl ai ms fail b e c a us e t h e S e c o n d A m e n d e d C o m pl ai nt
all e g es h ar m t o a c o m p etit or, n ot h ar m t o c o m p etiti o n — t h e si n e q u a n o n of a n a ntitr ust cl ai m.

10

B. A ct u al o r T h r e at e n e d M o n o p oli z ati o n
A p ot e x’s a ntitr ust cl ai ms f ail f or a s e c o n d r e as o n as w ell: b e c a us e t h e S e c o n d A m e n d e d
C o m pl ai nt m a k e s cl e ar t h at H os pir a n e v er a c q uir e d m o n o p olisti c m ar k et p o w er a n d t h at t h er e
w as n o d a n g er o us pr o b a bilit y H os pir a w o ul d a c q uir e it. S e e S p e ctr u m S p orts, 5 0 6 U. S. at 4 5 6.
“ M ar k et p o w er is t h e a bilit y: ‘( 1) t o pri c e s u bst a nti all y a b o v e t h e c o m p etiti v e l e v el a n d ( 2) t o
p ersist i n d oi n g s o f or a si g nifi c a nt p eri o d wit h o ut er osi o n b y n e w e ntr y or e x p a nsi o n.’ ”
C o m m er ci al D at a S er v ers, I n c. v. I nt’l B us. M a c hi n es C or p. , 2 6 2 F. S u p p. 2 d 5 0, 7 3 ( S. D. N. Y.
2 0 0 3) ( q u oti n g A D/ S A T, Di v. of S k yli g ht, I n c. v. Ass o c. Pr ess , 1 8 1 F. 3 d 2 1, 2 2 7 ( 2 d Cir. 1 9 9 9)
( p er c uri a m)). M ar k et p o w er “ m a y b e pr o v e n dir e ctl y b y e vi d e n c e of t h e c o ntr ol of pri c es or t h e
e x cl usi o n of c o m p etiti o n, or it m a y b e i nf err e d fr o m o n e fir m’s l ar g e p er c e nt a g e s h ar e of t h e
r el e v a nt m ar k et. ” T o ps M kts., I n c. v. Q u alit y M kts., I n c. , 1 4 2 F. 3 d 9 0, 9 8 ( 2 d Cir. 1 9 9 8).
T o all e g e m ar k et p o w er, a p art y first n e e ds t o d efi n e t h e r el e v a nt m ar k et . “ T h e r el e v a nt
m ar k et is d efi n e d as al l pr o d ucts r e as o n a bl y i nt er c h a n g e a bl e b y c o ns u m ers f or t h e s a m e
p ur p os es, b e c a us e t h e a bilit y of c o ns u m ers t o s wit c h t o a s u bstit ut e r estr ai ns a fir m’s a bilit y t o
r ais e pri c es a b o v e t h e c o m p etiti v e l e v el. ” G e n e v a P h ar m. T e c h. C or p. v. B arr L a bs. I n c. , 3 8 6
F. 3 d 4 8 5, 4 9 6 ( 2 d Cir. 2 0 0 4) (i nt er n al q u ot ati o n m ar ks o mitt e d). T h e p l ai ntiff m ust d efi n e b ot h
“ a pr o d u ct m ar k et a n d a g e o gr a p hi c m ar k et. ” C o n c or d Ass o cs., L. P. v. E nt m’t Pr o ps. Tr ust , 8 1 7
F. 3 d 4 6, 5 2 ( 2 d Cir. 2 0 1 6). I n a d diti o n, t h e pl ai ntiff “ m ust off er a t h e or eti c all y r ati o n al
e x pl a n ati o n f or w h y t h e b o u n d ari es of t h e m ar k et ar e d efi n e d as t h e y ar e a n d m ust d efi n e t h e
m ar k et a c c or di n g t o t h e r ul es of i nt er c h a n g e a bilit y a n d cr oss- el asti cit y. ” B a y er S c h eri n g
P h ar m a A G v. S a n d oz, I n c. , 8 1 3 F. S u p p. 2 d 5 6 9, 5 7 5 ( S. D. N. Y. 2 0 1 1) (i nt er n al q u ot ati o n m ar ks
o mitt e d); s e e als o A D/ S A T, Di v. of S k yli g ht, I n c. , 1 8 1 F. 3 d at 2 2 7 ( d efi ni n g cr oss-el asti cit y of

11

d e m a n d a s a n e c o n o mi c m e as ur e i n di c at i n g w h et h er “ c o ns u m ers w o ul d r es p o n d t o a sli g ht
i n cr e as e i n t h e pri c e of o n e pr o d u ct b y s wit c hi n g t o a n ot h er pr o d u ct ”).
H er e, A p ot e x f ails t o pl a usi bl y all e g e t h e r el e v a nt m ar k et. F or its m o n o p oli z ati o n cl ai m ,
A p ot e x all e g es t h at t h e r el e v a nt pr o d u ct m ar k et is “t h at f or t h e dr u g c ef e pi m e, i n cl u di n g br a n d e d
a n d A B r at e d g e n eri c pr o d u cts. ” S A C ¶ 1 7 0. F or its att e m pt e d m o n o p oli z ati o n cl ai m, A p ot e x
all e g es t h e s a m e t y p e of m ar k et f or e a c h of t h e ot h er dr u g s s u bj e ct t o t h e p arti es’ a gr e e m e nt . I d.
¶ 1 8 4. I n all c as es, t h e all e g e d g e o gr a p hi c m ar k et is t h e U nit e d St at es. I d. ¶ ¶ 1 7 2, 1 8 4.
Si g nifi c a ntl y , h o w e v er, A p ot e x f ails t o “ off er a n y pl a usi bl e e x pl a n ati o n as t o w h y [t h e] m ar k et
s h o ul d b e li mit e d ” t o e a c h i n di vi d u al dr u g a n d its A B- r at e d g e n eri c e q ui v al e nts. S e e X er o x
C or p. v. M e di a S ci e n c es I nt’l, I n c. , 5 1 1 F. S u p p. 2 d 3 7 2, 3 8 4 ( S. D. N. Y. 2 0 0 7). A p ot e x d o es n ot
all e g e f a cts t h at pl a usi bl y r ul e o ut p ot e nti all y i nt er c h a n g e a bl e dr u gs, es p e ci all y t h os e wit hi n t h e
s a m e “t h er a p e uti c cl ass es . ” S A C ¶ 3 8. I nst e a d, it si m pl y all e g es i n c o n cl us or y f as hi o n t h at
“[t] h er e ar e n o pr o d u cts w hi c h ar e i nt er c h a n g e a bl e or s u bstit ut a bl e ” a n d t h at “t h er e is l o w
el asti cit y of d e m a n d. ” S A C ¶ ¶ 1 7 4, 1 8 5. “[ M] er el y ass erti n g t h at a c o m m o dit y is i n s o m e w a y
u ni q u e , ” h o w e v er, “is i ns uffi ci e nt t o pl e a d a r el e v a nt m ar k et. R at h er, a n a ntitr ust c o m pl ai nt m ust
e x pl ai n w h y t h e m ar k et it all e g es is t h e r el e v a nt, e c o n o mi c all y si g nifi c a nt pr o d u ct m ar k et. ”
C o n c or d Ass o cs., L. P. , 8 1 7 F. 3 d at 5 4 ( q u oti n g B. V. O ptis c h e I n d ustri e D e O u d e D elft v.
H ol o gi c, I n c., 9 0 9 F. S u p p. 1 6 2, 1 7 1 ( S. D. N. Y. 1 9 9 5)). A p ot e x’s f ail ur e t o d o s o, b y its elf ,
j ustifi es dis miss al. S e e C o nt e v. N e ws d a y, I n c. , 7 0 3 F. S u p p. 2 d 1 2 6, 1 4 3 ( E. D. N. Y. 2 0 1 0).
I n a d diti o n, ev e n ass u mi n g t h e r el e v a nt m ar k ets ar e as A p ot e x d efi n es t h e m, A p ot e x f ails
t o all e g e t h at H os pir a a c q uir e d m ar k et p o w er. Cr iti c all y, A p ot e x its elf r e p e at e dl y all e g es t h at
H os pir a c o ul d n ot s et pri c es at a s u pr a- c o m p etiti v e l e v el. S e e, e. g. , S A C ¶ ¶ 1 0 0- 0 1. I n f a ct, o n e
of A p ot e x’s m ai n all e g ati o ns is t h at H os pir a’s s c h e m e d e p e n d e d o n usi n g A p ot e x’s c o nfi d e nti al

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pri ci n g d at a t o s ell dr u gs “ at pri c es o n p ar wit h or n e ar A p ot e x’s c o ntr a ct pri ci n g. ” S A C ¶ ¶ 1 0 1,
1 7 6( d). O n t o p of t h at, A p ot e x all e g es t h at t h er e w er e “ m a n y ” c o m p eti n g m a n uf a ct ur ers
pr o d u ci n g “ vir t u all y i d e nti c al dr u gs, ” i n cl u di n g Qil u P h ar m a c e uti c als C o. , w hi c h A p ot e x its elf
e n d e d u p s el e cti n g as a r e pl a c e m e nt s u p pli er f or s o m e of t h e r el e v a nt dr u gs. S A C ¶ ¶ 3 8 - 3 9, 1 4 8.
I n d e e d, A p ot e x g o es s o f ar as t o a d mit t h at t h e “ g e n eri c a nti bi oti c a n d a nti ba ct eri al i nj e ct a bl e
Pr o d u cts, i n cl u di n g c e p h al os p ori ns, ” at iss u e i n t his c as e “ b el o n g t o t h er a p e uti c cl ass es i n w hi c h
g e n eri c c o m p etiti o n is r o b ust. ” S A C ¶ 3 8. T a k e n t o g et h er, t h es e all e g ati o ns est a blis h t h at
H os pir a di d n ot, a n d c o ul d n ot, r ais e pri c es a b o v e t h e c o m p etiti v e l e v el f or a n y si g nifi c a nt p eri o d
of ti m e as r e q uir e d t o s ust ai n a n a ntitr ust cl ai m .
I n ar g ui n g ot h er wis e, A p ot e x p oi nts t o H os pir a’s all e g e d m ar k et s h ar e. A p ot e x all e g es
t h at, as of A u g ust 2 0 1 6, H os pir a “ h a d a 5 6. 5 8 p er c e nt s h ar e of t h e c ef e pi m e m ar k et. ” S A C
¶ 1 7 3; s e e als o i d. ¶ 1 9 0 ( all e gi n g t h at t h er e is a “ d a n g er o us pr o b a bilit y ” of m o n o p oli z ati o n
b e c a us e H os pir a h as “ alr e a d y r e a c h e d m o n o p ol y -l e v el s h ar es of t h at m ar k et ”).

M ar k et s h ar e c a n

b e a si g nifi c a nt f a ct or i n t h e ass ess m e nt of m ar k et p o w er, at l e ast w h e n t h e all e g e d m ar k et s h ar e
a p pr o a c h es ni n et y p er c e nt. S e e Ort h o Di a g n osti c S ys., I n c. v. A b b ott L a bs., I n c. , 9 2 0 F. S u p p.
4 5 5, 4 6 3- 6 4 ( S. D. N. Y. 1 9 9 6) ( dis c ussi n g U nit e d St at es v. Al u mi n u m C o. of A m. , 1 4 8 F. 2 d 4 1 6,
4 2 4 ( 2 d Cir. 1 9 4 5) ( L. H a n d, J.) a n d ci ti n g E ast m a n K o d a k C o. v. I m a g e T e c h ni c al S er vi c es ,
I n c., 5 0 4 U. S. 4 5 1, 4 8 1 ( 1 9 9 2)). B ut m ar k et s h ar e is n ot dis p ositi v e a n d it c uts t h e ot h er w a y
w h e n, as h er e, t h e all e g e d p er c e nt a g e f alls f ar s h ort of ni n et y p er c e nt a n d ot h er f a ct ors str o n gl y
i n di c at e t h e a bs e n c e of m ar k et p o w er. S e e P e psi C o , 3 1 5 F. 3 d at 1 0 9 ( “ A bs e nt a d diti o n al
e vi d e n c e, s u c h as a n a bilit y t o c o ntr ol pri c es or e x cl u d e c o m p etiti o n, a 6 4 p er c e nt m ar k et s h ar e is
i ns uffi ci e nt t o i nf er m o n o p ol y p o w er. ”); N ats o ur c e L L C v. G FI Gr p., I n c. , 3 3 2 F. S u p p. 2 d 6 2 6,
6 3 5 ( S. D. N. Y. 2 0 0 4) ( “ E v e n m ar k et s h ar es of a p pr o xi m at el y 5 0 % ar e i ns uffi ci e nt t o d e m o nstr at e

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m ar k et p o w er w h er e ot h er f a ct ors s u c h as l o w b arri ers t o e ntr y a n d str o n g c o m p etiti o n . . .
e xist. ”).
H er e , t h e m ost t h at A p ot e x all e g es is t h at H os pir a c o ntr oll e d 5 6. 6 8% of t h e c ef e pi m e
m ar k et f or t h e m o nt h of A u g ust 2 0 1 6. S e e S A C ¶ 9 4 ( all e gi n g, c o ntr ar y t o P ar a gr a p h 1 7 3,
5 6. 6 8 % i nst e a d of 5 6. 5 8 % ). Els e w h er e, A p ot e x all e g e s t h at H os pir a h a d m u c h s m all er s h ar es of
t h e c ef e pi m e m ar k et: 6. 7 9 % i n M ar c h 2 0 1 3, 1 6. 4 6 % i n A u g ust 2 0 1 3, 1 8. 2 6 % i n A pril 2 0 1 4, a n d
s o m et hi n g i n e x c ess of 2 0 % i n M a y 2 0 1 4. I d. ¶ 9 4.

M or e o v er, A p ot e x all e g es t h at H os pir a’s

m ar k et s h ar e “fl u ct u at e d, oft e n i n l o c k-st e p wit h d e cli n es i n A p ot e x’s o w n m ar k et s h ar e. ” I d.
T a k e n t o g et h er, t h es e all e g ati o ns m a k e cl e ar t h at A p ot e x n e v er r e a c h e d a s uffi ci e ntl y l ar g e or
d ur a bl e m ar k et s h ar e t o cr e at e a n i nf er e n c e of m o n o p ol y p o w er. T h e y als o c o nfir m t h at H os pir a
l a c k e d t h e a bilit y t o c h ar g e s u pr a- c o m p etiti v e pri c es “f or a si g nifi c a nt p eri o d wit h o ut er osi o n b y
n e w e ntr y or e x p a nsi o n, ” C o m m er ci al D at a S er v ers , 2 6 2 F. S u p p. 2 d at 7 3 (i nt er n al q u ot ati o n
m ar ks o mitt e d); s e e als o, e. g., B o o k h o us e of St u y v es a nt Pl az a, I n c. v. A m az o n. c o m, I n c. , 9 8 5 F.
S u p p. 2 d 6 1 2, 6 2 2 ( S. D. N. Y. 2 0 1 3) ( dis missi n g a m o n o p oli z ati o n cl ai m o n a m oti o n t o dis miss
w h er e t h e “ pl ai ntiffs’ o nl y all e g ati o n s u g g esti n g t h at [ t h e d ef e n d a nt] p oss ess es m o n o p ol y p o w er
is t h at its m ar k et s h are is 6 0 % ”).
W h et h er A p ot e x pl a usi bl y all e g es a d a n g er o us pr o b a bilit y of H os pir a a c q uiri n g m ar k et
p o w er wit h r es p e ct t o c eftri a x o n e, c ef a z oli n, c ef o xiti n, a n d pi p/t a z is a cl os er q u esti o n ( or , at
l e ast, w o ul d b e if a r el e v a nt m ar k et w er e pr o p erl y all e g e d) , if o nl y b e c a us e “ a l ess er d e gr e e of
m ar k et p o w er m a y est a blis h a n att e m pt e d m o n o p oli z ati o n cl ai m t h a n t h at n e c ess ar y t o est a blis h a
c o m pl et e d m o n o p oli z ati o n cl ai m. ” T o p M kts., I n c. , 1 4 2 F. 3 d at 1 0 0; s e e H. L. H a y d e n C o. of
N. Y., I n c. v. Si e m e ns M e d. S ys., I n c., 8 7 9 F. 2 d 1 0 0 5, 1 0 1 8 ( 2 d Cir. 1 9 8 9). A p ot e x all e g es a
4 3. 7 5 % m ar k et s h ar e f or c eftri a x o n e “ as of J a n u ar y 2 0 1 7, ” a 3 0. 7 6 % m ar k et s h ar e f or c ef a z oli n

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“ as of J a n u ar y 2 0 1 6, ” a n d n ot hi n g wit h r es p e ct t o c ef o xiti n a n d pi p/t a z. S A C ¶ 1 9 1. B ut f or
si mil ar r e as o ns, h er e t o o t h e S e c o n d A m e n d e d C o m pl ai nt f alls s h ort. T h at is, a n att e m pt e d
m o n o p oli z ati o n cl ai m still r e q uir es “s o m e d e gr e e of m ar k et p o w er ,” T o p M kts., I n c. , 1 4 2 F. 3 d at
1 0 0, a n d “ [ a] c o m p a n y h as m o n o p ol y p o w er if it c a n s ell a pr o d u ct or s er vi c e f or a s u pr ac o m p etiti v e pri c e u ntr o u bl e d b y m ar k et f or c es; i n ot h er w or ds, if it is a bl e t o e x ert p o w er t o
i ns ul at e its pri c es fr o m c o m p etiti o n,” I n r e P a y m e nt C ar d I nt er c h a n g e F e e & M er c h a nt Dis c o u nt
A ntitr ust Liti g. , 5 6 2 F. S u p p. 2 d 3 9 2, 3 9 9 ( E. D. N. Y. 2 0 0 8). T a k e n t o g et h er, A p ot e x’s o w n
all e g ati o ns m a k e pl ai n t h at t h er e w as n e v er a “ d a n g er o us pr o b a bilit y” t h at H os pir a c o ul d i ns ul at e
its pri c es fr o m c o m p etiti o n, gi v e n t h at H os pir a w as b o u n d to t h e pri c es s et b y A p ot e x i n
c o m p etiti o n wit h ot h er m aj or fir ms . S e e B a y er S c h eri n g P h ar m a A G , 8 1 3 F. S u p p. 2 d at 5 8 0.
C O N C L U SI O N
I n s h ort, A p ot e x’s o w n all e g ati o ns m a k e cl e ar t h at it c a n n ot st at e a pl a usi bl e cl ai m f or
m o n o p oli z ati o n or att e m pt e d m o n o p o li z ati o n. I n t h e fi n al a n al ysis, A p ot e x is ess e nti all y tr yi n g
t o r e c ast a cl ai m f or br e a c h of c o ntr a ct — a c o ntr a ct t h at r estri cts c o m p etiti o n, n o l ess — as a n
a ntitr ust cl ai m, w hi c h it m a y n ot d o. S e e, e. g. , I n r e A d d er al l, 7 5 4 F. 3 d at 1 3 5 ( “ T h e m er e
e xist e n c e of a c o ntr a ct u al d ut y t o s u p pl y g o o ds d o es n ot b y its elf gi v e ris e t o a n a ntitr ust ‘ d ut y t o
d e al.’ ”); R x U S A W h ol es al e I n c. v. Al c o n L a bs. , 3 9 1 F. A p p’ x 5 9, 6 1 ( 2 d Cir. 2 0 1 0) (s u m m ar y
or d er) ( “ A r ef us al t o d e al wit h c om p etit ors d o es n ot c o nstit ut e a nti c o m p etiti v e c o n d u ct i n
vi ol ati o n of S e cti o n 2 e x c e pt i n li mit e d cir c u mst a n c es n ot pr es e nt h er e. ”). A c c or di n gl y,
A p ot e x’s a ntitr ust cl ai ms m ust b e a n d ar e dis miss e d.
T h at l e a v es t w o i nt err el at e d iss u es: a m e n d m e nt a n d j uris di cti o n. A p ot e x r e q u ests, i n t h e
e v e nt t h at its a ntitr ust cl ai ms ar e dis miss e d, “ a c o nf er e n c e t o a d dr ess n e xt st e ps, i n cl u di n g
a m e n d m e nt. ” Pl.’s O p p. 2 5. C o nstr ui n g t his as a c urs or y r e q u est f or l e a v e t o a m e n d, t h e C o urt

15

c o n cl u d es t h at l e a v e t o a m e n d w o ul d b e f util e. S e e, e. g. , Ri n c o n v. C o vi di e n , N o. 1 6-C V - 1 0 0 3 3
(J M F), 2 0 1 7 W L 2 2 4 2 9 6 9, at * 2 ( S. D. N. Y. M a y 2 2, 2 0 1 7) ( “ Alt h o u g h c o urts ‘s h o ul d fr e el y gi v e
l e a v e w h e n j usti c e s o r e q uir es,’ a c o urt n e e d n ot gr a nt l e a v e t o a m e n d w h e n f urt h er a m e n d m e nt
w o ul d b e f util e. ” ( q u oti n g F e d. R. Ci v. P. 1 5( a)( 2)); s e e als o R uff ol o v. O p p e n h ei m er & C o. , 9 8 7
F. 2 d 1 2 9, 1 3 1 ( 2 d Cir. 1 9 9 3) ( p er c uri a m) ( “ W h er e it a p p e ars t h at gr a nti n g l e a v e t o a m e n d is
u nli k el y t o b e pr o d u cti v e . . . it is n ot a n a b us e of dis cr eti o n t o d e n y l e a v e t o a m e n d. ”). T h e
d ef e cts i n A p ot e x’s a ntitr ust cl ai ms ar e “s u bst a nti v e ” a n d aris e fr o m A p ot e x’s o w n all e g ati o ns,
n ot fr o m i n a d e q u at e or i n artf ul pl e a di n g. S e e C u o c o v. M orits u g u , 2 2 2 F. 3 d 9 9, 1 1 2 ( 2 d Cir.
2 0 0 0).

M or e o v er, A p ot e x h as n ot p oi nt e d t o a d diti o n al f a cts it c o ul d all e g e t h at w o ul d c ur e t h es e

d ef e cts, a n d it di d n ot d o s o pr e vi o usl y w h e n H os pir a c h all e n g e d its pr o p os e d a m e n d e d
all e g ati o ns. S e e E C F N os. 6 0- 6 1. A c c or di n gl y, l e a v e t o a m e n d t h e a ntitr ust cl ai ms is d e ni e d.
Wit h o ut t h e pr os p e ct of a ntitr ust cl ai ms, h o w e v er, it is n ot cl e ar t h at t his c as e s h o ul d
r e m ai n i n f e d er al c o urt. Dis miss al of t h e a ntitr ust cl ai ms l e a v es o nl y st at e-l a w cl ai ms a n d
A p ot e x, a D el a w ar e c or p or ati o n, d estr o y e d di v ersit y b y a d di n g H os pir a, I n c., a n ot h er D el a w ar e
c or p or ati o n, as a D ef e n d a nt i n t h e S e c o n d A m e n d e d C o m pl ai nt. C o m p ar e S A C, wit h E C F N o.
1, a n d E C F N o. 3 4. U n d er 2 8 U. S. C. § 1 3 6 7, t h e C o urt h as dis cr eti o n t o e x er cis e s u p pl e m e nt al
j uris di cti o n o v er t h e r e m ai ni n g st at e -l a w cl ai ms, a n d m ust b al a n c e t h e “tr a diti o n al ‘ v al u es of
j u di ci al e c o n o m y, c o n v e ni e n c e, f air n ess, a n d c o mit y’ ” t o d et er mi n e w h et h er t o d o s o. K ol ari v.
N e w Y or k -Pr es b yt eri a n H os p. , 4 5 5 F. 3 d 1 1 8, 1 2 2 ( 2 d Cir. 2 0 0 6) ( q u oti n g C ar n e gi e- M ell o n U ni v.
v. C o hill , 4 8 4 U. S. 3 4 3, 3 5 0 ( 1 9 8 8)). T h e b al a n c e or di n aril y d o es n ot s u p p ort e x er cisi n g
j uris di cti o n “if all f e d er al cl ai ms h a v e b e e n dis miss e d at t h e pl e a di n g st a g e. ” H a y n es v.
Z a p or o ws ki , 5 2 1 F. A p p’ x 2 4, 2 8 ( 2 d Cir. 2 0 1 3) (s u m m ar y or d er) (i nt er n al q u ot ati o n m ar ks
o mitt e d). I n d e ed, t h e S e c o n d Cir c uit r e c e ntl y r eit er at e d t h at, “i n t h e us u al c as e i n w hi c h all

16

f e d er al-l a w cl ai ms ar e eli mi n at e d b ef or e tri al, t h e b al a n c e of f a ct ors t o b e c o nsi d er e d u n d er t h e
p e n d e nt j uris di cti o n d o ctri n e — j u di ci al e c o n o m y, c o n v e ni e n c e, f air n ess, a n d c o mit y — will
p oi nt t o w ar d d e cli ni n g t o e x er cis e j uris di cti o n o v er t h e r e m ai ni n g st at e -l a w cl ai ms. ” P e nsi o n
B e n. G u ar. C or p. e x r el. St. Vi n c e nt C at h oli c M e d. Ctrs. R et. Pl a n v. M or g a n St a nl e y I n v. M g mt.
I n c., 7 1 2 F. 3 d 7 0 5, 7 2 7 ( 2 d Cir. 2 0 1 3) (i nt er n al q u ot ati o n m ar ks o mitt e d); s e e, e. g., Fr a n cis v.
H artf or d B d. of E d u c. , 7 6 0 F. A p p’ x 3 4, 3 8 ( 2 d Cir. 2 0 1 9) (s u m m ar y or d er).
U nf ort u n at el y, t h e p arti es h a v e n ot a d e q u at el y bri ef e d t h e q u esti o n of s u bj e ct-m att er
j uris di cti o n i n t h e a bs e n c e of t h e a ntitr ust clai ms. I n its m e m or a n d u m of l a w i n s u p p ort of its
m oti o n, H os pir a i n di c at e d , wit h littl e el a b or ati o n, t h at “t h e C o urt pr o p erl y m a y el e ct t o r et ai n
j uris di cti o n . . . or d e cli n e t o d o s o. ” D efs.’ M e m. 2 4 . A p ot e x di d n ot a d dr ess t h e iss u e at all i n
its o p p ositi o n bri ef, a n d H os pir a pr o vi d e d n o f urt h er dis c ussi o n i n its r e pl y bri ef. A c c or di n gl y,
t h e C o urt will r es er v e j u d g m e nt o n w h et h er it s h o ul d e x er cis e s u p pl e m e nt al j uris di cti o n o v er t h e
r e m ai ni n g st at e-l a w cl ai ms ( a n d, b y e xt e nsi o n, r e a c h H os pir a’s ar g u m e nt wit h r es p e ct t o t h e
p u niti v e d a m a g es cl ai m) or dis miss t h e c as e wit h o ut pr ej u di c e t o r efili n g t h e st at e -l a w cl ai ms i n
st at e c o urt p e n di n g f urt h er bri efi n g. N o l at er t h a n J a n u a r y 1 7, 2 0 2 0 , e a c h si d e s h all s u b mit a
s u p pl e m e nt al bri ef, n ot t o e x c e e d fi v e p a g es, a d dr essi n g t h e iss u e.
T h e Cl er k of C o urt is dir e ct e d t o t er mi n at e E C F N o. 8 4.
S O O R D E R E D.
D at e d: J a n u ar y 6, 2 0 2 0
N e w Y or k, N e w Y or k

__________________________________
J E S S E M. F U R M A N
U nit e d St at es Distri ct J u d g e

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