In re HIV Antitrust Litigation

Background

This antitrust litigation involved indirect and direct purchasers of HIV drugs manufactured by, among others, Gilead. The EPPs represented indirect purchaser classes. The Retailer Plaintiffs were direct-purchaser opt-outs and included Teva as a defendant. The Retailer Plaintiffs settled with Gilead and Teva on May 29, 2023, shortly before trial. The EPPs proceeded to trial on reverse-payment claims and lost when the jury returned a verdict for Gilead and Teva on June 30, 2023.

After the verdict, the EPPs moved for a set-aside order. They sought to place 6% to 8% of any plaintiff’s recovery—whether from a settlement or judgment—into escrow. Because the Retailer Plaintiffs filed their lawsuits in 2021, the EPPs sought an 8% set-aside from any recovery by those plaintiffs. The EPPs argued that their work provided a common benefit to the litigation and that the Retailer Plaintiffs benefited from that work. The Retailer Plaintiffs disputed the extent and value of the EPPs’ work and asserted that they themselves made substantive contributions.

The EPPs initially sought relief against all other plaintiffs, but resolved their disputes with everyone except the Retailer Plaintiffs. The court therefore considered only whether to enter a set-aside order against the Retailer Plaintiffs.

Court’s Analysis

The court assumed, without deciding, that it had inherent authority to enter a set-aside order in this antitrust case, even though such orders are more commonly used in mass-tort litigation. The court also assumed, without deciding, that a party seeking such an order need not have succeeded, or have the potential to succeed, on its own claims.

The court treated unjust enrichment—preventing one plaintiff from unfairly benefiting from another plaintiff’s work—as the principle supporting the requested order. Because the EPPs relied on equity, however, the court considered the Retailer Plaintiffs’ argument that laches barred the motion. Laches is an equitable defense based on the moving party’s delay and prejudice to the opposing party.

The court found that the EPPs delayed seeking a set-aside order. The EPPs could have sought an agreement with the Retailer Plaintiffs when they filed suit in 2021 or at any time before trial, but did not do so. The court also declined to consider a joint prosecution agreement referenced at the hearing because the agreement had not been submitted with the motion or previously provided to the court. In addition, the EPPs acknowledged that the parties had not agreed to a set-aside arrangement in that agreement.

The court found that the delay prejudiced the Retailer Plaintiffs. If they had known that the EPPs would seek 8% of their recovery, that information could have affected their settlement negotiations with the defendants and they might have negotiated a different result. The court therefore concluded that laches barred the EPPs from obtaining relief.

Disposition

The court denied the EPPs’ motion for a set-aside order and stated that the order disposed of Docket No. 2080. The court did not decide whether it had authority to issue the order or whether the EPPs otherwise established entitlement to payment. In a note, the court said there were serious questions about the merits, including whether the Retailer Plaintiffs had been unjustly enriched, because their settlement success may have resulted from their own counsel’s trial preparation and risk assessment rather than simply from using the EPPs’ work.