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Endo Pharmaceuticals v. Actavis Inc, 13-3981 (2014)

Court: Court of Appeals for the Third Circuit Number: 13-3981 Visitors: 14
Filed: Dec. 05, 2014
Latest Update: Mar. 02, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 13-3981 _ ENDO PHARMACEUTICALS INC., Appellant v. ACTAVIS INC.; ACTAVIS SOUTH ATLANTIC LLC, _ No. 13-4096 _ ENDO PHARMACEUTICALS INC., v. ACTAVIS INC.; ACTAVIS SOUTH ATLANTIC LLC, Appellants _ Appeal from the United States District Court for the District of New Jersey (No. 2-12-cv-07591) District Judge: Hon. Dennis M. Cavanaugh _ Submitted Pursuant to Third Circuit LAR 34.1(a) November 21, 2014 Before: CHAGARES, HARDIMAN
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                                                  NOT PRECEDENTIAL

          UNITED STATES COURT OF APPEALS
               FOR THE THIRD CIRCUIT
                    _____________

                         No. 13-3981
                        _____________

             ENDO PHARMACEUTICALS INC.,

                                            Appellant

                               v.

     ACTAVIS INC.; ACTAVIS SOUTH ATLANTIC LLC,
                    _____________

                         No. 13-4096
                        _____________

             ENDO PHARMACEUTICALS INC.,

                               v.

     ACTAVIS INC.; ACTAVIS SOUTH ATLANTIC LLC,

                                           Appellants
                       ______________

          Appeal from the United States District Court
                 for the District of New Jersey
                      (No. 2-12-cv-07591)
          District Judge: Hon. Dennis M. Cavanaugh
                        ______________

        Submitted Pursuant to Third Circuit LAR 34.1(a)
                     November 21, 2014

Before: CHAGARES, HARDIMAN, and SHWARTZ, Circuit Judges.

                  (Filed: December 5, 2014)


                               1
                                         ____________

                                           OPINION
                                         ____________

CHAGARES, Circuit Judge.

       Plaintiff Endo Pharmaceuticals Inc. appeals the District Court’s September 3, 2013

order granting Defendants Actavis, Inc. and Actavis South Atlantic LLC’s (together,

“Actavis”) motion to dismiss the Complaint pursuant to Federal Rule of Civil Procedure

12(b)(6). For the reasons that follow, we will vacate the District Court’s order and

remand the case to the District Court.

                                              I.

       We write solely for the parties and therefore recite only the facts that are necessary

to our disposition. Endo developed and marketed the pain reliever Opana® ER and its

alternate, crush-resistant formula (which also bears the name Opana® ER). Appendix

(“App.”) 26–27. Actavis sold a generic version of Opana® ER. That generic was “AB

rated” to the original Opana® ER by the FDA, meaning the FDA approved it as

bioequivalent to the brand-name drug. See App. 32, 573–74. Actavis’s generic was not

AB rated to the newer, crush-resistant formula. App. 33. In May 2012, Endo voluntarily

discontinued the original Opana® ER, leaving the crush-resistant formula the only

Opana® ER on the market. App. 31. Actavis, however, continued to market its generic

as “AB Rated to Opana® ER.” App. 34. In August 2012, Endo filed a petition with the


This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.

                                              2
FDA seeking a determination that it had withdrawn Opana® ER from the market for

safety reasons. App. 188. Endo requested that the FDA refuse to approve any pending

applications for generic versions of the original Opana® ER and withdraw approval of

any formerly-approved generics, like Actavis’s. 
Id. Then, in
December 2012, Endo filed

suit against Actavis in United States District Court for the District of New Jersey,

bringing federal and state law claims for false advertising and unfair competition.

       The District Court dismissed Endo’s Complaint without prejudice pursuant to Rule

12(b)(6), citing the doctrine of primary jurisdiction. App. 4–5. It reasoned that although

the action was otherwise within its jurisdiction, Endo’s claims required a fact

determination — “whether Actavis’s generic is still AB equivalent to Opana® ER” —

that was best left to the FDA in the first instance. App. 4. Endo appealed.

       After briefing in the District Court was complete, the FDA issued a ruling on

Endo’s petition. It determined that the original Opana® ER was not withdrawn for

reasons of safety or effectiveness. 78 Fed. Reg. 38053-01. Accordingly, the FDA would

not withdraw approval of generics related to the original Opana® ER and would continue

to approve new generics so long as they met all other legal and regulatory requirements.

Id. II. The
District Court had subject matter jurisdiction over the Lanham Act Claim

pursuant to 15 U.S.C. § 1121 and 28 U.S.C. § 1331. It had supplemental jurisdiction

over the state law claims pursuant to 28 U.S.C. § 1367. This Court has jurisdiction

pursuant to 28 U.S.C. § 1291.

                                             3
       We review a district court’s decision to abstain on primary jurisdiction grounds for

abuse of discretion. Baykeeper v. NL Indus., Inc., 
660 F.3d 686
, 690 (3d Cir. 2011); P.R.

Mar. Shipping Auth. v. Valley Freight Sys., 
856 F.2d 546
, 549 (3d Cir. 1988). But the

District Court’s analysis of the law of abstention is subject to de novo review.

Baykeeper, 660 F.3d at 690
.

                                             III.

       The doctrine of primary jurisdiction applies where a claim is originally cognizable

in the courts1 but “enforcement of the claim requires the resolution of issues which, under

a regulatory scheme, have been placed within the special competence of an

administrative body.” United States v. W. Pac. R.R. Co., 
352 U.S. 59
, 64 (1956). “[I]n

such a case the judicial process is suspended pending referral of such issues to the

administrative body for its views.” 
Id. “No fixed
formula exists for applying the

doctrine,” 
id., but we
have previously focused our analysis on four factors:

       (1) Whether the question at issue is within the conventional experience of judges
       or whether it involves technical or policy considerations within the agency’s
       particular field of expertise; (2) Whether the question at issue is particularly within
       the agency’s discretion; (3) Whether there exists a substantial danger of
       inconsistent rulings; and (4) Whether a prior application to the agency has been
       made.

Baykeeper, 660 F.3d at 691
.

       The District Court applied the doctrine of primary jurisdiction because it believed

that the FDA had special competence to determine “whether Actavis’s generic is still AB

1
  Actavis argues that Endo’s claims are not in fact cognizable in federal court. We need
not decide that issue, however, because the District Court’s decision will be vacated and
remanded on other grounds.

                                              4
equivalent to Opana® ER.” App. 4. It noted that Endo had already made an application

to the FDA on this issue. App. 5.

       Endo argues that the District Court’s application of the primary jurisdiction

doctrine was misguided because the fact question at issue in the case was not whether

Actavis’s generic was biochemically equivalent to Opana® ER — a determination

committed to the FDA’s special competence — but whether it had been approved as AB

rated to Opana® ER, a question the District Court could answer by consulting the FDA’s

catalog of generics listed for Opana® ER. Put another way, the District Court had to

answer the history question, not the science one. And because the FDA has approved no

drugs as AB rated to crush-resistant Opana® ER, Endo argues the history question is a

simple one.

       In its focus on the absence of AB-rated generics to crush-resistant Opana® ER,

Endo overlooks the possibility that the District Court would be interested in the continued

effectiveness of an AB rating to the original, discontinued Opana® ER. But that is the

import of the District Court’s primary jurisdiction ruling. Before considering whether

Actavis engaged in false advertising by marketing its generic as AB rated to Opana® ER,

the District Court sensibly wanted to know whether approval for Actavis’s generic would

be withdrawn as a result of Endo’s petition to the FDA. This has some bearing on

whether Actavis can fairly describe its drug as AB rated to Opana® ER.

       Now that the FDA has issued its determination, however, the District Court’s

rationale for applying the primary jurisdiction doctrine is moot. The logical course is to

remand for the District Court to address the remaining arguments in the first instance.

                                             5
See Bass v. Butler, 
258 F.3d 176
, 179–80 (3d Cir. 2001) (remanding to the district court

because subsequent developments had rendered the district court’s rationale for

abstention moot).

                                            IV.

      For the foregoing reasons, we will vacate the District Court’s September 3, 2013

order and remand for further proceedings.




                                            6

Source:  CourtListener

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