Antitrust Law Daily United Healthcare’s suit against cancer drug maker moved to New Jersey
Friday, December 4, 2020

United Healthcare’s suit against cancer drug maker moved to New Jersey

By Sheri A. Wattles-Miller, J.D.

Transfer of venue was appropriate because the Minnesota case was similar to another New Jersey case, and both cases centered on federal Sherman Act claims and involved the same state law issues.

An antitrust action filed by United Healthcare Services, Inc., a Minnesota corporation, against Celgene Corporation, a drug manufacturer headquartered in New Jersey, was transferred to a federal district court in New Jersey by the federal district court in Minneapolis, Minnesota. The suit was similar enough to a proceeding against Celgene filed in New Jersey by another health insurer, Humana Inc., that to continue in two separate courts would thwart judicial economy. The principal claim in both cases arose under federal antitrust law. Moreover, issues of Minnesota state law were already before the New Jersey court, and the New Jersey court could handle questions of Minnesota law (United HealthCare Services, Inc. v. Celgene Corp., December 3, 2020, Doty, D.).

United Healthcare claimed that Celgene had engaged in conduct that prevented free and fair competition so that it could charge unlawfully high prices for cancer drugs Thalomid and Revlimid. According to United Healthcare, Celgene interfered with competitors' efforts to develop and obtain FDA approval for generic versions of the two drugs, thereby maintaining 100 percent of the market share and inflating prices for the two drugs.

Nearly identical case. In March of 2019, Humana Inc. sued Celgene in the District of New Jersey alleging federal antitrust violations as well as violations of various state antitrust and consumer protection laws. The Minnesota court noted that the complaint in Humana was "strikingly similar" to the complaint in the United Healthcare case. The only material difference, the court said, was that United Healthcare involved independent claims alleging violations of Minnesota's antitrust statute and the Minnesota Consumer Fraud Act. However, Humana included claims for "Monopolization and Monopolistic Scheme Under State Law," "Attempted Monopolization Under State Law," "Unfair and Deceptive Trade Practices Under State Law," and "Unjust Enrichment Under State Law." Thus, the Humana case required the New Jersey court to apply the law of many other states, including Minnesota. Additionally, Celgene had litigated numerous patent actions against generic drug manufacturers relating to Thalomid or Revlimid in the District of New Jersey.

Judicial economy. Noting that the interests of justice were the "most important factors" to consider in regard to a motion for transfer of forum, the court said that such analysis hinged on judicial economy. Furthermore, the U.S. Supreme Court has found that a motion to transfer would be appropriate where permitting two cases involving the same issues to proceed in different district courts would waste time, energy, and money. United Healthcare and Humana sued Celgene under the same core theories of antitrust, state consumer protection laws, and unjust enrichment. Both insurers sought the same relief. The District of New Jersey had handled similar cases involving Celgene’s alleged monopolistic conduct since 2007. Thus, not only would it be more efficient for the Humana and United Healthcare cases to proceed in New Jersey, but also the judges there had the experience and knowledge to handle and resolve the complex antitrust issues relating to Celgene’s actions. Although United Healthcare's choice of forum was owed deference, that deference did not override the considerations of judicial economy present in this case.

Convenience of parties and witnesses. Because Celgene's alleged monopolistic activities occurred or originated in New Jersey, more of the key witness would likely be located there. The court noted that there would be Minnesota-based witnesses for United Healthcare and acknowledged that transferring the case to New Jersey would pose some inconvenience to the insurer but said that United Healthcare was a large corporation that could bear the expense of litigating in either forum.

The case is No. 0:20-cv-00686-DSD-ECW.

Attorneys: Abby L. Dennis (Boies Schiller & Flexner LLP) for United HealthCare Services, Inc. Benjamin M. Greenblum (Williams & Connolly LLP) for Celgene Corp.

Companies: United HealthCare Services, Inc.; Celgene Corp.

MainStory: TopStory Antitrust GCNNews MinnesotaNews

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