By Elena Eyber, J.D.
Class certification of drug purchasers approved after meeting requirements of common evidence of injury, predominance, and adequacy of class representative.
The Third Circuit affirmed the district court’s order certifying a direct purchaser class. The appellate court held: (1) common evidence of injury and damages showed that the purchasers paid more for brand Suboxone® products than they would have for generic tablets due to Reckitt’s actions to promote film, disparage tablets, and suppress generics’ market entry; (2) although the purchasers’ aggregate damages model did not allocate damages among class members, issues regarding allocation of individual damages were insufficient to defeat class certification; and (3) Burlington Drug Company, Inc. was an adequate class representative because it had the requisite knowledge of the litigation, including the basis for the claimed injury, and its interests aligned with the class (In re Suboxone (Buprenorphine Hydrochlorine and Naloxone) Antitrust Litigation, July 28, 2020, Shwartz, P.).
Procedural history. Reckitt manufactured Suboxone, a prescription drug used to treat opioid addiction. Directpurchasers of Suboxone—including Burlington—alleged that Reckitt engaged in anticompetitive conduct that impeded the entry of generic versions of the drug into the market in violation of §2 of the Sherman Act (15 U.S.C. §2). The district court certified a class of those who purchased Suboxone from Reckitt, and Reckitt appealed the certification order.
Common evidence of injury. First, Reckitt argued that the purchasers failed to provide common evidence of injury or damages that matched a viable theory of liability. Reckitt did not dispute that the purchasers provided common evidence showing that the class paid more for Suboxone products, but argued that it could lawfully raise the prices on Suboxone tablets and change its rebate program, so the purchasers did not have an antitrust injury. The purchasers alleged that the totality of Reckitt’s actions, including raising prices, withdrawing tablets from the market, providing rebates only for film, disparaging the safety of tablets, and delaying the generics’ entry by filing a citizen petition and not cooperating in the REMS process, suppressed generic competition and thus violated the antitrust laws. They contended that this conduct resulted in the antitrust injury of having to pay more for brand Suboxone products when less expensive generic tablets should have been available but were not because of Reckitt’s actions. The appellate court held that Reckitt incorrectly asked the court to examine each of these acts individually, and the common evidence existed to prove the purchasers’ antitrust theory and the resulting injury.
Predominance. Next, Reckitt argued that the purchasers did not satisfy the predominance requirement because their damages model only calculated aggregate damages, and the eventual need for individualized damages inquiries defeated predominance. The appellate court held that Reckitt was incorrect when antitrust plaintiffs may satisfy the predominance requirement by using a model that estimates the damages attributable to the antitrust injury, even if more individualized determinations are needed later to allocate damages among class members. The purchasers’ model did not measure how Reckitt’s scheme harmed each class member and recognized that there could be differences among the class members concerning the precise damages they suffered, however, individualized determinations are of no consequence in determining whether there are common issues concerning liability. Purchasers’ theory of injury and damages was provable and measurable by an aggregate model relying on class-wide data. Therefore, the appellate court held that the district court correctly found that common issues predominated.
Adequate class representative. Finally, Reckitt argued that Burlington was not an adequate class representative because Burlington had a risk of a conflict with class counsel and lacked control over the litigation, precluding it from protecting the class. Reckitt suggested that class counsel and the class representative could have conflicting views on what allegations should be made, who should be named as a defendant, and whether to accept a settlement or go to trial. The appellate court found that each conflict that Reckitt identified was speculative or without basis. Further, the appellate court held that Reckitt’s claim that Burlington had ceded control of this litigation to class counsel, and that this created a risk of conflicts, did not render Burlington an inadequate representative. Burlington was not a disengaged representative and was aware of its role as a fiduciary, understood the basis for the claimed injury, had an incentive to recover its proportionate share of damages, monitored the litigation, produced documents, and had the requisite interest in and knowledge about the case to satisfy the adequacy requirement. Accordingly, the appellate court held that Reckitt’s attack on Burlington’s adequacy as class representative lacked merit.
The case is No. 19-3640.
Attorneys: Bruce E. Gerstein (Garwin Gerstein & Fisher LLP) for Burlington Drug Co. Inc. Thomas M. Sobol (Hagens Berman Sobol Shapiro LLP) for Meijer Inc. Caitlin G. Coslett (Berger Montague) for Rochester Drug Cooperative Inc. Jonathan B. Berman (Jones Day) for Indivior Inc. f/k/a Reckitt Benckiser Pharmaceuticals Inc.
Companies: Burlington Drug Co. Inc.; Meijer Inc.; Rochester Drug Cooperative Inc.; Indivior Inc. f/k/a Reckitt Benckiser Pharmaceuticals Inc.
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